Trade Group Argues for Employer Health System Retention
January 19, 2010
(PLANSPONSOR.com) – An employer trade group has sent a letter to the Obama
Administration asserting that the final health-reform bill should continue to support
employer-based health coverage.
The letter from the ERISA Industry Committee (ERIC) also expressed the group’s
concern about the future viability of the employer health system if particular
aspects of the reform plan are enacted.
“The employer-based system in this country
rests on the foundations of national uniformity, affordability, voluntariness,
and the ability to spread risk across the entire employee population. These principals must be maintained in order
for the employer-based system to continue to provide 170 million Americans with
efficient, effective, and high quality health care,” said ERIC President Mark
Ugoretz, in the letter.
The document
warned that several proposals in the House and Senate bills now being
reconciled threaten to undermine the national uniformity guaranteed by 30 years
of federal law.
According to
Ugoretz, “the state waiver provisions, internal and external appeal
requirements, and the application of state remedy laws open the door to
curtailing the uniform regulatory structure that lowers costs, lessens
administrative burdens, and allows employees to keep their coverage if they
move.”
ERIC contended
that a “restrictive” employer mandate would end the ability of employers to
configure compensation and benefits tailored to the needs of their workforces.
“Unless employers
are able to align employee benefits and compensation with changing economic
circumstances, no employer will commit to long-term obligations,” Ugoretz
said.
The ERIC letter
also expressed reservations over the excise tax on high-cost plans that the
group said will lead to an overall reduction in health coverage offered to
employees.
The so-called “Cadillac
tax,” Ugoretz said in the letter, “ultimately will be borne by employees as well as
employers. This additional tax burden will not be paid out of some hidden pot
of money that employers maintain for rainy days. Rather, it is a cost that ultimately reduces
wages, benefits, or the number of employees on the employer's payroll. This is
a provision that will cost jobs and weaken, not strengthen, the nation's
health care system."
Finally, ERIC said
that employer-provided plans must still be able to spread risk over large pools
of employees. Any proposal that would give
incentives to healthy employees to leave the employer-sponsored coverage for
cheaper coverage through health-coverage exchanges, the group argued, would
cause premiums to skyrocket.
The letter is available here.
Fred Schneyer
editors@plansponsor.com