American Benefits Council

Employer coalition opposes S. 334 in letter to senators
July 7, 2008: The National Coalition on Benefits (NCB) has sent a letter to Senators Ron Wyden (D-OR) and Robert Bennett (R-UT) expressing opposition to the core provisions of the Healthy Americans Act (S. 334). Wyden introduced the bill in January 2007 and Bennett was the first Republican to sign on as a cosponsor.

As a member of the NCB’s steering committee and co-chair of its Legal and Legislative Developments subcommittee, the Council took the lead in drafting the letter to let the Senators know that S. 334 would have a major adverse impact on employer-sponsored health coverage. “The core provisions of the Healthy Americans Act would cause large scale disruption in the source, financing, and regulation of the employer-sponsored health coverage that now serves most Americans,” the letter states. “Moreover, widespread and sudden disruption in employer-sponsored health coverage is likely to harm employer-employee relations because most employees have a longstanding expectation that their employer will be their primary source for health coverage.”

The Council is a founding member of the coalition, which represents over 150 employers, trade associations and other organizations. NCB supports maintaining ERISA and its preemption standard so that employers are able to offer uniform benefits to employees and retirees without being subject to costly and conflicting state regulatory requirements.

REPORT: Accurate revenue estimates needed for retirement policy
June 3, 2008: The American Benefits Council and nine other advocacy organizations have issued a research report that highlights the need for accurate federal budget scorekeeping estimates for proposed legislative changes affecting retirement savings. The report, Revenue Estimates and Retirement Policy: The Need to Consider Present-Value Estimates of Changes in Tax Policy, concludes that the current federal budget scorekeeping rules—under which revenue effects are reflected on a cash-flow basis using a ten-year budget window—overstate the true costs of retirement savings proposals. These rules result in a distortion of the economic costs of tax deferrals, which are eventually paid, and inhibit the enactment of legislative proposals designed to increase retirement benefits for American workers.

Employer-sponsored retirement plans continue to play a crucial role in assuring financial security for the retirement for tens of millions of Americans. The long-term benefits of retirement plan tax incentives should be clarified by evaluating costs on a present-value basis. This would allow policymakers to consider legislative changes that could increase retirement savings for millions of Americans.

To speak with a Council staff member about the report or its conclusions, please contact Jason Hammersla, Council director, communications, at (202) 289-6700.

San Francisco case represents threat to ERISA; preemption standard essential for plan sponsors
April 15, 2007: “For more than 30 years, America’s voluntary employer-sponsored health care system has relied upon the federal standards provided by the Employee Retirement Income Security Act of 1974 (ERISA),” American Benefits Council President James A. Klein said at a media briefing today, two days before the U.S. Court of Appeals for the 9th Circuit is to hear oral arguments in the pivotal case regarding the San Francisco Health Care Security Ordinance.

“Innovation at the state and local level to expand access to health care coverage is important. But it must not come at the expense of ERISA’s critical preemption standards and the millions of people who rely on their employers for health care coverage,” Klein said. “The San Francisco law will restrict employers’ ability to uniformly administer multi-state health plans by forcing employers to make certain choices that result in modification or establishment of an employee benefit plan – exactly the sort of state or local regulation ERISA was intended to preempt.”

Representative Charles W. Boustany, Jr. (R-LA) participated in the Council’s media briefing to offer his perspective on the need to protect ERISA’s federal preemption standards. “Congressman Boustany has been an outspoken champion on this issue because he recognizes that ERISA’s protections benefit employees and their families, as well as employer plan sponsors,” Klein said.

To read the full media release, click here.

To arrange an interview with a Council staff member, please contact Jason Hammersla, Council director, communications, at (202) 289-6700.

House mental health “parity” bill treats behavioral conditions differently than other medical and surgical services
Senate measure represents a balanced and workable approach to parity
March 5, 2008:As the House of Representatives prepares to consider The Paul Wellstone Mental Health and Addiction Equity Act (H.R. 1424) today, American Benefits Council president James A. Klein urged the rejection of the bill’s burdensome approach and praised the more balanced, collaborative Senate-passed measure.

"The American Benefits Council believes strongly in health plan coverage parity for behavioral and other health conditions," Klein said. "Unfortunately, H.R. 1424 does not promote parity because it would treat coverage for mental and behavioral conditions differently than coverage for other medical and surgical services.

"The unintended result if the House bill becomes law could be to compel employers to either reduce health plan coverage generally, or eliminate mental health coverage altogether in order to offset the added cost and complexity of compliance,” noted Klein.

As Klein wrote in a March 3 letter to House leadership, it is essential that employers have flexibility in plan design with respect to benefits in and out of network, protection of the ability to ensure quality care through medical management practices, and federal uniformity in plan administration and remedies. “H.R. 1424 fails to meet these critical requirements for continued health plan sponsorship,” Klein said.

To read the Council's full statement, Click here. To reach a Council member for comment, contact Jason Hammersla, Council director, communications, at (202) 289-6700.

Council applauds new PBGC investment strategy
New diversification policy follows recommendation of Council’s 2005 report
February 19, 2008: "The Pension Benefit Guaranty Corporation’s (PBGC) decision to diversify its invested assets is a welcome change in policy," said Council President James A. Klein upon the recent announcement by the PBGC. "We applaud the agency for taking a bold step that should improve PBGC’s financial health for the long term."

This news validates a key recommendation of the September 2005 report, Promises to Keep: The True Nature of the Risks to the Defined Benefit Pension System, which explored the varying dimensions of the PBGC’s financial profile. The report argued that the agency’s financial standing has been hurt through its investment strategy; some of which is imposed by law and some of which the agency itself could modify. “The PBGC’s overall mix of all invested assets is overly conservative and heavily skewed toward fixed-income securities,” the report noted, indicating that the PBGC has not taken sufficient advantage of the higher long-term returns earned by equity investments.

"Pension policy should always be crafted by looking at the long view rather than based on a snapshot point in time," Klein said. "This more appropriate strategy, increasing investment in equities, will fulfill this philosophy by generating greater returns down the road."

Klein continued, "We continue to urge that PBGC use more market-based assumptions in the calculation of its assets and liabilities, for the sake of employers and employees who still rely on the traditional defined benefit pension system."

To arrange an interview with a Council staff member about the PBGC policy, contact Jason Hammersla, Council director, communications, at (202) 289-6700.

‘Safe and Sound’ retirement goals include raising financial literacy, expanding coverage
November 8:"The current voluntary employer-sponsored retirement system has been an enormous success," said Lynn Dudley, American Benefits Council vice president, retirement policy, at a hearing before the House of Representatives Health, Employment, Labor and Pensions (HELP) Subcommittee of the Education and Labor Committee. "The magnitude of America’s demographic challenges now dictates that individuals, employers and the government all need to do more to continue this success and ensure widespread retirement security."

Dudley’s testimony was drawn from the Council’s 2004 report Safe and Sound: A Ten-Year Plan for Promoting Personal Financial Security, which contains specific goals for improving retirement coverage and savings and discusses the responsibilities of the key stakeholders.

"The fact that individuals will be called upon to play a greater role in achieving personal financial security does not mean that employers or the government will be doing less," Dudley said. "As individuals play a more prominent role in achieving their own personal financial security, employers and the government will be expected to help provide the tools to more simply and successfully play this larger role."

The full text of the Council's media release is available in the Newsroom.

Benefits Byte (07/24/08)

Health IT Discussed, Approved in House Committee Action

Click here for details.

ERISA Preemption and State Health Reform Initiatives

The Council's ERISA Preemption Issue Page

The Council strongly believes that legislative responses that affect employers must build on the current federal framework which preserves uniformity in plan design and administration. The Council is a founding member of the Coalition on Benefits, a group of employers and employer associations dedicated to working with Congress to preserve ERISA benefits. Click here to find out how to join in this effort.

As Congress is considering how to address the problem of the working uninsured, one of the questions being raised is how the Employee Retirement Income Security Act of 1974 ("ERISA") will interact with state initiatives. ERISA "preempts" state laws that relate to employer sponsored employee benefit plans in order to promote the employer sponsorship of health plans and the uniform administration of benefits.

Simply put, ERISA preemption is vital to the voluntary sponsorship of health plans. Over 70 percent of American workers age 18 to 64 have employer-based health coverage. Employers depend on ERISA preemption to ensure that coverage can be offered uniformly across the country and administered relatively efficiently. ERISA preemption also gives each employer the flexibility to design the terms of health plans to meet the changing needs of their unique workforce and to attempt to control spiraling health care costs.