Plan for Monday’s Hearing on Missouri Employer’s Mutual

On Monday, the House Committee on Gov’t Oversight and Accountability will hold a hearing Monday to look into Missouri Employer’s Mutual. An audit by Missouri State Auditor Tom Schweich and follow-up news accounts charged that MEM is ‘having its cake and eating it too’ – enjoying the perks and comforts of private industry but still gleaning the tax benefits of a quasi-governmental entity. Some say the company has an unfair advantage due to a tax-status based on nominal – if any – public oversight. The company claims state laws requiring it to offer low-margin worker’s compensation policies to small business customers more than offsets the benefits it receives from non-profit tax treatment. In addition, MEM acquired a for-profit subsidiary last year to engage in business outside the state of Missouri. While MEM claims this acquisition was legal and authorized by Missouri statutes, others disagree.

The committee will look into legal status of MEM as a whole and its recent acquisition.

As I see it, policymakers have three general options. (1) Do nothing. (2) Make MEM more public and more accountable. Or (3) Set a course of action for MEM to go private and forego its tax benefits.

The committee will officially hear three bills at the same time: HB 1940, filed by myself, which sets a course for privatization; HB 1941, filed by myself, which makes MEM a more public entity; and HB 1955, sponsored by Rep. Todd Richardson,  which is simply a placeholder bill to be filled in later based on findings of the committee.