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Labor, self-insurance group align on health care benefits

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WASHINGTON — The Self-Insurance Institute of America Inc. plans to continue cooperating with organized labor in pursuit of common goals, according to the SIIA's president and CEO.

The Simpsonville, South Carolina-based SIIA has traditionally worked with business organizations such as the U.S. Chamber of Commerce. Now “we're doing more outreach” to organized labor, said SIIA President and CEO Mike Ferguson.

He noted that organized labor generally has better relations with Democratic lawmakers than business does during a panel discussion on defending the self-insurance industry at SIIA's annual conference in Washington last week.

In an interview after the discussion, Mr. Ferguson said many union members are receiving health benefits under multiemployer Taft-Hartley plans that use stop-loss insurance. Some states, however, have targeted the use of stop-loss insurance by self-funded employers. Mr. Ferguson said that many of SIIA's members' are business partners of Taft-Hartley plans.

A multiemployer plan is a collectively bargained plan maintained by more than one employer, usually within the same or related industries, and a labor union. These plans are often referred to as “Taft-Hartley plans.”

“We're trying to demonstrate that this isn't just a private employer issue,” said Mr. Ferguson. “It's a broadening of our coalition.”

“How often do you see business and labor line up on the same side?” he asked.

“Stop-loss is crucial for protecting efficient, quality health care coverage for millions of workers and their families,” Edward Smith, president and CEO of Washington-based insurer Ullico Inc., which provides life and health insurance for unions and group plans, said in an email. “Working with the SIIA on this issue is a win-win — it strengthens the voices of union members whose health care coverage is protected by stop-loss.”

During the panel discussion, Jerry Castelloe, chairman of the SIIA government relations committee, said numerous issues affecting self-insurance have arisen in the past few years. For example, he also noted that state regulators are showing considerable interest in regulating stop-loss insurance.

On the federal level, SIIA has commented on so-called “Cadillac tax” health care regulations, he said. The Patient Protection and Affordable Care Act calls for imposing a 40% excise tax on the portion of premiums above $10,200 for individual coverage and $27,500 for family coverage beginning in coverage year 2018. Mr. Castelloe said SIIA's comments have dealt with such questions as how a benefit potentially subject to the tax would be valued, what plans would be included and who would ultimately be responsible for paying the tax.

Also on the federal level, SIIA is focusing on passing the Self-Insurance Protection Act, which has been introduced in both houses of Congress. The act would amend the Public Health Service Act, the Employee Retirement Income Security Act and the Internal Revenue Code to exclude coverage of certain medical stop-loss insurance obtained by sponsors of self-insured group health plans from the definition of health insurance.

ERISA pre-empts states from mandating the content of self-funded benefit plans. In addition, self-funded benefit plans are exempt from many of the provisions of the Affordable Care Act.

“We continue to have engagements with Congress,” said Mr. Castelloe, urging conference attendees to visit their members of Congress to discuss the measure.

Bob Tierney, chairman of the Self-Insurance PAC board of trustees, picked up on the theme of the importance of personal contact with lawmakers. He said that when a group of SIIA members visits a lawmaker, it's important to have someone from that lawmaker's state in the room.

“SIPAC gives SIIA the vehicle to strengthen its voice on the federal and state level,” said Mr. Tierney. “It's really where policy and politics meet.” He added that the political action committee has raised $40,000 this year and “we're likely to increase that.”

John Eggertsen, an attorney with Eggertsen Consulting P.C. in Ann Arbor, Michigan, noted that there “really haven't been that many cases in the past couple of years” dealing with ERISA.

But SIIA is involved in a case in which a federal appeals court decision upheld a Michigan law that imposes a 1% tax on paid health care claims.

Under that law, revenue generated by the tax, which is used to help fund the state's Medicaid program, is paid by health insurers offering fully insured plans and by third-party claims administrators in the case of self-insured plans.

SIIA argues that the tax is barred by an ERISA provision that pre-empts state and local laws and rules that relate to employee benefit plans and is seeking U.S. Supreme Court review of the case.