HR Urged to Speak Up on Health Reform Fixes

In crafting regulations, agencies welcome comments based on expertise and experience

By Stephen Miller, CEBS Sep 29, 2014

HR professionals can influence health care reform for the better by ensuring that policymakers hear their concerns, said James A. Klein, president of the American Benefits Council, a national trade association for benefit plan sponsors. Klein spoke on Sept. 22 at the 2014 Employer Healthcare & Benefits Congress, held at National Harbor, Md.

Opportunities to influence the Affordable Care Act’s (ACA’s) legislative and regulatory burdens include:

Submitting comments on proposed regulations.

Submitting testimony to congressional committees when hearings are held.

Joining the advocacy efforts of employer associations.

“You may love the law or you may hate it, but it’s here, and we need to make it work,” Klein said.

“If something comes up, make your voice heard, don’t sit back,” added Sibyl Bogardus, chief compliance officer at Hub International Insurance Services Inc., who co-presented with Klein.

“Focus on your unique expertise,” she added. “If you can bring to the attention of policymakers something practical, you can be heard. They are hungry for information on how to make this work.”

When making your case, “pick an issue that’s important, and explain why ‘this will not end well,’” Bogardus said. Do this with specifics, but “don’t go in with a problem unless you bring in a solution. Aim for win-win.” Showing how a modification would be “scored” as increasing federal revenue is particularly helpful.

Significantly, “Avoid debate over whether the ACA is a good or bad law. Instead, focus on what works and what doesn’t,” she noted.

Policymakers in the Dark

Implementation of the ACA is a tri-agency effort, Klein said, involving Treasury (including the IRS), Labor, and Health and Human Services (HHS). “Treasury and Labor are experienced in overseeing regulatory policies that affect employer plans,” but this is new ground for HHS, he pointed out. All three agencies have welcomed feedback, given the “monumental effort to promulgate rules” in a short time frame, Klein said, adding, “Never underestimate your ability to influence policy.”

As full implementation goes forward, “many stakeholders will emphasize practicality over ideology,” Klein believes. Areas where HR professionals might weigh in, drawing on their expertise, include:

Efforts to repeal or modify the 40 percent excise tax on high-cost plans, set to take effect in 2018. “Employers and unions both are concerned about the indexing thresholds and would like to see these raised,” Klein said. Employers, in particular, would also like policymakers to allow greater flexibility in plan designs to avoid triggering the tax.

Raising the definition of a full-time workweek from 30 hours to 40 hours, another area where employers and labor can work together.

Repealing or modifying COBRA in light of availability of coverage for departing employees through the public exchanges, with subsidies/tax credits for those with low incomes.

Allowing employers to use health reimbursement arrangements to subsidize, with pre-tax dollars, the purchase of exchange-based coverage by employees.

Fighting erosion of the Employee Retirement Income Security Act’s federal pre-emption, including efforts by some states to place limits on stop-loss coverage.

Blocking potential changes to favorable tax treatment of employer-sponsored health plans.

Comments Welcomed

All proposed regulations are issued with directions on how to submit comments, including by e-mail or through an agency portal. The easiest way to find these instructions is to go to the regulation and perform a search for the word “comment,” Klein explained, noting, “Your response doesn’t need to be overly formal or complicated.”

As an example of regulators’ willingness to respond to problems once brought to their attention, Klein observed that a regulatory conflict between the ACA’s 90-day limit on enrolling new employees and the availability of an orientation period beyond that limit was resolved by the issuance of an additional, clarifying final rule.

“It’s easy to be cynical about the political process, particularly in very partisan times. But I can tell you most [policymakers] want to do the right thing, and you possess a lot of information which they need,” Klein said. “You understand how these plans work within our organizations better than anybody else, and I urge you to share that information with elected officials and regulatory agencies.”

Plan Outlines Future of Employer-Sponsored Benefits

“The era of one-size-fits-all approaches to health and retirement benefits policy is over,” said Janet Boyd, director of government relations, tax and benefits for The Dow Chemical Co., at a Sept. 23 press briefing in Washington, D.C.

Boyd chairs the board of directors of the American Benefits Council, and the briefing marked the release of the council’s public policy strategic plan, A 2020 Vision: Flexibility and the Future of Employee Benefits.

The plan projects that the employee benefits environment five years from now will be characterized by integration of personal health and financial well-being, rather than health and retirement benefits existing in separate silos. Other foreseen developments include an emphasis on simplicity and predictability in benefit plan administration, and maximum flexibility for employers and employees.

The council’s recommendations for legislative and regulatory changes to facilitate these developments include:

Establishing a new type of account that would allow large employers to subsidize workers’ ability to purchase coverage through public exchanges.

Repealing or modifying the Affordable Care Act’s high-cost plan excise tax set to begin in 2018, and to repeal or modify COBRA and the automatic health care enrollment mandate.

Lowering to 45 the age at which individuals may make so-called “catch up” contributions to 401(k) plans (currently set at 55).

Allowing workers under age 62 to collect partial distributions from retirement plans while still working part-time, rather than forcing them into a rigid decision to be either a full-time employee or retired.

Creating a new regulatory paradigm for employee benefits that targets employers with poor performance rather than imposing the same administrative burdens on all plan sponsors.

Adopting a “presumption of good faith” standard that allows employers to use technology as it becomes available to communicate with participants, rather than waiting for regulatory approval.

“While many of these recommendations are far-reaching and aspirational, all of them are rooted in policy debates that are imperative for Congress and the executive branch to address,” Boyd said.

Stephen Miller, CEBS, is an online editor/manager for SHRM. Follow him on Twitter @SHRMsmiller.

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