Below is the e-mail appeal from SHRM:
From: firstname.lastname@example.org [mailto:email@example.com]
Sent: Friday, November 06, 2009 5:00 PM
Subject: VOTE NO on H.R. 3962 - Affordable Health Care for America Act
Dear Michael James,
Federal Legislative Action Alert
YOUR ASSISTANCE IS NEEDED! Debate on comprehensive health care reform is at a crucial stage. The House of Representatives will consider H.R. 3962, the Affordable Health Care for America Act as early as this weekend. While SHRM strongly supports comprehensive health care reform that strengthens the employer-based system, promotes wellness programs and health promotion initiatives, strengthens the Employee Retirement Income Security Act (ERISA), increases purchaser and consumer access to cost and quality information and increases access to affordable health coverage, the House bill fails to achieve these goals.
Please contact your Representative today to urge a NO VOTE on H.R. 3962.
On October 29, the Democratic leaders of the U.S. House of Representatives unveiled their long-awaited fix for the nation’s health care delivery system. The bill, titled the Affordable Health Care for America Act (H.R. 3962), includes many provisions of interest to HR professionals.
Click HERE (warning - .pdf) to review a side-by-side comparison of the House and Senate bills.
Specific provisions of concern to HR professionals include:
Wellness Programs – Unfortunately, H.R. 3962 does not include provisions to facilitate greater availability of wellness programs among employers and employees. In addition, the measure does not include meaningful cost, quality, or transparency provisions to ensure that both employers and employees have better access to health-related information.
Employer Mandate – The bill requires employers to provide and pay for "qualified" health care coverage or face an 8 percent payroll tax. Employers must pay 72.5 percent of the premium for individuals and 65 percent of the premium for families. In addition, even if an employer provides and pays for health insurance coverage for their workforce, that employer could still be subject to an 8 percent payroll tax if employees decline employer coverage because it is unaffordable – defined as more than 12 percent of the employee’s income.
ERISA – H.R. 3962 would erode the Employee Retirement Income Security Act (ERISA) by applying state law remedies to employer purchased coverage in a health insurance exchange; prohibiting post-retirement reductions of retiree health benefits by group health plans, unless reductions are also made to active employees’ health benefits; and requiring employer-sponsored plans to meet detailed federal requirements that will increase costs.
Public Plan – The bill also includes a public insurance plan option that raises serious concerns about cost-shifting to private plans. Inadequate reimbursement practices under Medicare and Medicaid has resulted in significant cost-shifting to private plans, increasing costs for both employers and employees.
SHRM is committed to achieving comprehensive health care reform that provides high quality, affordable health coverage to all Americans in a manner that strengthens the voluntary employer-based system. HR professionals realize that the current system, which has health care costs rising faster than inflation, is unsustainable. That is why SHRM has supported efforts to control costs. To meet this goal, SHRM supports public policy that achieves the following:
Strengthens and improves the employer-based health care system;
Encourages greater use of health prevention, promotion, and wellness programs;
Strengthens the Employee Retirement Income Security Act (ERISA) to ensure a national, uniform framework for health care benefits;
Reduces health care costs by improving quality and transparency;
Ensures tax policy contributes to lower costs and greater access.
Please write your Members of Congress TODAY and urge them to oppose the Affordable Health Care for America Act. To write your elected officials using HRVoice, follow these steps:
- Log onto HR Voice by clicking HERE and enter your member number and last name.
- Under the heading "Take Immediate Action on these Hot Issues," click on: "VOTE NO on the Affordable Health Care for America Act (H.R. 3962)" and
- Feel free to personalize your letters by including specific information about the organization you work for, your experiences in the workplace, and why this legislation would negatively impact your organization. Just place your cursor on the text of the letter where you would like to edit.
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I don't have a ton of time, so I'm not going to extensively research everything, but I will now offer some rebuttal to the points made by SHRM. Feel free to bring flaws in the arguments to my attention or, if you have something to add to what I have come up with, please comment and help augment.
If you start hearing from your HR department or that of your friends or family about how bad the House health insurance reform bill is, at least now you will know why and maybe have some ability to counter their arguments.
Whine much there, SHRM? What, exactly, is stopping companies from offering wellness programs anyway even without getting paid for it by the government? Doesn’t helping your employees to stop smoking or do a better job of managing a chronic condition result in lower medical expenses and higher productivity? Look, if you want to be all business-y about it, take a look at your demographics and utilization data, run an ROI calculation and proceed accordingly, but this complaint is weak. Even if one concedes that the bill is lacking strong incentives to expand wellness programs, that hardly seems like enough of a reason to oppose it. It also fails to give everyone a pony, cure cancer or stop commercials from blaring from your TV much more loudly than the program you were just watching. Deal with it.
As far as having sufficient access to health-related information, if uninsured people suddenly found themselves able to actually see medical providers, I think that would go a long way towards filling in the information gap. Again, not much of a reason to oppose the bill as a whole.
Well, SHRM, employers could be relieved of this unfair burden if we would just implement single payer, but we’re talking about HR 3962, so I will focus on the substance of your complaint. This is an article from CFO dot com that explains how employee benefits comprise nearly 40% of payroll. Admittedly, the article is dated February 5, 2003 but here is a nice quote specific to medical benefits to think about:
Medical-related payments were the most expensive and the most common benefit offered. Medical benefits accounted for 11 percent of total gross payout, the largest share of employee benefit costs. And bear in mind, the Chamber of Commerce survey was for 2001. According to several different recent studies, premiums for employee healthcare insurance went up by around 13 percent in 2002.
So, it would seem that paying only 8% of payroll is actually a pretty good deal. Maybe I’m wrong about that, but only if medical benefits have become proportionally cheaper in 2009 than they were in 2001.
I guess it could be that, with fewer employer-sponsored benefit plans to administer, there might be fewer HR jobs, but we know you are only looking out for the interests of the companies, so that can't be it. In all seriousness, the rules for this should be evaluated carefully so that there is not too much disruption, but, in my view, if you are going to keep most of the existing coverage model, a pay or play system in conjunction with a strong public option seems like a good idea to me.
If it will be too costly and complicated and ERISA will be irretrievably damaged, then why would the employer not just choose to go ahead and pay the 8% payroll tax and wash their hands of the whole thing? You did just say doing this was an option in the section about the employer mandate, didn’t you? Not having to administer anything is certainly much less expensive than managing 50 different sets of rules. If anything, I would expect HR professionals to welcome more administrative complexity for the job security it would bring.
Besides, variations in state rules for things like payroll and worker's compensation already exist and companies are able to survive. In addition, variations in state rules for medical care already exist wherever companies choose fully-insured plans. As another example, there is already an ERISA exemption for health care in Hawaii, so it is not unprecedented to have to deal with some variations in rules among different states. Is it a hassle? No doubt, but you should more than make up for it in health care savings over time.
I would never try to claim that the reimbursement system is perfect, but "...serious concerns about cost-shifting to private plans?" Are you kidding? Without Medicare and Medicaid soaking up some of the worst risk profiles in the entire insurance pool as well as paying primary for most of your retired employees, private plans would be even more expensive than they are now.
You should get down on your corporate knees and thank whatever deity you pray to for the very existence of public programs like Medicare. I suppose an argument can be made that low reimbursement rates in some areas are unfair to private insurers operating in those areas, but the solution is to fix the reimbursement system, not screw your employees and fellow citizens out of a chance at affordable health care.
So, in conclusion, good people of SHRM, I did follow up by calling my Congressman today, but it was to do exactly the opposite of what you wanted. Of course, it didn't really matter, my Congresscritter is a Republican, so you can bank on him voting no on HR3962, but at least he is aware of my views and, at this point, so are you.