SHRM Addresses Health Care Reform in Letters to Congress, President

By SHRM Online staff Feb 26, 2010

In letters sent to the White House and House and Senate leadership on Feb. 22, 2010, the Society for Human Resource Management (SHRM) reiterated its support for health care reform legislation that lowers costs, strengthens the employer-based system, improves quality of care and offers all Americans affordable coverage.

The letters from SHRM President and CEO Laurence G. O’Neil went out the same day that President Barack Obama held a news conference unveiling he was dropping the proposed employer health coverage mandate from stalled health care reform legislation, and just days before a Feb. 25, 2010, bipartisan health care summit convened by the White House.

Obama’s latest proposal would force most employers who do not provide employee health coverage to pay into a fund that would help workers obtain insurance. It was an attempt to revive stalled health care reform legislation and was posted on the White House web site before the summit in order to gauge public reaction, SHRM Online reported.

In letters to the president, Senate Majority Leader Harry Reid, D-Nev., Speaker of the House Nancy Pelosi, D-Calif., Senate Minority Leader Mitch McConnell, R-Ky., and House Minority Leader John Boehner, R-Ohio, O’Neil outlined what SHRM believes a reform law should reflect:

Employer responsibilities.

SHRM wants legislation that omits the Senate’s “free choice” provisions, which SHRM says would require employers to provide vouchers to certain employees, “because this would likely destabilize employer-sponsored coverage.”

Employee Retirement Income Security Act (ERISA) structure for employer-sponsored coverage.

ERISA structure works and should be maintained, according to SHRM. It opposes House provisions “that would apply state law rights and remedies to employer-sponsored coverage obtained through an exchange and restrict changes to retiree health coverage.”

However, SHRM supports the Senate provision, which does not limit continuation of plans already in effect.

Workplace wellness incentives.

Wellness programs save organizations money ultimately by improving employee health and reducing overall health care costs, SHRM pointed out in the letters. It supports Senate provisions permitting employers to discount up to 30 percent of the premium or cost-sharing requirements for workers participating in employer wellness programs.

SHRM also wants health care reform legislation to include Senate provisions codifying current law protections in the Health Insurance Portability and Accountability Act regulations.

Flexible spending accounts (FSAs).

SHRM does not want a limit on how much individuals may contribute to their FSAs, believing that a limit would raise health care costs for unreimbursed health care expenses. SHRM urged lawmakers to raise the maximum for individual contributions above the $2,500 limit if a cap must be included in the health care reform legislation.

High-Cost Plan Excise Tax.

The Senate’s version of health care reform legislation passed in December 2009 contained a 40 percent excise tax on high-cost employer health insurance plans. This proposed tax is likely to cause major cuts in employer-provided health benefits, according to SHRM, because of health care inflation, differences among regions of the country, and the age of an employer’s workforce.

SHRM wants health care reform legislation that increases the tax threshold, noting that employers and employees cannot afford added health care costs.

SHRM asked that contributions to spending accounts or supplemental benefits such as vision, dental and wellness plans not be counted toward the excise tax threshold.

Retiree drug subsidies.

The president’s health care reform proposal would exclude the 28 percent drug subsidy for employers provided through the Medicare Modernization Act of 2003.

However, “altering the tax treatment of this subsidy would come at a significant cost to those organizations offering the most comprehensive coverage to current and future retirees,” O’Neil wrote; he urged eliminating those provisions from the bill.

Medical liability reform.

SHRM pointed to medical liability lawsuits as a contributor to rising health care costs. It advocates including reform of the medical liability system in final legislation as a component for cost containment.

Transparency and payment reforms.

SHRM favors provisions in the House and Senate bills that would help individuals be better informed medical consumers. Such provisions include access to Medicare claims data and to provider performance measures and outcomes.

Provisions that promote transparency and reward efficient care should be strengthened, according to SHRM.

Copies of the letters were sent to the chairman and ranking member of the Senate Committee on Finance; Senate Committee on Health, Education, Labor and Pensions; House Committee on Education and Labor; House Committee on Energy and Commerce; and the House Committee on Ways and Means.

Related Resource:

Health Care Reform page, SHRM Online

Related Articles:

Some Health Care Reform Requirements Would Take Effect Quickly, SHRM Legal Issues, Jan. 14, 2010

U.S. Senate Passes Historic Health Reform Bill, HR News, Dec. 24, 2009

House Passes Landmark Health Reform Bill, HR News, Nov. 8, 2009


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