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Q&A: James Klein, American Benefits Council

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Q&A: James Klein, American Benefits Council

For years, employers have been grappling with the Patient Protection and Affordable Care Act as reform law provisions took effect and regulations were published. At the same time, federal lawmakers, especially Republicans in the House of Representatives, have launched drives to modify and, in some cases, repeal the law. In a recent conversation with Business Insurance Editor-at-Large Jerry Geisel, James Klein, president of the American Benefits Council, a Washington-based employer benefits lobbying organization, discusses the likelihood of further changes to the law. Edited excerpts follow.

Q: Many measures have been introduced in Congress that would amend the ACA. The one that has gone the furthest — to determine if employers are complying with a provision that will require them to offer coverage to full-time employees or pay a stiff penalty — would change the definition of a full-time employees to those working an average of 40 hours a week from the current 30-hour a week standard. What is the likelihood of that proposal winning approval?

A: There is no question that changing the definition of who is considered a full-time employee would be welcomed by many employers, who traditionally have not used a 30-hour weekly standard. The likelihood of that happening while possible — there is some bipartisan interest in it — is challenging. The Congressional Budget Office has estimated that the change from 30 to 40 hours would cost the federal government nearly $74 billion over 10 years. Congressional Demo-crats undoubtedly would try to find a way to require Republicans to pay for that revenue loss. Certainly, though, if Republicans were to take control of the Senate, the likelihood of that legislation going forward does increase.

Q: What other changes would employers like to see made to the law?

A: First, repeal or significant modification of the so-called Cadillac plan tax. If it can't be repealed, then creating a safe harbor so that employers can design around it. And more realistic indexing would be helpful. Second, the American Benefits Council has proposed establishing a mechanism so employers could fund health reimbursement arrangements, or similar accounts, so that individuals could purchase coverage in public exchanges. And third, repeal of the automatic enrollment requirement. Automatic enrollment has worked wonderfully in the retirement plan context, but in the health care context, where Americans are required to have coverage, it really is not needed. And, it can result in individuals being made ineligible for subsidies if they wanted to obtain coverage through public exchanges.

Q: A very visible benefit of the ACA has been the decrease in the number of uninsured. From an employer perspective, what have been other positive aspects of the law?

A: The employer community has always sought to address the uninsured problem. So the reduction in the number of uninsured is a positive. If the exchanges work, there is a possibility of repealing or modifying COBRA. We already have seen the public exchange become a venue for coverage for early retirees. Arguably, the law has created a better individual insurance market place where people can obtain coverage notwithstanding their health care conditions.

Q: What have been the negative aspects of the law?

A: The administrative demands are enormous. American Benefits Council members already provide excellent coverage. Yet the law requires them to jump through numerous hoops. On the other hand, small employers, where the level of coverage is of course the lowest, are exempt from the law. So, there is an inherent contradiction why should large employers, who are already providing excellent coverage, be required to take all these steps? Also, the rules implementing the law have made it much more difficult for employers to use outcomes-based wellness programs, which is a high priority for corporate America.

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