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CCH® BENEFITS — 1/15/08

Employer Organizations Speak Up Regarding Health Care Reform

From Spencer's Benefits Reports: Increasing numbers of employer associations have suggested major reforms to the current system of employment-based health care benefits. According to the Employee Benefit Research Institute (EBRI), “These initiatives indicate that employer associations are positioning themselves for the health care debate tied to a new presidency in 2009, and the prominence of the issue leading up to the 2008 election.”

Almost all employer-based organizations now agree that the status quo no longer is workable. Following are brief explanations of these organizations’ efforts:

Committee for Economic Development (CED). In November 2006, the CED, an organization of business leaders and educators, released recommendations for continuing to maintain some form of an employment-based health benefits system. However, in October 2007, the CED released a new set of recommendations calling for the end of the employer-based health insurance system and the establishment of a subsidized system of individual insurance based in part on the Federal Employees’ Health Benefits Program (FEHBP).

According to the CED report, a government-run, command-and-control system will not succeed; and devolving complex medical decisions from doctors to patients will not yield affordable care either.

Two key steps would establish an individual insurance system driven by cost-conscious consumer choice, according to the CED report, as follows:

In step one, the federal government would establish independent regional “exchanges” as points of entry for people to choose among competing private health care plans.

In step two, subject to progress by the exchanges and the willingness of the public to provide the financing, every household would receive a fixed-dollar credit sufficient to purchase the low-priced quality health care plan offered in that region.

For more information, visit http://www.ced.org/.

ERISA Industry Committee (ERIC). In June 2007, ERIC, a membership organization representing the employee benefit plans of the largest U.S. corporations, released a paper entitled “New Benefit Platform for Life Security.” ERIC outlines a proposed structure that employers could use as an alternative to the current way in which they provide both health and retirement benefits. This proposal has some similarities to the CED proposal, such as the use of an exchange combined with a fixed dollar contribution from employers.

For more information, visit http://www.eric.org/.

Divided We Fail. Several business coalitions also have partnered to promote various positions on health care reform. For example, the Business Roundtable and the National Federation of Independent Business (NFIB) have partnered with AARP and the Service Employees International Union (SEIU) to promote the “Divided We Fail Partnership.” The partnership has four guiding principles:

• Need for health care and financial security. All Americans have a need for access to health care and long-term financial security.
• Access to affordable coverage. All Americans should have access to affordable health care, including prescription drugs, and these costs should not burden future generations.
• Focus on prevention. Wellness and prevention efforts, including changes in personal behavior such as diet and exercise, should be top national priorities.
• Choices for long term care. Americans should have choices when it comes to long term care, allowing them to maintain their independence at home or in their communities with expanded and affordable financing options.

The partnership does not, however, suggest a path to achieving the guiding principles.

For more information, visit http://www.dividedwefail.org.

Coalition to Advance Health Care Reform (CAHR). This group of more than 50 employers and business leaders is more specific in its recommendations for market-based solutions to address the uninsured and health care quality. Members of CAHR believe the following five core elements are essential to any meaningful reform:

• a market-based health care system;
• universal coverage with individual responsibility;
• financial assistance for low-income individuals;
• healthier behavior and incentives; and
• equal tax treatment.

For more information, visit http://www.coalition4healthcare.org/.

HR Policy Association. In 2006, this group, representing the chief human resources officers in the largest U.S. corporations, established a National Health Access Program to provide access to coverage for a broad array of workers without traditional employer coverage. Although National Health Access continues to operate, the program has not succeeded in meeting its participation goals.

The HR Policy Association currently is developing a comprehensive position on health care reform. The Association’s members are committed to maintaining the nation’s system of employment-based health insurance if and only if major reforms can be achieved. Its commitment is contingent on near-term adoption of dramatic improvements that can help contain skyrocketing costs, improve efficiency and value, and improve overall quality.

For more information, visit http://www.hrpolicy.org/.

For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.

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