BENEFITS BYTE

February 13, 2004
BB 04—18

In this issue:

  • Council Board Elects New Officers and Executive Committee Members
  • Senate Appoints Conferees for Pension Interest Rate Bill; Talking Points and Chart Now Available
  • Senate to Consider Limited Medical Liability Reform Bill Week of February 23

Council Board Elects New Officers and Executive Committee Members

At the Council's Board of Directors meeting February 8-10, the Board elected several Board members to fill a number of leadership positions within the organization. For a one-year term, the following individuals were elected as officers:

  • Chair of the Board of Directors: Michael Harrison, Avaya
  • Vice-Chair, Membership: Carl Lerner, Pfizer, Inc.
  • Vice-Chair, Operations: Kathleen Gubanich, The Vanguard Group
  • Treasurer: Robert Chambers, Helms Mulliss & Wicker
  • Secretary: Mitch Anderman, Bristol-Myers Squibb Company

In addition, W.B. (Chip) Howden of Southern Company, who completed his term as Chair of the Board of Directors at this meeting, now assumes the position of Past Chair.

In addition to electing officers, the Board also elected three new members to the Board's Executive Committee. They are:

  • Kathy Cissna, RJR Tobacco
  • Mike Ryan, Towers Perrin
  • Gretchen Young, Aon Consulting

Upon the election of all of these individuals to their respective leadership positions, Howden thanked the Board for its support during his period as Chair in 2003.

Senate Appoints Conferees for Pension Interest Rate Bill; Talking Points and Chart Now Available

The Senate has appointed conferees in the first move toward reconciliation of the House of Representatives and Senate pension interest rate legislation. Differing versions of the Pension Funding Equity Act (H.R. 3108), which would provide a two-year replacement of the 30-year Treasury bond rate used for calculating a defined benefit plans' funding liability with a rate based on conservatively invested long-term corporate bonds, were passed by the House on October 8, 2003, and by the Senate on January 28 — both by significant margins. The Senate bill includes a two-year relief provision for multiemployer plans and companies affected by the deficit reduction contribution (DRC). The Council has made available a one-page chart, prepared by the Benefits Group of Davis and Harman, illustrating the differences between the two bills.

The Senate leadership has announced that the Senate's conferees will be Senate Finance Committee Chairman Charles Grassley (R-IA) and ranking member Max Baucus (D-MT), Senate Health, Education, Labor and Pensions Committee Chairman Judd Gregg (R-NH) and ranking member Edward Kennedy (D-MA), and Senator Mitch McConnell (R-KY).

It is still unclear whether the House will go to conference in the short term, but there have been preliminary discussions among House leadership about the process for considering the legislation. There have been indications that some influential House members are still concerned about the extent of changes to H.R. 3108 made by the Senate. House and Senate staff are expected to meet at the end of next week to discuss the differences between the bills.

The Council once again urges members to continue to communicate with your Representatives and urge them to appoint conferees and proceed with legislation. Comprehensive talking points on pension interest rate reform are available. For more information, contact Lynn Dudley, Council vice president and senior counsel, at (202) 289-6700.

Senate to Consider Limited Medical Liability Reform Bill Week of February 23

Senate Majority Leader Bill Frist (R-TN) has announced that when the Senate returns from the Presidents' Day recess (February 16-20) it will consider the Healthy Mothers and Healthy Babies Act (S. 2061) which would place federal caps on damages awarded in lawsuits connected to obstetrical or gynecological goods and services. S. 2061 was introduced by Senate Health, Education, Labor and Pensions (HELP) Committee Chairman Judd Gregg (R-NH) on February 10. Senate Republicans have said they are likely to hold multiple votes on medical liability reform this year and target specific medical specialties that are experiencing the highest medical malpractice insurance increases in an effort to highlight Democratic opposition to reform. A broad medical liability reform bill (S. 11) failed to pass the Senate in July 2003.

S. 2061, like the House-passed H.R. 5, would establish a $250,000 cap on non-economic losses and allow punitive damages only under a strict statutory standard for malicious actions and limit them to the greater of twice the economic damages or $250,000 for lawsuits connected to the provision of obstetrical or gynecological goods and services. S. 2061 is unlikely to pass the Senate and medical liability reform legislation is not likely to be signed into law this year. Nonetheless, the Council will continue to promote the key priorities for employers and health plans, including the scope of the bill and provisions concerning reimbursement and subrogation, so they are resolved appropriately in medical liability proposals considered in the future. For more information, contact Maria Ghazal, Council director, retirement policy, at (202) 289-6700.

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The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system. The Council's members represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.