Jan 19, 2010

ERIC Calls for Major-Employer Priorities for Final Health Care Bill

For Immediate Release

Washington, D.C. -- On January 18, 2010, The ERISA Industry Committee (ERIC), the Washington, D.C.-based trade association representing America's major employers, sent a letter to the Administration and key Members of Congress urging that health reform support employer-based health care and expressing concerns over its future viability if certain provisions of the health care reform bills are enacted.

"The employer-based system in this country rests on the foundations of national uniformity, affordability, voluntariness, and the ability to spread risk across the entire employee population. These principals must be maintained in order for the employer-based system to continue to provide 170 million Americans with efficient, effective, and high quality health care," said ERIC President Mark Ugoretz.

The letter warned that several proposals in the House and Senate bills threaten to undermine the national uniformity guaranteed by 30 years of federal law. According to Ugoretz, "the state waiver provisions, internal and external appeal requirements, and the application of state remedy laws open the door to curtailing the uniform regulatory structure that lowers costs, lessens administrative burdens, and allows employees to keep their coverage if they move."

ERIC further cautioned that a restrictive employer mandate would end the ability of employers to configure compensation and benefits tailored to the needs of their workforces.

"Unless employers are able to align employee benefits and compensation with changing economic circumstances, no employer will commit to long-term obligations," Ugoretz said.

The ERIC letter also expressed reservation over the excise tax on high cost plans penalizing employers that provide benefits and will lead to an overall reduction in health coverage offered to employees.

Ugoretz says the Cadillac tax "ultimately will be borne by employees as well as employers. This additional tax burden will not be paid out of some hidden pot of money that employers maintain for rainy days. Rather, it is a cost that ultimately reduces wages, benefits, or the number of employees on the employer's payroll. This is a provision that will cost jobs and weaken, not strengthen, the nation's healthcare system."

The ERIC letter stated opposition to any exception from the excise tax provisions for union workers. According to Ugoretz, "an exception for union workers would lead to a highly unjust system where similarly situated workers would be subject to taxation based on their union or non-union status and not because of the cost of their health plan or its benefits."

Finally, ERIC cautioned that employer-provided plans must retain the ability to spread risk over large pools of employees. Any proposal that would incentivize healthy employees to leave the employer-sponsored coverage for cheaper coverage through the exchanges would cause premiums to skyrocket and lead to the eventual demise of the employer-sponsored system.

A link to ERIC's letter is below.

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For more information:
Ted Godbout
Manager, Communications
The ERISA Industry Committee
1400 L Street, NW, Suite 350
Washington, DC 20005
Phone: (202) 789-1400
Fax: (202) 789-1120
tgodbout@eric.org
www.eric.org

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The ERISA Industry Committee (ERIC) is a non-profit association committed to representing the advancement of the employee retirement, health, and compensation plans of America's largest employers. ERIC's members provide benchmark retirement, health care coverage, compensation, and other economic security benefits directly to tens of millions of active and retired workers and their families. ERIC has a strong interest in proposals affecting its members' ability to deliver those benefits, their cost and their effectiveness, as well as the role of those benefits in the American economy.

Text Files:

ERIC Letter to President Obama and Key Members of Congress

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