New Hampshire Backpedals on Contractors

January 8th, 2008 by

Back in December we blogged a legislative remedy that backfired in New Hampshire: House Bill 471 eliminated the exemption for corporate officers and directors from workers comp coverage. Given the state’s extremely high costs for comp, this created an immediate outcry. We compared it to the weather on top of Mount Washington, which at the time was minus 13 degrees with the wind howling at 93 miles per hour.
Well, today things look a lot milder. Mount Washington is enjoying relatively mild weather (38 degrees, with a modest wind of 42 mph). And the newly reconvened legislature has already amended House Bill 471 by restoring the exemption for corporate officers and directors.
Governor Lynch jumped on the bandwagon: “I will sign this law as soon as possible and I applaud the bipartisan leadership of the House and Senate for listening to the concerns of small business…”
Lasting Solutions
As we mentioned in our previous blog, New Hampshire still has a very big problem, driven by its disproportionately high rates for comp coverage in the construction trades. The legislature would do well to figure out why these rates are among the highest in the country. It’s fine to exempt business owners from coverage, but that does not address the burdensome costs faced by contractors with employees. These folks are being hammered by costs that are twice as high as their competitors in neighboring states. By allowing business owners to opt out of the system, New Hampshire has bought itself a little time. But just as the mild conditions on Mt. Washington are soon to end, they had best start focusing on long-term solutions that bring rates into alignment with other states. Anything less would be like climbing Mt. Washington in January with nothing more than a backpack and an extra layer of clothes. A very bad idea indeed!