American Benefits Council Urges Employer Flexibility for Final Healthcare Bill
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The American Benefits Council (“the Council”), an advocacy organization for voluntary private employer-sponsored benefit programs, has released a document outlining its recommendations to Congress for crafting the final healthcare bill. Lawmakers are in the process of merging the provisions of the Senate’s Patient Protection and Affordable Care Act (H.R. 3590) and the House of Representative’s Affordable Health Care for America Act (H.R. 3962) to create a unified bill. The bills contain many crucial differences, especially with respect to the provisions regulating employer-sponsored coverage and responsibilities. The Council’s recommendations document – Priority Employer Issues for Consideration of House and Senate Health Care Reform Legislation (pdf) – sets forth a number of suggestions related to health coverage and tax issues that would be affected by both versions of healthcare overhaul legislation.
At the outset, the Council rejects the House bill’s “pay or play” and minimum contribution requirements, which it believes would cause many employers to abandon their health benefit plans in favor of paying the 8 percent payroll tax penalty. The Council recommends the less restrictive employer responsibility provisions in the Senate bill, in addition to limiting these requirements to full-time employees only, and instituting a 90-day waiting period to protect employers with high turnover. The Council also advocates eliminating the Senate bill’s “free choice” vouchers and the House bill’s employer penalties for employees who opt-out of the employer plan. Instead, the Council recommends making available lower-cost catastrophic coverage plans for employees who cannot afford their employer-provided plans. Other recommendations include the following:
- Delete the House bill’s public option and include the Senate bill’s creation of multi-state, private health plan options offered through insurance exchanges, and the allowance of non-profit cooperatives to sponsor health plans through the exchanges;
- Preserve the ERISA framework for employer-sponsored coverage to allow employers to design benefit plans that meet the needs of their employees and permit multi-state employers to consistently administer these benefits;
- Delete the House bill’s requirement that allows individuals who become eligible for COBRA continuation coverage to remain enrolled in their former employer’s plan until the establishment of the health insurance exchanges;
- Include the Senate bill’s provisions permitting employers to discount up to 30 percent of the premium or cost-sharing requirements for participants in an employee wellness program;
- Delete both bills’ requirement that employers reduce their tax deductions by the amount they receive as subsidies for maintaining prescription drug coverage for Medicare-eligible retirees;
- Eliminate or reduce the Senate bill’s 40 percent excise tax on high cost benefit (“Cadillac”) plans;
- Eliminate or reduce the annual fees included in both bills on health insurers, third-party administrators of self-insured health plans, and pharmaceutical and medical device manufactures;
- Eliminate the premium taxes included in both bills on insured and self-insured plans;
- Increase the contribution limits to flexible spending arrangements above the $2,500 limit specified in both bills;
- Include the House bill’s tax equity provisions for domestic partners and others who do not qualify as spouses or dependents who are eligible for employer-sponsored health plan coverage.
The merging of the two healthcare bills will likely take place behind closed doors instead of through a formal conference committee in order to avoid anticipated parliamentary delays by Senate Republicans opposed to the measure. This afternoon, President Obama is scheduled to meet with several House leaders to discuss the healthcare bill.
Photo credit: MBPHOTO
