<nobr>Jun 8, 2009</nobr>

ERIC Expresses "Concern" Over Proposals that Could Undermine Employer Health Plans

ERIC on June 8 sent a letter to Members of the five Congressional committees with jurisdiction over health care reform expressing concern over proposals that could weaken the current employment-based health system. The letters were based on a series of member conference calls over the past several weeks.

ERIC refers to five different proposals under consideration that have the potential to undermine employer plans: taxation of health care benefits, the creation of a public plan, employer mandates, employee opt-outs, and national uniformity/ERISA preemption. The letter was sent to: Senate Committee on Finance; Senate Committee on Health, Education, Labor, and Pensions; House Ways & Means Committee; House Energy and Commerce Committee; and House Education and Labor Committee.

The letter said, among other things, that ERIC is especially concerned that employer 'pay-or-play' mandates would permit employees to opt out of their employer's plan and opt in to a public plan or another plan offered through an exchange mechanism. It adds that allowing employees to opt out of employer-provided coverage will likely result in adverse selection, and that young, healthy employees who are looking for cheaper alternatives to employer-based coverage will be the first to opt out if the public plan rates are held artificially lower and thus have an unfair competitive advantage with employer plans.

ERIC also warned against curtailing the national uniformity on which employer plans depend under ERISA preemption. The letter said that without preemption the vast majority of employer health plans simply could not exist because of the administrative and other costs necessary to comply with multiple sets of rules and the consequences of having to offer different benefits to employees performing the same work but not living in the same location.

The letter also notes that ERIC submitted the comments "in the spirit of trying to play a constructive role in health care reform," and points to the "New Benefit Platform for Life Security" as an option for extending the advantages of its members' success to all employers, the self employed, and individuals, including those who have not been able to afford coverage.

Questions or comments on ERIC's letter or on health reform should be submitted to Gretchen Young (gyoung@eric.org).



Websites:

ERIC Letter to Congress

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