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Ex-House Staffer Tapped for Labor Department Benefits Post

Phyllis C. Borzi, a former longtime congressional pension and health care staffer, has been nominated as the Labor Department’s top benefits regulator.

March 27, 2009
Related Topics: Miscellaneous Legal Issues, Benefit Design and Communication, Latest News
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Phyllis C. Borzi, a former longtime congressional pension and health care staffer, has been nominated as the Labor Department’s top benefits regulator, the Obama administration said Thursday, March 26.

Borzi, who served 16 years as a pension and a benefits counsel for the House Education and Labor Committee’s Labor-Management Relations subcommittee, has been nominated by President Barack Obama to be assistant secretary of labor for the Employee Benefits Security Administration.

In her former position as a staffer for Democratic committee members, she was involved in drafting several pension and health care measures, including one that makes it more difficult for employers to deny coverage for new employees’ pre-existing medical conditions.

In 1993, she served on several working groups that were part of a presidential task force chaired by then-First Lady Hillary Rodham Clinton that put together a comprehensive health care reform package that Congress later rejected.

Borzi, a one-time high school English teacher, left Capitol Hill in 1995 after Republicans took control of the House of Representatives, joining the Department of Health Policy at George Washington University’s School of Public Health and Health Services in Washington as a research professor. She also is of counsel at Washington law firm O’Donoghue & O’Donoghue.

Borzi is widely known for her pro-organized labor positions.

In 2006, for example, she wrote a letter to the Service Employees International Union defending a Maryland law that required large employers in the state to spend a specific percentage of payroll on health care coverage or pay the difference to a state fund providing coverage to the low-income uninsured. The law, which was backed by the AFL-CIO, was written in such a way that it applied only to Wal-Mart Stores Inc.

In the letter, Borzi said it could be “reasonably argued,” based on Supreme Court precedent, that the Maryland law was not pre-empted by the Employee Retirement Income Security Act. While ERISA pre-empts state and local laws that relate to employee benefit plans, Borzi wrote that the Maryland law did not require employers to set up an ERISA plan or dictate the design of any health care plan it offered.

The 4th U.S. Circuit Court of Appeals ruled later that the Maryland law “directly clashes” with ERISA pre-emption and would have resulted in other states attempting to impose their own rules.

The ultimate result would have been that multistate employers would have to comply with varying benefit requirements, which ERISA pre-emption was intended to prevent, the court ruled.

The nomination is subject to Senate confirmation.

Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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