Employers Look to Retain Health Care Benefits as Congress Plans Reform

June 23, 2008
With the advent of a new Congress 18 months ago, many senators, representatives and advocates pressed for major health care reform before the 2008 presidential election.

Those heady days dissolved into a legislative grind. Democratic congressional majorities and the Bush administration couldn’t agree on how to expand a children’s health insurance program, let alone make larger changes.

Now Washington anticipates that next year the health care debate will begin in earnest. The Senate Finance Committee has scheduled a major forum June 16 to jump-start the discussion.

Titled “Prepare for Launch: Health Reform Summit,” the gathering is designed to educate Congress. Part of a series of hearings and events, it will feature Federal Reserve Chairman Ben Bern¬anke and other experts who will analyze rising health care costs, state reform efforts and company coverage trends.

On the latter issue, they’re likely to hear from employers who are wary of losing their role in the health care system, which depends in large part on company coverage. Although many corporations are urging the government to address the rising number of uninsured, most are not seeking to get out of the health care business.

An example of that attitude on Capitol Hill can be seen in a recent tweak to legislation—the Healthy Americans Act —that would require individuals to buy health insurance directly from private insurers. In the original bill, companies would pay into the system but would not sponsor their own plans.

In late April, the bill’s author, Sen. Ron Wyden, D-Oregon, modified the measure to clarify that companies could continue to offer health benefits.

“Today’s amendment comes in response to concerns expressed by individuals who are happy with their employer-sponsored health benefits and are afraid of losing their current coverage under a new system,” Wyden’s office said in a statement.

That sentiment reflects a powerful recruiting and retention tool that companies are reluctant to give up. Martin Reiser, manager of government policy for Xerox, says that many new hires base their decision to join the company on its benefit package.

“Health insurance is becoming more and more important,” he says.

Dow Chemical Co. has a similar stance on maintaining health care benefits. “Dow will be one of the last ones standing in terms of keeping our plans,” says Janet Boyd, the company’s director of government relations, tax and benefits.

Not only are companies not willing to cede benefits to government control, they’re taking a more active role in administering them. Wellness programs are becoming more popular as a way to increase productivity and profitability.

“We see good value in continuing to provide health care,” says William Tompkins, vice president of total rewards, HR systems and international HR at Gap Inc. He spoke at a Crain Communications health care forum in Chicago this spring.

With companies providing coverage for 132 million Americans, it’s likely they will remain a force in health care.

“It is not realistic to think we’re going to dismantle the employer-based system,” Reiser says.

—Mark Schoeff Jr.