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Report, Surveys Begin to Flesh Out Details on Health Care Reform

Analysis is incomplete because the Kennedy proposal has not yet included details on issues that employers oppose, like a public plan option, taxing health benefits, changing ERISA or an employer mandate.

June 17, 2009
Related Topics: Financial Impact, Benefit Design and Communication, Health and Wellness, Latest News
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Health reform legislation introduced last week in the Senate would siphon about 15 million employees away from employer-sponsored coverage over the coming years, a finding that reflects concerns among employers that the plan could weaken employment-based health coverage.

The Congressional Budget Office, in a letter analyzing legislation drafted by Health Education Labor and Pensions Committee chairman Sen. Edward Kennedy, D-Massachusetts, said the proposal would cost more than $1 trillion over 10 years, with most of the cost coming from subsidies to help people buy insurance through regulated health exchanges. Despite the outlay, the CBO report said the plan would only reduce the ranks of the uninsured to about 36 million, in large part because people who are eligible for Medicaid won’t sign up.

Individuals leaving employer plans would find coverage in state-administered health insurance exchanges.

The analysis, the CBO admonished, is incomplete because the Kennedy proposal has not yet included details on issues that employers oppose, like a public plan option, taxing health benefits, changing ERISA or an employer mandate.

A survey of employers by the American Benefits Council and Miller & Chevalier published Wednesday, June 17, showed that 92 percent opposed any change to ERISA; and 82 percent of the 213 respondents said they wanted any reform proposal to maintain the tax exclusion of employee benefits, with 66 percent saying such a proposal would have a negative impact on their employees.

Despite the cost, 56 percent of respondents supported a government-administered exchange through which individuals and small groups could purchase insurance; 38 percent said an employer mandate would have a negative effect on their workforces.

The tax is likely to be included in a bill being drafted by the Senate Finance Committee, originally expected to be released June 17, but is now delayed.

Generally, employers believe that more focus should be given to improving the quality and reducing the cost of health care.

Despite opposition to current proposals from employers, a public opinion poll released June 16 by the Kaiser Family Foundation showed 69 percent supporting an employer mandate and 71 percent in favor of requiring individuals to purchase health insurance. Forty percent said they would support taxing their benefits to help pay for reform.

The opinion poll showed that 64 percent of the public think that big business groups are not supporting the president’s and congressional efforts to reform the health system.

—Jeremy Smerd

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