American Benefits Council Archives - Shopfloor

Health Care: The Revealing Details, the Revealing Reaction

By | Health Care, Taxation | No Comments

At least tanning parlor operators who followed the health care debate knew they were going get hit with a 10 percent services tax. But the ski resort operators…

David Freddoso, Washington Examiner, “Five things we learned about Obamacare after it passed“:

Five: The ski-tourism industry suddenly realizes that it is endangered by Obamacare. Ski resorts must now provide health care or else pay a fine for each employee who works more than 120 days out of the year — and many of their employees do.

The bill had applied only at the 150-day threshold, until House Democrats changed it in reconciliation. They also cranked up the fine from $750 to $2,000 per employee, in order to pad their budget numbers.

Shoddy, shadowy revenue grabs. They should have just taxed ski resort operators 10 percent. The nexus to health care financing is just as direct as is the connection to tanning services.

The first, big “surprise” to follow enactment of the health care laws was the accounting charges taken by companies that will lose their tax deductions for providing Medicare Part D prescription drug coverage to their retirees. The legally mandated declarations irritated the Obama Administration, which initially claimed the companies were exaggerating the effects for political purposes. James Klein, president of the American Benefits Council, demolished that argument in a Wall Street Journal op-ed Tuesday, “The White House and the Writedowns.” Klein also points out what could probably serve as No. 6 on the list of things we’ve learned about the health care legislation after their passage.

The real story here—and the one that is getting little attention—is that the new law will likely result in a change of drug coverage for 1.5 million to two million retirees as they are moved from their employer-sponsored plans, according to a study we commissioned by former Office of Management and Budget official Don Moran. Reasonable people can differ as to whether shifting retirees to the Medicare drug program is good or bad policy. But two things are certain. First, it will cost the federal government more money. Second, employers will be excoriated when it happens.

When an administration is unwilling to accept criticism of two sentences in a 2,700-page law there is a problem. The White House needs to stop being so defensive. Here’s a new talking point for Press Secretary Robert Gibbs to try: “Overall, we are very proud of the sweeping legislation we have enacted. But we acknowledge that the drug-subsidy provision is having unintended, negative consequences for companies, and potentially also for retirees and government costs.”

Company Accounting Charges Will Reach $14 Billion

By | Health Care, Taxation | No Comments

From the American Benefits Council, which represents large U.S. corporations, a news release, “Exorbitant accounting hit to businesses will continue unless health law’s retiree drug subsidy provision is reversed“:

“For months, the American Benefits Council, along with several employers and labor unions, warned that the retiree drug subsidy tax in the health care legislation would impose an enormous hit on company financial statements as soon as the bill was signed into law,” Council President James A. Klein said today. “The recent announcements by major U.S. companies have captured Wall Street’s attention, while the Obama Administration fails to acknowledge their significance. Since the president has made clear that job creation is his top priority, we urge the Administration and Congress to remove this obstacle to economic recovery.

And …

“Over the next several days, many companies will be compelled to either take a hit on their earnings or decide to move retirees into the Medicare Part D program.” Klein said. “As our recent research report clearly shows, as more retirees are moved from employer plans to Medicare Part D, government outlays will increase, and the shift from employer retiree drug subsidy programs to Medicare Part D is likely to be significant. In the end, this so-called revenue raising provision may actually cost the government money.” A separate study, conducted by the Towers Watson consulting firm, reported that unless companies change their benefit plans, the aggregate accounting charge would be nearly $14 billion.

Safe prediction, Mr. Klein. Today’s news is: “Boeing Expects $150 Million Charge In 1Q For Health-Revamp Impact.” More …

Careful Consideration Needed of Health Care Legislation

By | Health Care | No Comments

References to the letter sent to Senate Majority Leader Harry Reid and Minority Leader McConnell by top business trade associations keep turning up in the media, so in the interest of transparency in advocacy, here it is. The date was July 9.

Dear Majority Leader Reid and Republican Leader McConnell:

On behalf of key employer associations, we believe it is critical to provide you with input from the employer community that currently provides health insurance coverage for over 170 million Americans.

The business community has been supportive of reform, as health care costs have continued to rise much faster than the rate of inflation. However, we believe that the process for consideration of reform needs to give the Committees of jurisdiction the appropriate time and process to carefully consider the impact of this legislation.

We strongly urge you to encourage the Senate Finance Committee to continue its discussions on a bipartisan basis to reach consensus on how to improve our health care system and continue to identify ways to expand coverage, without dramatically affecting those who do have coverage. We believe that careful consideration of the issues that affect 17 percent of our economy need to be done within the Committees of jurisdiction. Read More