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Ambush is Coming

Today the National Labor Relations Board convened a two-day public hearing on its proposed “ambush election” rule, noticed earlier this year to demonstrate its supposed commitment to transparency and fair review.  This is the recycled rule—previously rejected by a Federal Appeals’ Court—which would shorten the timeframe, to as few as 10-14 days, in which a union election can take place after a petition is filed.  The rule would also prohibit certain challenges employers can currently make prior to the election and would also allow the union to receive employees’ private information, such as personal email addresses and home addresses and telephone numbers. It’s patently obvious that this rule is an attempt to stack the deck in favor of the radical agenda we’ve seen out of the NLRB for several years now. While this may be just a “show hearing” for the Board, manufacturers are taking this opportunity to again raise our voice in dissent – because ambush elections are as damaging as they sound.

The NAM will present on two topics tomorrow and stress that by “compressing the timeframe for a representation election, the proposed rules would eviscerate the right of employees to make an informed exercise of their rights, as well as impair the employers’ rights to communicate their position to employees.” The rule would also “chill the free, uninhibited, robust debate regarding the issue of unionization contemplated by Congress enacting the NLRA.”  The NAM will also point that requiring employers provide certain confidential information, such as personal email addresses, telephone numbers, home addresses, and work shift information will “provide a wealth of information rendering employees vulnerable to harassment or worse. Providing such information without safeguards exposes both the employee and employer to risk.”

While the idea of having this public hearing on its face would fit the definition of an open and transparent government rulemaking process, the hearing itself is more reminiscent of other public “hearings,” which have been held lately. Hearings where only one side is permitted to ask questions and presenters are limited to a mere five minutes to present one particular aspect of the proposed rule, rather than the rule as a whole.  In the end, it is hard to believe this hearing is anything more than checking the transparency box for the Board.  The reality is, employers should be preparing for an ambush election – and the Board should prepare for a fight.

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Ambush Election Comment Period Closes

Today, the comment period closes for the National Labor Relations Board (NLRB) proposed regulation on representation elections – or as we’ve come to call it, the Ambush Election Reg. The NAM has filed extensive comments opposing the regulation, which you can find here.

The NLRB’s proposed regulation fundamentally alters the way union elections are conducted by shortening the time between when a petition for election is filed and the actual election takes place. This time is critical to the process, because an employer is often unaware an organizing campaign was underway until the petition is filed. Under the proposed regulation, employers would have as few as 10-14 days from the day the petition is filed to the election taking place. In that short amount of time the employer must turn over employee contact information, draft a legal position about the election process and proposed collective bargaining unit or forever lose the right to bring it up, and determine how to communicate with its employees in a manner compliant with the National Labor Relations Act. All this would have to happen after retaining proper legal counsel in the event the employer doesn’t have in-house counsel.

The NAM’s comments take issue with virtually all aspects of the proposed regulation, but the central question the Board needs to answer – and so far has refused to answer – is why the change is needed at all. Why is it necessary to strip employers of their rights under the NLRA? Why is it necessary to require employers to disclose private employee information, including what days and times they work? Why is it necessary to fast-forward elections when the Board has met or exceeded its goals for over a decade? These are important questions the NLRB should answer before finalizing regulations that represent the most significant change to the election procedure in 50 years.

The NLRB will be holding a hearing on the proposed changes later this week – a scant three days from the comment deadline. It appears the Board majority really wants to hear and consider what the public has to say about the changes they’re asking for – three days to contemplate thousands of comments is reasonable, right? After all, that’s nearly a third of the time an employer would have before an election. I guess we shouldn’t be surprised, they are trying to institutionalize the ambush right?

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The Promise of Using a Pen and a Phone is Alive and Well

During the State of the Union, President Obama promised to use his pen to enact policy changes, but despite that promise, today’s action to change overtime pay came as a surprise. It was never on a list of regulations or rules that might come out, an agenda – this almost seems to have been done on a political whim. Regardless, bad policy is bad policy no matter how carefully it may have been considered – and today’s announcement is bad news for manufacturers looking to grow, invest and create jobs. In a Presidential Memorandum, the Secretary of Labor is directed to alter the current rules in which an employee is to receive overtime pay as set forth under the Fair Labor Standards Act (FLSA).  The current rules for overtime pay lay out a test based on a threshold weekly salary (currently set at $455/week), as well as whether an employee may perform duties in a certain job category (management, supervisory), which then would exempt the employee from overtime pay.  While we have yet to see the details of the proposal, it is inevitable that these new rules will create more costs for employers, rather than help create more jobs.

This move by the Administration should not be surprising, however, since the President has said he would do what he can on his own to raise wages. He has already raised the minimum wage for federal contractors, but if Congress remains relatively the same, it is unlikely a minimum wage bill will pass in its current form. What the Administration fails to realize, however, is that changing the rules for overtime pay, will not achieve the end game of creating more jobs.  In fact these new rules will have the opposite effect since employers will have to pull resources away from new jobs.  Although we lack any specificity on this latest set of bad ideas, we know from the outset that the new rules will only create more hurdles for growth and job creation.

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Medicare Advantage Is Important to Manufacturers

Medicare Advantage, Medicare+Choice, or Medicare Part C, has been in existence since 1986 and many employers have adopted the program as a seamless transition for their retirees to move from the coverage they are used to receiving from their employer-sponsored plan to their coverage under Medicare. Unfortunately, Medicare Advantage has also been used as a political scratching post over the last 20 years and was not spared from the claws of the Affordable Care Act.

Medicare Advantage plans sustained a reduction of 6.7 percent for 2014 and a recent ruling from the Centers for Medicare and Medicaid Services announced another reduction of more than 4 percent planned for 2015. These types of reductions will inevitably lead to fewer choices for seniors and retirees, because plans will leave the program. It also forces reductions in benefits, limited provider networks and increases in out-of-pocket costs.

The NAM has weighed in with CMS on these reductions and will continue to work with our partners in the business community to convince the Secretary of Health and Human Services and the Administrator of the Medicare program to reconsider their position on further reducing reimbursement rates for a program many employers participate in to ease the transition from the working years to retirement.

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Business Barbarians?

Yesterday, in what could only be interpreted as a window into what the Obama Administration really thinks about businesses in America, said unions are “the only guys keeping the barbarians at the gate.” He also lamented about a so-called “war on labor” being waged by businesses across the country.

I guess if you don’t capitulate to everything big labor bosses want that makes you a soldier in the “war on labor,” but perhaps the Vice President should take another look at who is trying to create jobs and who is pounding on the gate. While giving lip service to creating jobs, the Department of Labor and its various agencies have done more than any previous administration to stifle and inhibit job growth. The people you call barbarians are trying to create jobs, Mr. Vice President – that should be respected.

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Health Spending – Is It Raining?

Yesterday, the Administration rushed to claim that the Affordable Care Act has played a part in health expenditures slowing over the last four years. Such a claim is about the equivalent of pouring a glass of water on the ground and telling us it rained.

As a nation, we spend $2.8 trillion a year on healthcare products and services. This includes hospital stays, doctor visits, medicines, devices, biologics, nursing and home healthcare and over-the-counter consumer products. The Affordable Care Act, though impactful on the market in many ways, has by design had little to do with the overall trend line in healthcare spending since its passage. The actuaries at CMS acknowledge in their report that the ACA has had a negligible effect on healthcare spending to date, but it’s hard to believe that will be true in future years.

What we have always known about the ACA is that its impact will be felt in the out-years, which we’re entering right now. The data published yesterday is from 2012 and the full effect of the law was still two years ahead of us. It’s 2014 now and due to delays announced last year in forming the SHOP exchanges and the employer mandate, the law won’t be fully implemented until 2015. What we have seen so far in 2014 does not bode well for claims of reducing the cost of healthcare – premiums are increasing dramatically for many people in the individual market. On the employer side, the NAM recently surveyed its members and more than 90 percent are seeing increases in premiums and roughly 77 percent view health costs as a primary challenge in the years ahead.

For now, it appears the sluggish economy has had more of an impact on aggregate health spending over the last four years than any other factor, which is perhaps the proof in the old adage – for every silver lining, there is a cloud. Contrary to some assertions, however, it did not rain.

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ACA Will Cost Manufacturers $22.2 billion 2014-2016

It’s going to be a while before we can accurately measure the entire impact the Affordable Care Act has or is having on American businesses. However, I recently calculated some of the easily isolated costs of implementing the ACA for manufacturers over the next three years. By estimating the impact on manufacturers as an industry, I hoped to provide some perspective on what the law is asking of our economy as a whole and it’s not good.

Over the next three years, it will cost manufacturers in the United States at least $22.2 billion to cover just the new fees, taxes, surcharges and administrative compliance requirements contained in the ACA. This estimate only includes the $63.00 per participant reinsurance fee, the $2.00 per participant Patient Centered Outcomes Research Institute (PCORI) fee, additional paperwork and reporting requirements to the Internal Revenue Service and other agencies, the medical device manufacturer tax, and the pharmaceutical manufacturer tax. Again, these are just the new fees, taxes and administrative burdens manufacturers will have to pay over the next three years.

Employees and their families will not get one more doctor visit, one more prescription filled or any healthcare services at all. It’s simply added cost to manufacturers and likely lower wages for employees. According to the Kaiser Family Foundation, about 76 percent of manufacturers offer health insurance to their employees and roughly 83 percent of them enroll in their employer’s coverage, which is among the highest across industries. Manufacturers have consistently demonstrated a commitment to their workforce, but it is being undermined at nearly every turn by the ACA.

At no time in history has increasing the cost of everything associated with a product, service or good decreased the cost of that product.

The ACA is not a bill, it is not theoretical, it is the law. Manufacturers have no choice, but to follow it. The notion of doing away with the law is appealing in many regards, but also unrealistic. As the organization representing 12,000 manufacturers and 12 million people who make things here in America, we’re asking Members of Congress to look at all federal laws – including provisions of the ACA – that make it more expensive to provide coverage to employees and fix them so we can be competitive.

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Turning Back the Clock Is Not An Option With the ACA

Time travel has been the subject of some truly excellent fantasy stories – and it’s pretty reasonable to think that, at some point in their lives, everyone wishes that they had the opportunity to go back in time and change history. With the unfortunate start to the implementation of the Affordable Care Act, it seems that the White House wouldn’t mind having access to that technology.

In today’s press conference, President Obama announced that he will allow plans that have already been cancelled in the individual and small group markets to be renewed for the next year. If we were able to turn back the clock this might be an effective remedy, but the reality is that you can’t unscramble eggs. It’s a band-aid approach that reinforces the fact that at the very least, the Affordable Care Act was and is not nearly ready for primetime.

The solution offered today doesn’t fix a fundamentally flawed policy – it doesn’t lower costs and fails to address the difficulties that manufacturers continue to endure just to keep offering health coverage to their employees.

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Questions and Problems Are Front and Center with Affordable Care Act

Today, President Obama shared his concerns with the roll-out of his signature achievement thus far in his presidency. While much of the media’s attention over the last three weeks was understandably focused on the government shut down and negotiations to fund the government and avoid a default on our debt, the exchanges created by the Affordable Care Act has been faltering.

The main theme of the President’s remarks centered on the realization that the current enrollment problems are “unacceptable” and the administration is redoubling efforts to fix the glitches. The difficulties potential beneficiaries have had trying to find out what their options are for coverage through the exchanges have been documented and continue despite repeated attempts to fix what ails the government’s website. What hasn’t been well documented is the metrics by which we can determine whether the Affordable Care Act is successful or not – how many people have signed up for coverage? Are there any trends we can see with the population that has signed up already? Are they older, younger, sicker, or healthier than expected? What is the average subsidy being received by those who have signed up to date? There are many questions that could be answered that aren’t being answered – why?

Politically it makes sense the President hasn’t addressed the issues plaguing the exchanges until now – but the administration is hiding the football on who’s signed up for coverage through the federal exchange so far. We know the numbers are going to be low, because we know the problems with the portal are serious, but to claim you don’t have the information is farce.

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Administration Undermining Program But Still Taking Credit For Medicare Advantage (MA) Growth and Popularity

The Department of Health and Human Services recently cited the Affordable Care Act as the driving force behind the continued success and growth of the MA program, noting that enrollment in the program is projected to increase for the fourth straight year.

There is no disputing the facts. MA offers seniors and retiree’s quality, affordable health care coverage and better health outcomes, as MA seniors have less-emergency room and specialist visits compared to their Medicare fee-for-service counterparts, and are more likely to make greater use of preventive care and care in settings other than in the hospital. However, the Administration that takes credit for the program’s success also has a track record of undercutting the program, including:

  • The ACA mandated $200 Billion in cuts to MA (roughly 9.5% have taken effect so far);
  • The sequester cut $11 Billion from the Medicare program in 2013, and is estimated to take another $11 Billion from the program in 2014.
  • Beginning in 2014, the ACA imposes a health insurance tax that will cut MA rates by 2.4%, increasing the per-beneficiary cost of MA by $3,590 over a decade, and costing MA plans $34 Billion over that same time.

All told, the Administration has supported cuts that amount to a 6.7% reduction in funding for the program in 2014, leading to benefit reductions, premium increases, narrowed provider networks, and increased cost-sharing – all of which will negatively impact seniors. Health Plans and Employers have warned that additional cuts to this program will surely result in a grim outcome for one of the few programs that consistently delivers results – high quality, affordable benefit options tailored for the various needs of our nation’s seniors and retirees.

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