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What to Watch for in ’05

November 4, 2004
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The new look of Washington, D.C., is likely to be more business-friendly than the past four years have been.

Not only have the Republicans kept the White House and held both houses of Congress, but some of the more moderate Democrats, like Sen. John Breaux, are leaving, putting a more liberal face on the Democratic Party.

For employers, this means a renewed focus on the agenda of the Bush administration and Republicans in Congress, including:

  • A potential effort by regulators to clarify parts of the Family and Medical Leave Act, reducing some confusion among employers about which health conditions qualify.
  • Tax changes to facilitate the spread of health savings accounts. Republican Rep. John Boehner, a proponent of health savings accounts who calls them "just what the doctor ordered," beat his Ohio opponent by a 69 to 31 percent margin. Congress could also allow "association health plans" to be offered by groups such as the National Restaurant Association.
  • Wage and hour law changes. In the Senate, Judd Gregg, the New Hampshire Republican who heads up the committee handling workforce issues, cruised to re-election with a 66 to 34 percent margin. Sen. Gregg may continue his chairmanship (if he doesn’t, Wyoming Sen. Mike Enzi could take his chairman’s spot). Gregg is likely to support business-friendly legislation, including the president’s efforts to bring comp time to the private sector.
  • Immigration-law changes. Some U.S employers -- particularly in the tech sector -- are upset that there aren’t enough visas to allow skilled employees to enter the United States. But Austin T. Fragomen Jr., a partner in the business immigration law firm of Fragomen, Del Rey, Bernsen & Loewy LLP, says employers might get help during the upcoming Congress. "The Bush administration and Republican Congress have been much more favorable toward business immigration issues … pretty much across the board," he says. Fragomen believes there’s a chance that Congress will allow more people to enter the United States if the immigrants have graduate degrees.

Also, the HR Policy Association, a lobbying group for senior executives in human resources, is hoping that the U.S. Department of Homeland Security writes business-friendly rules that allow I-9 forms to be filed electronically.

Opposition not quieting
Democrats -- despite being in the minority -- will be pushing for more government involvement in controlling health-care costs. The 1.7 million-member Service Employees International Union says that it won’t stop campaigning. Its efforts will continue through December to "remind elected officials that the top economic concern among all voters is health care and that they will be held accountable on the issue of health-care reform."

The union said that in this campaign, it made "the largest investment by any single organization in the history of American politics: a total of $65 million."

And former human resources executive Lynn Woolsey, who represents California’s sixth district -- a bastion of liberalism in Marin and Sonoma Counties -- tells Workforce Management she’ll work vigorously to make sure Republicans don’t "overreach," feeling that they have a mandate to pass legislation that in her view is damaging to rank-and-file employees.

Woolsey says that "the Democrats are going to propose some good programs" during the next Congress, citing her own effort to expand employee leave as an example, but also saying she’ll keep fighting for more employee-friendly changes to federal health-care laws.

Indeed, Tim Cullen, senior vice president of Blue Cross Blue Shield of Wisconsin, says that employers themselves may soon tire of lackluster results in the efforts to control health costs. Cullen tells the Milwaukee Journal-Sentinel that if costs don’t slow down by the next presidential election, businesses might "throw in the towel" and support far more government involvement in the health-care system.

Voters in California narrowly defeated Proposition 72, which would have forced medium and large employers to pay 80 percent of employees’ health insurance premiums or contribute to a state fund. Gretchen Young, vice president of government affairs for Aon Consulting, says that the initiative could have passed had the very popular California governor, Arnold Schwarzenegger, not opposed it. And, adds Young, some employers wouldn’t be too upset if the initiative went through--particularly those that currently pay for employees’ health care. "Employers who have (provided) health care are saying, ‘I want a level playing field,’ " Young says.

Some employers, Young says, also believe that if more employees are covered, it could reduce the costs of uncompensated care that are eventually paid for by all Californians.

--Todd Raphael

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