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Employer Action Code: Analyze
Health care reform advances, while obstacles loom
Health care reform took important steps forward in July in the United States, when four of the congressional committees responsible for moving the legislation approved proposals. However, despite the progress made, obstacles remain in the legislative path to reform, including escalating concern about proposal costs and divergent opinions among key groups of lawmakers. Lawmakers must forge consensus before any legislation can be presented for President Obama’s signature.
Key details
The main developments in July were:
- The Senate Health, Education, Labor and Pensions (HELP) Committee became the first committee to approve a health care reform proposal on July 15.
- On July 17, two of the three House committees involved in health care reform approved different versions of America’s Affordable Health Choices Act: the House Ways and Means Committee and the House Education and Labor Committee. In both cases, some Democrats voted against the legislation.
- On July 31, the House Energy and Commerce Committee became the last of the three presiding House committees to approve America’s Affordable Health Choices Act.
- The HELP Committee and House proposals include some common elements, such as requiring that most individuals obtain health coverage or pay a penalty; requiring employers to offer coverage and either contribute to the cost of premiums or pay into the system (“pay or play”); and establishing a public plan option, among others.
- There are also some important differences, such as in employer mandates. Under the HELP Committee proposal, employers would have to either contribute 60 percent of premium costs or pay USD 750 for each full-time employee and USD 375 for each part-time employee. The House proposal would require employers that offer coverage to contribute more – 72.5 percent of the premium for individual coverage, 65 percent for family coverage and prorated contributions for part-time employees. Employers that elected not to offer and contribute to employees’ coverage would pay 8 percent of payroll. Both proposals would exempt small employers.
During Congress’ August recess, House leaders and key lawmakers will begin merging the three committee proposals into a unified bill for debate and vote on the House floor in September. In the Senate, the Finance Committee – which has jurisdiction over health care reform but has not yet released a proposal – will continue its negotiations, with the goal of moving a proposal through the committee in September. Then, Senate leaders and key lawmakers will have to negotiate a compromise between the Finance and HELP Committee proposals for debate on the Senate floor. The Senate version of this process will be difficult because of Senate procedures and because key elements of the proposals are likely to differ significantly.
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July,
2009
The information included in this report is general information only and should not be relied upon without further review by the appropriate professional advisers. Watson Wyatt is not a law firm or an accounting firm and is not engaged in providing legal, accounting or tax services or advice.
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