American Benefits Council
Benefits Byte


February 3, 2015

The Benefits Byte is the American Benefits Council’s regular e-mail and online newsletter for members only, providing timely reports on legislative, regulatory and judicial developments, along with updates on the Council’s activities in support of employer-sponsored benefit plans.

The Benefits Byte is published by the American Benefits Council, based on staff reports and edited by Jason Hammersla, Council director of communications. Contact information for Council staff related to specific topics can be found at the end of each story.

Click here to read past issues on the Benefits Byte Archive page.

Follow us on Twitter at @BenefitsCouncil

House Approves Repeal of PPACA; Repeal of Employer Mandate Introduced in Senate

The U.S. House of Representatives approved a measure, H.R. 596, to repeal the Patient Protection and Affordable Care Act (PPACA) by a party-line vote of 239-186 on February 3.

The vote is largely symbolic, since President Obama has announced that he will veto the bill, if it is approved by the Senate and presented to him for signature.   But the vote gives GOP House members – especially freshman representatives who campaigned on a platform of repealing the law – the opportunity to cast a vote in favor of repeal. 

What is noteworthy about H.R. 596 is the inclusion of new language setting forth the standards for “replacement” health care reform legislation. According to the bill, the House committees of jurisdiction would be directed to report legislation that would:

  1. foster economic growth and private sector job creation by eliminating job-killing policies and regulations.
  2. lower health care premiums through increased competition and choice.
  3. preserve a patient’s ability to keep his or her health plan if he or she likes it.
  4. provide people with pre-existing conditions access to affordable health coverage.
  5. reform the medical liability system to reduce unnecessary and wasteful health care spending.
  6. increase the number of insured Americans.
  7. protect the doctor-patient relationship.
  8. provide the states greater flexibility to administer Medicaid programs.
  9. expand incentives to encourage personal responsibility for health care coverage and costs.
  10. prohibit taxpayer funding of abortions and provide conscience protections for health care providers.
  11. eliminate duplicative government programs and wasteful spending.
  12. do not accelerate the insolvency of entitlement programs or increase the tax burden on Americans. 

An amendment to H.R. 596 would delay repeal of the PPACA until 180 days after enactment of the bill, presumably intended to give Congressional committees time to report “replacement” legislation complying with some or all of the 12 points above.  Such replacement legislation has not yet been introduced.

Senator Ted Cruz (R-TX) introduced a virtually identical measure in the U.S. Senate on February 2, with 44 co-sponsors. Leaders in that chamber have not announced a timetable for its consideration. While it possible that some Democratic Senators might support such a measure, it is very doubtful there would be enough Democratic support to overcome a procedural objection to the bill.

Meanwhile in the Senate, Finance Committee Chairman Orrin Hatch (R-UT) and Senate Health, Education, Labor and Pensions (HELP) Committee Chairman Lamar Alexander (R-TN) introduced the American Job Protection Act (S. 305), a bill to repeal the PPACA’s employer “shared responsibility” provisions.

The “shared responsibility” employer mandate, under Internal Revenue Code Section 4980H, which took effect on January 1, requires employers with at least 50 full-time (or equivalent) employees to offer health coverage that satisfies affordability and minimum value requirements to their full-time employees or pay a penalty if even one full-time employee receives a premium tax credit for health coverage obtained through a health insurance exchange. (Under transition relief for 2015, the employee threshold is 100; after 2015, the threshold is 50 employees.)

“Until we have a Republican president and can repeal Obamacare, the responsible thing to do is repeal the employer mandate –  one of several steps we can take to repair the damage Obamacare has done,” Alexander said in a joint news release unveiling the bill.

S. 305 has 26 additional cosponsors, all Republicans.  Action on the bill, in committee or on the Senate floor, has not yet been scheduled.

For more information on legislation addressing PPACA, contact Katy Spangler, senior vice president, health policy, or Kathryn Wilber, senior counsel, health policy, at (202) 289-6700.

American Benefits Council IN THE NEWS

The Council remains a resource the news media on employee benefits topics, contributing commentary and analysis on matters of the day.

The Council’s recent appearance before the U.S. Senate Health, Employment, Labor and Pensions (HELP) Committee was widely covered by the news media.

As we reported in the January 29 Benefits Byte, Dr. Catherine Baase, Chief Medical Officer for The Dow Chemical Company provided testimony to the HELP Committee on behalf of her company as well as the Council. The panel discussed employer wellness programs, including the cause and effect of legal action recently undertaken by the Equal Employment Opportunity Commission (EEOC).

Baase’s testimony was quoted in several articles, including:

  • A January 29 article for LifeHealthPro (“How could anyone object to wellness programs?”), which cites Baase’s testimony that the EEOC had brought legal action against employers notwithstanding that the agency has not yet issued guidance on employer wellness programs and interactions among the Patient Protection and Affordable Care Act (PPACA), the Genetic Information Nondiscrimination Act of 2008 (GINA), and the Americans with Disabilities Act (ADA).
  • A January 30 article for PlanSponsor (“Clarification Needed for Workplace Wellness Programs”) quoted Baase’s testimony. “To maintain global competitiveness and help to achieve health in our communities, American companies must encourage healthy behavior with every tool in our toolkit.” The article also noted her suggestion for Congress and the EEOC work within the existing legislative and regulatory framework to provide employers with certainty and flexibility.

Kathryn Wilber, senior counsel for health policy for the Council, was also sought for input on employer wellness programs. In a recent Managed Care Magazine article, Wilber discussed the sense that the EEOC is “an outlier among federal agencies” in regulating wellness programs. “The administration has generally been supportive of these kinds of programs, and this is the only provision implemented under the Affordable Care Act that has bipartisan support,” Wilber said.

With regard to wider issues surrounding PPACA and health care reform, Senior Vice President, Health Policy Katy Spangler recently outlined the potential revisions to PPACA that may be pursued in Congress in a webinar hosted by Business Insurance. Her comments were covered in several articles for the publication (Business Insurance webinar addresses health care reform complianceand Republicans take aim at health care reform law with proposed revisions). Spangler discussed the 40 percent excise tax on high cost plans, which goes into effect in 2018. Spangler noted that employers “will either do everything that they can to change their benefit structure to avoid the tax, or if it comes to it they might have to think whether or not it makes sense for them to continue offering benefits to their employees.”

The Council was also sought for comments with regard to President Obama’s Fiscal Year 2016 federal budget proposal, which was released on February 2 (see the February 2 Benefits Byte for more information). Council President James Klein provided comments to a Bloomberg BNA article on the concerns from the employer community on the proposal to allow the Pension Benefit Guaranty Corporation (PBGC) to adjust premiums for both single-employer and multiemployer programs. Klein stated that the authority to set rates should remain with Congress, which historically has “prudently made decisions about raising premiums,” though he noted that “in the past couple of years…members of Congress have viewed premiums as another source for unrelated initiatives.”

In a February 2 BenefitsPro article, Klein was quoted on the provision in the budget proposal to limit retirement savings in 401(k) plans and Individual Retirement Accounts (IRAs). The proposal was portrayed as capping contributions to, and accruals of additional benefits in, tax-preferred retirement plans and IRAs at “about $3.4 million, enough to provide an annual income of $210,000 in retirement.” But the Council noted in a statement that the proposal actually limits total retirement assets to the amount required to purchase an annuity, at age 62, of $210,000 per year. In the BenefitsPro article Klein noted that: “Politically, it is convenient to target people who have saved $3.4 million, but the devil is in the details when you look at the impact on younger workers and the inevitability that interest rates will rise over the coming decades.” 

Lynn Dudley, senior vice president of global retirement and compensation policy for the Council, was quoted on the same cap proposal in a February 2 Pensions & Investments article, noting that there’s “a lot of push and pull” but not a lot of discussion on a cohesive national retirement policy.

The Council was also quoted in other publications when the White House unveiled its retirement savings “cap” proposal prior to the President’s State of the Union address.  Quotes appeared in Employee Benefit News, Bloomberg BNA and Pensions & Investments.

For more information on the Council’s public relations activities, please contact Jason Hammersla, director, communications, or Jessie Chirico, communications assistant, at (202) 289-6700.

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.

Notice: the information contained herein is general in nature. It is not, and should not be construed as, accounting, consulting, legal or tax advice or opinion provided by the American Benefits Council or any of its employees. As required by the IRS, we inform you that any information contained herein was not intended or written to be used or referred to, and cannot be used or referred to (i) for the purpose of avoiding penalties under the Internal Revenue Code, or (ii) in promoting, marketing or recommending to another party any transaction or matter addressed herein (and any attachment).