Winchester Area Society for Human Resources Management
Legislative Update
December 2011
Penny H. Mathias, SPHR
HHS to Give States More Flexibility to Set 'Essential Health Benefits'
The U.S. Department of Health and Human Services (HHS) released anEssential Health Benefits Bulletin and related fact sheet on Dec. 16, 2011, outlining proposed policies intended to give states greater flexibility to implement the federal Patient Protection and Affordable Care Act (PPACA).The PPACA mandates that health insurance plans offered in the individual and small group markets provide a comprehensive package of items and services, known as “essential health benefits,” as determined byHHS. The new HHS bulletin describes an approach that would allow individual states tochoose one of the following health insurance plans to set the “benchmark” foritems and services included in the essential health benefits package:
• One of the three largest small group plans in the state.
• One of the three largest state employee health plans.
• One of the three largest federal employee health plan options.
• The largest health maintenance organization (HMO) plan offered in the state’s commercial market.
The benefits and services included in the health insurance plan selected by the state would be the essential health benefits package for that state. Plans could modify coverage within a benefit category so long as they did not reduce the value of coverage. If a state chooses not to select a benchmark, HHS intends to propose that the default benchmark will be the small group plan with the largest enrollment in the state.
Public input on this proposal is encouraged. Comments are due by Jan 31, 2012 and can be sent to .
Mandated Items and Services
Consistent with the reform law, states must ensure the essential health benefits package covers items and services in at least 10 categories of care:
• Ambulatory patient services.
• Emergency services.
• Hospitalization.
• Maternity and newborn care.
• Mental health and substance use disorder services, including behavioral health treatment.
• Prescription drugs.
• Rehabilitative and habilitative services and devices.
• Laboratory services.
• Preventive and wellness services and chronic disease management.
• Pediatric services, including oral and vision care.
If a state selects a plan that does not cover all 10 categories of care, the state will have the option to examine other benchmark insurance plans to determine the type of benefits that must be added to its essential health benefits package.
“More than 30 million Americans who newly have insurance coverage in 2014 will have a comprehensive benefit package,” said Sherry Glied, HHS assistant secretary for planning and evaluation, in a statement. “In addition to assuring comprehensive coverage for the newly insured, many millions of Americans buying their own insurance today will gain valuable new coverage, including more than 8 million Americans who currently do not have maternity coverage, and more than 1 million who will gain prescription drug coverage.”
Employers Express Concerns
Some business advocates expressed concerns that the approach could allow states to mandate a rich benefit package, particularly because the federal employees' health benefits plan is among the country's most generous packages.
"While the essential health benefits bulletin issued by HHS allows for flexibility, the devil will be in the details," said Neil Trautwein, chairman of the Essential Health Benefits Coalition, and employers group, in a released statement.
"The bulletin leaves unanswered the question of affordability in the states," he added. "Employers, health plans and state governments should have as much flexibility as possible in order to design and choose plans that are affordable and meet the needs of American families. HHS should continue to work to develop a rule that balances state-selected and reasonably comprehensive benefits with affordability for employers and individuals. A final rule that does otherwise will make health coverage more expensive for employers and individuals to purchase and make jobs more difficult for employers to create."
The HHS bulletin addresses only the services and items to be covered by health plans and not PPACA limits on cost-sharing such as deductibles, co-payments, and co-insurance. The cost-sharing features will be addressed in future bulletins and rules addressing formulas for determining the actuarial value of the plan.
Report Recommends Expansion of Legal Immigration
The United States should expand legal immigration, according to a Dec. 15, 2011, report finding that lawful immigration doesn’t take away jobs from Americans, as some assume, but instead helps stimulate job growth.“There are two basic theories of how immigration affects natives’ labor market outcomes,” notes the American Enterprise Institute for Public Policy Research and the Partnership for a New American Economy report, which was written by Madeline Zavodny, an economics professor at Agnes Scott College in Atlanta. “One is that immigrants have the same skills as U.S. natives and the two groups compete for jobs. In this view, immigration reduces natives’ employment.”
But the report took the opposite view that foreign-born workers complement U.S.-born workers. “Immigrants and natives have different skills, and immigration diversifies the workforce. Immigration results in more productive companies, stronger economic growth and higher employment among U.S. natives,” according to the report.
Four Findings:
- Immigrants with advanced degrees boost employment for U.S. natives, and the effect is most dramatic for immigrants with advanced degrees from U.S. universities and working in science, technology, engineering and mathematics (STEM).
- Temporary foreign workers—skilled and less skilled—boost U.S. employment.
- The report’s analysis showed no evidence that foreign-born workers hurt U.S. employment.
- Highly educated immigrants pay far more in taxes than they receive in benefits.
“The 38.5 million foreign born who live in the United States are a diverse group,” the report stated. “They are more than three times as likely as U.S. natives to lack a high school diploma, but they are also more likely to have a professional degree or doctorate. Accordingly, the foreign born are overrepresented in both less-skilled occupations, such as construction workers, housekeepers and agricultural laborers, and highly skilled occupations, such as medical scientists, physicians and chemists.”
Immigrants tend to work in intensive manual labor jobs that employers often have difficulty filling with U.S.-born workers, while natives specialize in jobs that require more communication skills, the report stated.
Approximately 70 percent of foreign-born workers in the United States are here legally. The legal immigrants are more likely than U.S.-born workers to have a bachelor’s degree or higher.
Immigrants help create jobs for natives through their entrepreneurial activities, the report added. For example, 25 percent of high-tech companies founded between 1995 and 2005 had at least one immigrant founder, and more than 40 percent of companies in the Fortune 500 in 2010 were founded by an immigrant or the child of an immigrant.
Job Growth
Comparing areas that receive large numbers of immigrants with areas that have relatively small numbers, the report concluded that each additional group of 100 H-1B workers was associated with an additional 183 jobs among U.S. natives during the sample period of 2001 through 2010. And for each additional 100 approved H-2B workers, there were an additional 464 jobs among U.S. natives.
“The particularly strong results for the H-2B program, which is for less-skilled nonagricultural workers, may be surprising given that some other studies conclude that less-skilled immigrants compete with similarly skilled U.S.-born workers,” the report stated. “The results here may reflect that employers, who find the H-2B program expensive and bureaucratic, tend to reserve it for hard-to-fill jobs that are critical to expanding operations. In addition, the results may be biased upward because the temporary worker analysis could not control for immigrants being drawn to areas experiencing strong economic growth and high employment.”
Recommendations
- Prioritize immigration by workers in STEM fields who hold advanced degrees from U.S. institutions.
- Shift the U.S. immigration policy’s focus to economic growth by increasing the number of green cards for highly skilled workers.
- Expand temporary worker programs for skilled and less-skilled foreign workers.
While the United States remains deadlocked over how to achieve comprehensive immigration reform, “the rest of the world competes for talent,” the report stated.
President Signs Into Law the ‘VOW to Hire Heroes Act of 2011’
On November 21, President Obama signed into law the VOW to Hire Heroes Act of 2011 (P.L. 112-56); legislation to encourage the hiring of military veterans. SHRM and other organizations have advocated for several of the changes to the various programssupporting veterans' employment that were included in the legislation.
Key provisions of interest to HR professionals:
- Requires individuals separating from the military and their spouse to participate in the Transition Assistance Program (TAP). The current TAP program is voluntary for separating military personal.
- Directs the federal government to enter into agreements with private organizations and others to provide job training assistance and develop apprenticeship or pre-apprenticeship programs that provides veterans with the education, training, and services necessary to transition to meaningful employment.
- Creates a two-year demonstration program in the Department of Labor on the credentialing and licensing of veterans for specific civilian occupations.
- Provides a new hiring credit called the Returning Heroes and Wounded Warrior Credit as an incentive to hire unemployed veterans. The VOW Act provides acredit of 40 percent of the first $6,000 in wages (up to $2,400) for employers that hire veterans unemployed for at least 4 weeks andcredit of up to 40 percent of the first $14,000 of wages (up to $5,600) for veterans who have been unemployed for at least 6 months.
- Maintains and doubles the existing Wounded Warriors Opportunity Tax Credit, increasing the value of the tax credit from $4,800 to $9,600 for veterans who have been unemployed for 6 months and have a service-connected disability.
In addition, the VOW Act also made changes to the tax code to allow qualified 501(c) tax exempt organizations to claims these credits against the employer portion of the Federal Insurance Contributions Act (FICA) tax.
Super Committee Fails to Agree on Deficit Plan; Payroll Tax Cut Extension Now Confronts Congress
On November 21, the co-chairs of the Joint Select Committee on Deficit Reduction, Representative Jeb Hensarling (R-TX)and Senator Patty Murray (D-WA), released a statement that the so-called “Super Committee” would not reach an agreement to stem the escalating federal debt by its November 23 deadline.
Officially known as the “Joint Select Committee on Deficit Reduction,” the panel was created by the Budget Control Act of 2011 and was charged with presenting legislation to reduce the budget deficit by at least $1.5 trillion over 10 years. This failure sets in motion automatic across-the-board cuts sufficient to reduce the deficit by a total of $1.2 trillion, starting in 2013 (divided equally between defense and non-defense discretionary spending) over the next 10 years, starting in January 2013.
Now the most high-profile workplace issue in Congress before the end of the year may be how to extend last year’s 2 percent cut in the payroll tax. While there is strong bipartisian support for extending the tax cut, paying for the payroll tax cut will be the biggest challenge.
Senator Bob Casey (D-PA) has introduced S. 1917, which would finance the tax cut with a 3.25 percent tax on the modified adjusted gross income of taxpayers earning $1,000,000 or more. Republicans have offered an alternative bill, S. 1931, introduced by Senator Dean Heller (R-NV). It would pay for the tax cut by extending the current pay freeze for federal workers and reducing the federal civilian work force by 20 percent through attrition.
On December 1, the Senate blocked both the Democratic and Republican versions of the payroll tax, rejecting a procedural motion to proceed (requiring 60 votes) to the Democratic proposal, S.1917 by a vote 51-49, and the Republican alternative, S1931, by 20-78. Action on the payroll tax is expected to continue as Congress tries to figure out a way to pay for the extension.
Source Documents: SHRM Online