State based universal health care, large employers and ERISA
September’s FTAC meeting was jam packed. We had Bill Kramer discuss large employers’ perspectives on State-based universal health care (SBUHC) and Erin Fuse Brown on ERISA considerations for the UHCC.
Mr. Kramer highlighted that large employers can be open to SBUHC as the cost of health care has impacted their ability to remain competitive in their search for qualified employees.
Ms. Fuse Brown laid out a three point strategy that the UHCC could adapt to overcome an ERISA challenge.
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Now on to the first presentation by Mr. Kramer.
To attract qualified employees many large employers are offering increased services in primary care, mental health, maternity services and more of a focus on health equity.
But there are issues:
- How to ensure any state based universal plan is as good as what large employers already offer
- How to comply across borders
- How to deal with additional payroll tax
- How to deal with the loss of control.
- Most importantly — risk aversion - no one wants to be first!
Mr. Kramer’s presentation highlighted that to make any universal health care plan acceptable to large employers, there must be:
- Cost control
- Administrative simplicity
- Possibility to offer their own plan or choice of plans with a broad choice of providers
One of the more interesting questions was from Dave Iseminger who asked how international companies manage healthcare benefits in countries that offer universal health care? The short answer is they comply with the country's laws. Finally, Mr. Kramer added that many large employers think other countries do health care better but are skeptical if the USA can offer a universal healthcare system.
Now on to Erin Fuse Brown and ERISA considerations for the UHCC.
An overview of Affordable Care Act (ACA) requirements for employers and ERISA
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ACA kept employer-based insurance (EBI)
- 52% of WA state residents have EBI
- ERISA prohibits the regulation of these plans by the state
- There are no waivers for ERISA, they are only for Medicare, Medicaid and ACA
- The courts have not issued clear judgements about ERISA preemptions
Strategies to overcome ERISA’s challenges
Type A – Funding Plan: A payroll tax as percentage of wages paid and not based on the employer’s benefits expenditures. This would be technically beyond the reach of ERISA.
Type B – Provider incentives: The state can offer administrative simplicity like timely payments and less time spent fighting with insurers to draw medical professionals away from private plans. These are beyond the scope of ERISA so preemption should not apply.
Type C – Assignment/Subrogation/Secondary Payer. While transitioning to a SBUHC system providers still need to be paid. The plan would need to pay for services and seek reimbursement until the transition is complete.