2022 Midterm Election Ballot Questions – How Will They Impact Your Business?

On November 8th, 2022, voters in several states had the opportunity to cast ballots in non-binding referendums that could impact employers.

In the aftermath of the 2022 midterm elections, most headlines have focused on the issue of who will control Congress in the upcoming 2023-2025 legislative session. However, millions of voters also weighed in on various state-level ballot questions on November 8th, and this important story should not be overlooked. Though state governments are not legally obligated to abide by the results of most ballot measures, legislatures typically accept the will of the voters and pass laws in accordance with their decisions.

Below, we’ve isolated dozens of ballot questions involving issues that are relevant to employers, grouped them into six broad categories, and analyzed their potential impact from a business management perspective:

Healthcare

What Happened?

Four states held referendums related to healthcare:

• Arizona voters approved a measure that caps interest rates on debt accrued from receiving healthcare services and institutes limits on the seizure of property and earnings for the purpose of debt repayment.
• Massachusetts voters approved a measure that sets the medical loss ratio for dental plans at 83% and enables the state government to review and change insurance rates under certain circumstances.
• Oregon voters approved an amendment to the state constitution that designates access to healthcare as a fundamental right. The amendment states: “It is the obligation of the state to ensure that every resident of Oregon has access to cost-effective, clinically appropriate and affordable health care as a fundamental right.”
• South Dakota voters approved an amendment to the state constitution that expands Medicaid funds to residents with incomes below 138% of the federal poverty level.

Takeaways for Employers

Four states had referendums on proposed tax changes that could impact companies doing business within their borders:

• The Arizona measure will help to limit the financial distress of employees who are hit with large medical bills.
• The Massachusetts measure will impact how dental insurance premiums are calculated. Proponents of the measure hope the new medical loss ratio and governmental review process will result in lower costs for consumers.
• Oregon’s constitutional amendment was positioned by proponents as a value-statement, however, opponents of the amendment warned of potential litigation if it’s perceived the state does not uphold the constitutional commitment to provide “access to cost-effective, clinically appropriate, and affordable health care.” This could have major implications for private healthcare systems if a court deems that their current practices violate the state constitutional rights of Oregonians. In fact, some believe that such a suit could pave the way for a single-payer system in Oregon.
• The South Dakota measure will increase the availability of subsidized healthcare for low-income residents. In other states that previously adopted the Affordable Care Act’s Medicaid expansion, employers were able to leverage the program to help lower wage employees find affordable health coverage.

Corporate Tax Changes

What Happened?

Four states had referendums on proposed tax changes that could impact companies doing business within their borders:

• Georgia voters approved a measure authorizing local governments to grant temporary tax relief to those who own property that suffers damage from a natural disaster and falls within a federal disaster area.
• Idaho voters approved a measure to reduce the state’s business income tax from 6% to 5.8% (the individual income tax rate was also reduced and now sits at an identical 5.8%).
• In Washington state, voters advised the legislature to repeal a bill that taxes rideshare companies such as Uber and Lyft.
• In West Virginia, voters rejected a measure to exempt personal property that is used for business purposes from state taxes.

Takeaways for Employers

The referendums in Georgia, Idaho, and Washington could positively impact the tax liability of employers operating within their borders, as well as signal the expansion of a trend in enacting tax policy via referendum.

Labor Issues

What Happened?

In Illinois, voters approved a constitutional amendment that establishes a fundamental right for workers to organize and send representatives to negotiate working conditions with employers. In Tennessee, voters approved a constitutional amendment that prohibits the practice of mandating membership in a labor union as a condition for employment.

Takeaways for Employers

While these measures may look consequential for Illinois and Tennessee employers on the surface, they do not constitute a meaningful change to the status quo in either state. The National Labor Relations Act has guaranteed a federal right to collective bargaining since 1935, a right which the Illinois ballot measure simply reaffirmed. Similarly, Tennessee has had legislation prohibiting “closed shop” unions since 1947, although codifying this as a constitutional amendment does make it more difficult to weaken or overturn in the future.

Minimum Wage Increases

What Happened?

Voters in both Nebraska and Nevada approved ballot measures to increase the state minimum wage. Nebraska’s ballot measure calls for increasing the minimum wage from $9/hour to $15/hour by 2026, with annual adjustments to match the cost of living thereafter.

Nevada’s measure was more complex, stipulating that:

1. The state’s existing two-tier minimum wage, with different rates for employees who receive health benefits from their employers (currently $9.50/hour) and those who don’t (currently $10.50/hour), is to be abandoned in favor of a single $12/hour rate for all employees by 2024.
2. The existing practice of annually adjusting the minimum wage to match the cost of living, which was previously set to occur in 2025 and beyond, will now be abandoned in favor of manual adjustments by the state legislature.

Takeaways for Employers

Employers operating in these states who pay workers below the new minimum wage levels will be required to increase their compensation rates in the years ahead. Nevada employers will no longer be required to compensate minimum wage workers differently based on whether they receive health benefits and will also not be subjected to automatic inflation-adjusted minimum wage changes on an annual basis. On the other hand, Nebraska employers will be required to abide by annual automatic minimum wage changes based on the cost of living beginning in 2027.

Abortion Access

What Happened?

Five states held referendums regarding constitutional amendments on the status of abortion. Voters in Kansas and Kentucky rejected amendments prohibiting abortion, while voters in California, Michigan, and Vermont approved amendments that codified a right for state residents to access abortion services.

Takeaways for Employers

Following the Dobbs v. Jackson Women’s Health Organization decision that overturned Roe v. Wade, many states implemented laws impacting access to reproductive care. Employers sponsoring health plans, expanding operations into new states, and/or considering programs aimed at assisting individuals with accessing reproductive care should continue to monitor state-level developments.

Drug Legalization

What Happened?

Six states held referendums impacting the legal status of controlled substances. Voters in Arkansas, North Dakota, and South Dakota voted against the legalization of marijuana, while voters in Maryland and Missouri voted in favor of marijuana legalization. In Colorado, voters approved a measure legalizing psychedelic substances.

Takeaways for Employers

Drug legalization in Colorado, Maryland, and Missouri will not immediately take effect, and the legislatures of these states will have the ability to decide the specific details of the legalization process. In addition to this, both marijuana and psychedelic drugs remain illegal at the federal level. However, companies that drug test employees in these states may consider modifying their policies due to changes in the legal status of these substances.

For more compliance news, check out this piece on upcoming Transparency in Coverage rules for group health plans.