[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]




 
                 FIVE YEARS OF BROKEN PROMISES: HOW THE
                PRESIDENT'S HEALTH CARE LAW IS AFFECTING
                          AMERICA'S WORKPLACES

=======================================================================

                                HEARING

                               before the

                        SUBCOMMITTEE ON HEALTH,
                    EMPLOYMENT, LABOR, AND PENSIONS

                         COMMITTEE ON EDUCATION
                           AND THE WORKFORCE

                     U.S. House of Representatives

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

             HEARING HELD IN WASHINGTON, DC, APRIL 14, 2015

                               __________

                            Serial No. 114-8

                               __________

  Printed for the use of the Committee on Education and the Workforce
  
  
  
  
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                COMMITTEE ON EDUCATION AND THE WORKFORCE

                    JOHN KLINE, Minnesota, Chairman

Joe Wilson, South Carolina           Robert C. ``Bobby'' Scott, 
Virginia Foxx, North Carolina            Virginia
Duncan Hunter, California              Ranking Member
David P. Roe, Tennessee              Ruben Hinojosa, Texas
Glenn Thompson, Pennsylvania         Susan A. Davis, California
Tim Walberg, Michigan                Raul M. Grijalva, Arizona
Matt Salmon, Arizona                 Joe Courtney, Connecticut
Brett Guthrie, Kentucky              Marcia L. Fudge, Ohio
Todd Rokita, Indiana                 Jared Polis, Colorado
Lou Barletta, Pennsylvania           Gregorio Kilili Camacho Sablan,
Joseph J. Heck, Nevada                 Northern Mariana Islands
Luke Messer, Indiana                 Frederica S. Wilson, Florida
Bradley Byrne, Alabama               Suzanne Bonamici, Oregon
David Brat, Virginia                 Mark Pocan, Wisconsin
Buddy Carter, Georgia                Mark Takano, California
Michael D. Bishop, Michigan          Hakeem S. Jeffries, New York
Glenn Grothman, Wisconsin            Katherine M. Clark, Massachusetts
Steve Russell, Oklahoma              Alma S. Adams, North Carolina
Carlos Curbelo, Florida              Mark DeSaulnier, California
Elise Stefanik, New York
Rick Allen, Georgia

                    Juliane Sullivan, Staff Director
                 Denise Forte, Minority Staff Director
                                 ------                                

        SUBCOMMITTEE ON HEALTH, EMPLOYMENT, LABOR, AND PENSIONS

                   DAVID P. ROE, Tennessee, Chairman

Joe Wilson, South Carolina           Jared Polis, Colorado,
Virginia Foxx, North Carolina          Ranking Member
Tim Walberg, Michigan                Joe Courtney, Connecticut
Matt Salmon, Arizona                 Mark Pocan, Wisconsin
Brett Guthrie, Kentucky              Ruben Hinojosa, Texas
Lou Barletta, Pennsylvania           Gregorio Kilili Camacho Sablan,
Joseph J. Heck, Nevada                 Northern Mariana Islands
Luke Messer, Indiana                 Frederica S. Wilson, Florida
Bradley Byrne, Alabama               Suzanne Bonamici, Oregon
Buddy Carter, Georgia                Mark Takano, California
Glenn Grothman, Wisconsin            Hakeem S. Jeffries, New York
Rick Allen, Georgia



                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held on April 14, 2015...................................     1

Statement of Members:
    Roe, Hon. David P., Chairman, Subcommittee on Health, 
      Employment, Labor, and Pensions............................     1
        Prepared statement of....................................     3
    Polis, Hon. Jared, Ranking Member, Subcommittee on Health, 
      Employment, Labor, and Pensions............................     4
        Prepared statement of....................................     6

Statement of Witnesses:
    Troy, Hon. Tevi, Ph.D., President, American Health Policy 
      Institute, Washington, DC..................................     9
        Prepared statement of....................................    11
    Paal Jr., Mr. Rutland, President, Rutland Beard Floral Group, 
      Scotch Plains, NJ..........................................    17
        Prepared statement of....................................    19
    Brey, Mr. Michael, President, Brey Corporation t/a Hobby 
      Works(R), WingTOTE Manufacturing, LLC, Laurel, MD..........    26
        Prepared statement of....................................    28
    Roberts, Ms. Sally, Human Resources Director, Morris 
      Communications Company, LLC, Augusta, GA...................    30
        Prepared statement of....................................    32

Additional Submissions:
    Dr. Roe:.....................................................
        Prepared Statement of the National Coalition on Benefits.    76
    Courtney, Hon. Joe, a Representative in Congress from the 
      State of Connecticut:
        Chart: 2014 Connecticut Insurance Rate Filings for On/Off 
          Exchange 2015 Policies.................................    58
    Hinojosa, Hon. Ruben, a Representative in Congress from the 
      State of Texas:
        Letter dated April 14, 2015, from Small Business Majority    67
    Pocan, Hon. Mark, a Representative in Congress from the State 
      of Wisconsin:
        Slide: Average Premiums for Employer-Based Family 
          Coverage...............................................    50


                   FIVE YEARS OF BROKEN PROMISES: HOW



                   THE PRESIDENT'S HEALTH CARE LAW IS



                     AFFECTING AMERICA'S WORKPLACES

                              ----------                              


                        Tuesday, April 14, 2015

                        House of Representatives

                            Subcommittee on

                Health, Employment, Labor, and Pensions

                Committee on Education and the Workforce

                            Washington, D.C.

                              ----------                              

    The Subcommittee met, pursuant to call, at 10:03 a.m., in 
room 2175, Rayburn House Office Building, Hon. David P. Roe 
[chairman of the subcommittee] presiding.
    Present: Representatives Roe, Wilson, Foxx, Walberg, 
Guthrie, Messer, Carter, Grothman, Allen, Polis, Courtney, 
Pocan, Hinojosa, Wilson, Bonamici, Takano.
    Also present: Representative Kline and Scott.
    Staff present: Andrew Banducci, Professional Staff Member; 
Janelle Belland, Coalitions and Members Services Coordinator; 
Ed Gilroy, Director of Workforce Policy; Christie Herman, 
Professional Staff Member; Nancy Locke, Chief Clerk; Zachary 
McHenry, Legislative Assistant; Michelle Neblett, Professional 
Staff Member; Brian Newell, Communications Director; Krisann 
Pearce, General Counsel; Lauren Reddington, Deputy Press 
Secretary; Alissa Strawcutter, Deputy Clerk; Juliane Sullivan, 
Staff Director; Alexa Turner, Legislative Assistant; Tylease 
Alli, Minority Clerk/Intern and Fellow Coordinator; Austin 
Barbera, Minority Staff Assistant; Melissa Greenberg, Minority 
Labor Policy Associate; Carolyn Hughes, Minority Senior Labor 
Policy Advisor; Brian Kennedy, Minority General Counsel; Amy 
Peake, Minority Labor Policy Advisor; Arika Trim, Minority 
Press Secretary.
    Chairman Roe. Thank you, all. A quorum being present, the 
Subcommittee on Health, Employment, Labor, and Pensions will 
come to order.
    As a practicing physician for more than 30 years, I have 
experienced firsthand the marvels of the United States health 
care system and how it has helped improve the lives of 
countless individuals. But I also saw the challenges of our 
health care system; one that was too bureaucratic, too costly, 
and leaves too many Americans without the coverage they need to 
care for themselves and their families.
    Health care reform should have been an opportunity to 
preserve and build on what works with common sense market-based 
reforms that would expand access to more affordable coverage. 
Instead, a costly government takeover of health care was 
imposed on the American people. And five years later, the law 
continues to wreak havoc on families, businesses, and even 
schools.
    It is hard to recall a time when supporters of a law 
promised so much and delivered so little. The American people 
were promised if they liked their health care plan, you could 
keep it. Not true. Millions of Americans have received letters 
notifying them that their health insurance coverage has been 
canceled because it doesn't comply with the dictates of the 
health care law. Patients have learned in horror that their 
trusted doctors are no longer in their health insurance 
networks. And it will only get worse as the narrowing of 
networks is going to continue to help hold cost down, as we 
will hear later.
    The nonpartisan Congressional Budget Office projects seven 
million people will lose their employer-sponsored coverage over 
the next 10 years. The American people were promised that 
health care costs would go down. In fact, the President 
promised to lower premiums for the average family by $2,500, 
not true.
    According to the Kaiser Family Foundation, health care 
costs for the average family increased by 26 percent during the 
last five years. The average employee with an employer-
sponsored insurance plan experienced a 7 percent increase in 
their share of health care costs.
    Finally, the American people were told that the health care 
law would boost the economy. Again, not true. More than 450 
employers have publicly stated they are cutting hours or making 
other staffing changes to avoid the law's punitive mandates, 
including the University of Colorado in Colorado Springs, 
Trig's Supermarkets, Coach's Fast Food in Wisconsin, Shari's 
Restaurants in Oregon, and Henrico County School District, as 
well as other school districts across the Commonwealth of 
Virginia and including my home state of Tennessee.
    The Congressional Budget Office estimates that the law will 
result in two million fewer full-time workers. Many of these 
difficult changes are taking place in the service industry, 
which means lower wage workers are bearing the brunt of the 
Affordable Care Act's burden. Schools are also cutting hours, 
undermining the quality of education for America's students.
    We have heard time and again from the Administration that 
these are mere antidotes or, in the words of then-Secretary 
Sebelius, ``speculation.'' Yet, even those who supported the 
health care law have no choice but to recognize its harmful 
consequences. Members of the AFL-CIO endorsed a resolution that 
warned of an ``underclass of less than 30 hour workers,'' as 
employers seek to avoid paying penalties under the health care 
law.
    The National Brotherhood of Teamsters and other union 
leaders said the law will, ``shatter not only our hard-earned 
health benefits, but destroy the foundation of the 40-hour work 
week that is the backbone of the American middle-class.''
    Finally, the International Brotherhood of Electrical 
Workers lamented that the law, ``imposes increased benefit 
costs, fees, and new taxes on our multiemployer health care 
plans.''
    Unfortunately, more pain is right around the corner. In 
just a few short years, nearly half of all large employers will 
be hit with the so-called ``Cadillac tax''. It is estimated the 
federal government will collect more than $85 billion through 
this tax over the next decade. That is money that could have 
been used to raise wages or create new jobs. Instead, it will 
go into the coffers of the federal government. And don't 
forget, that right now, the Supreme Court is deciding a case 
resulting in millions of Americans being stuck with government-
run health insurance they can't afford.
    Remarkably, when it is all said and done, after all the 
broken promises, fewer jobs, lost wages, Web site glitches, and 
canceled health care plans, 35 million individuals will still 
be without health insurance. The American people can no longer 
afford this costly mistake. And it is time to move the country 
away from this government-run health care scheme toward a more 
patient-centered health care system.
    A key part of that effort is oversight hearings like the 
one we are holding here today. Congress must shine a light on 
the President's fatally flawed law. We have a very 
distinguished panel of witnesses here today to help us do just 
that. I would note for my colleagues today that the panel 
includes three employers to share their perspectives on how the 
law is impacting their workplaces. I look forward to a robust 
discussion.
    And with that, I would like to congratulate the new ranking 
member, Jared Polis. Congressman Polis and I came in with the 
same class. He is an incredibly capable member of Congress. And 
I am really pleased to be serving with him today. And I will 
now yield for his opening remarks.
    [The statement of Chairman Roe follows:]

  Prepared Statement of Roe Hon. David P., Chairman, Subcommittee on 
                Health, Employment, Labor, and Pensions

    As a practicing physician for more than 30 years, I experienced 
first-hand the marvels of the U.S. health care system and how it has 
helped improve the lives of countless individuals. But I also saw the 
challenges of our health care system, one that is too bureaucratic, too 
costly, and leaves too many Americans without the coverage they need to 
care for themselves and their loved ones.
    Health care reform should have been an opportunity to preserve and 
build on what works with commonsense, market-based reforms that would 
expand access to more affordable coverage. Instead, a costly government 
takeover of health care was imposed on the American people, and five 
years later the law continues wreaking havoc on families, businesses, 
and even schools. It's hard to recall a time when supporters of a law 
promised so much and delivered so little.
    The American people were promised that if they liked their health 
care plan they could keep it. Not true. Millions of Americans have 
received letters notifying then that their health insurance is being 
cancelled because it doesn't comply with the dictates of the health 
care law. Patients have learned in horror that their trusted doctors 
are no longer in their health insurance networks. And it will only get 
worse. The nonpartisan Congressional Budget Office projects seven 
million people will lose their employer-sponsored coverage over the 
next 10 years.
    The American people were promised health care costs would go down. 
In fact, the president promised to lower premiums for the average 
family by $2,500. Not true. According to the Kaiser Family Foundation, 
health care costs for the average family increased by 26 percent during 
the last five years. The average employee with an employer-sponsored 
insurance plan experienced a seven percent increase in their share of 
health care costs.
    Finally, the American people were told the health care law would 
boost the economy. Again, not true. More than 450 employers have 
publicly stated they are cutting hours or making other staffing changes 
to avoid the law's punitive mandates, including the University of 
Colorado in Colorado Springs, Trig's Supermarkets and Coach's Fast Food 
in Wisconsin, Shari's restaurants in Oregon, and the Henrico County 
School District - as well as other school districts - across the 
Commonwealth of Virginia. The Congressional Budget Office estimates the 
law will result in two million fewer full-time workers.
    Many of these difficult changes are taking place in the service 
industry, which means lower-wage workers are bearing the brunt of the 
ObamaCare burden. Schools are also cutting hours, undermining the 
quality of education America's students deserve. We've heard time and 
again from the administration that these are mere anecdotes or, in the 
words of then-Secretary Sebelius, ``speculation.'' Yet even those who 
supported the health care law have no choice but to recognize its 
harmful consequences.
    Members of the AFL-CIO endorsed a resolution that warned of an 
``underclass of less than 30-hour-workers'' as employers seek to avoid 
paying penalties under the health care law. The International 
Brotherhood of Teamsters and other union leaders said the law will 
``shatter not only our hard-earned health benefits, but destroy the 
foundation of the 40 hour work week that is the backbone of the 
American middle-class.'' Finally, the International Brotherhood of 
Electrical Workers lamented that the law ``imposes increased benefit 
costs, fees, and new taxes on our [multiemployer health care] plans.''
    Unfortunately, more pain is right around the corner. In just a few 
short years, nearly half of all large employers will be hit by the so-
called ``Cadillac tax.'' It's estimated the federal government will 
collect more than $85 billion through this tax over the next decade. 
That's money that could be used to raise wages or create new jobs; 
instead it will go into the coffers of the federal government. And 
don't forget, that right now, the Supreme Court is deciding a case that 
may result in millions of Americans being stuck with government-run 
health insurance they cannot afford.
    Remarkably, when it's all said and done - after all the broken 
promises, fewer jobs, lost wages, website glitches, and cancelled 
health care plans - 35 million individuals will still be without health 
insurance. The American people can no longer afford this costly 
mistake. It is time to move the country away from this government-run 
health care scheme and toward a more patient-centered health care 
system.
    A key part of that effort is oversight hearings like the one we are 
holding today. Congress must shine a light on the president's fatally 
flawed law. We have a very distinguished panel of witnesses to help us 
do just that. I would note for my colleagues that today's panel 
includes three employers to share their perspectives on how the law is 
impacting their workplaces. I look forward to a robust discussion, and 
with that, will yield to Ranking Member Polis for his opening remarks.
                                 ______
                                 
    Mr. Polis. Thank you, Mr. Chairman.
    I want to acknowledge that I think we are all glad that 
Chairman Roe is back in his seat leading this subcommittee. I 
am very much looking forward to working with him. And on behalf 
of the Democrats on the Committee, we want to as well join our 
Republican friends in offering our condolences to you and your 
family. And I would like to ask unanimous consent for a moment 
of silence in honor of Pam Roe and to convey our thoughts and 
prayers to the Roe family at this time.
    [Moment of silence.]
    Thank you. We are truly glad to have you back. Thank you.
    As to the business at hand. After 56 attempts to repeal the 
Affordable Care Act since the law was passed, I was hoping that 
we could move forward with improving the Affordable Care Act 
and make it work better and reduce costs even more. We all have 
a lot of ideas, like improving access to preventative health 
care services, making sure workers receive fair treatment in 
the workplace. Many of us are very interested in some of the 
ways that the Affordable Care Act is paid for and how those can 
be changed or paid for to modify cost.
    But instead, we are spending our time attacking, rather 
than improving, a law that is working for millions of Americans 
who gained quality affordable health insurance, for tens of 
thousands of businesses who have saved costs on health care, 
and millions of others who have been able to enroll in Medicaid 
for the first time, particularly in states that have expanded 
Medicaid eligibility.
    The most recent estimate by the Congressional Budget Office 
found that a total of 27 million people will gain access to 
health coverage through the Affordable Care Act who otherwise 
would not have had it, to say nothing of millions of Americans 
who have coverage for preexisting conditions for the first 
time, are no longer subject to lifetime caps that could leave 
them bankrupt if they get a serious illness, or finally have 
access to comprehensive preventative services and affordable 
prescription drugs.
    According to a newly-released Gallop poll, the percentage 
of Americans lacking health insurance has dropped more than 5 
percent since the marketplace opened at the end of 2013. In my 
home state of Colorado, 16.5 percent of people lacked health 
insurance before the Affordable Care Act. And according to a 
recent Kaiser Family Foundation study, the figures dropped to 9 
percent this last June. And health care premiums are growing at 
slower rates than they have in decades, for both businesses, as 
well as individuals.
    I think it is clear the Affordable Care Act is working for 
consumers, working for businesses. Of course it is not perfect. 
But the Affordable Care Act works because of the shared 
responsibility of individuals, federal and state governments, 
and employers.
    I have started several businesses myself before I came to 
Congress. And as an employer, I knew that before the Affordable 
Care Act, health care costs were climbing at an out-of-control 
rate, double digit inflation every year. Health care choices 
were slim to none in many areas. And people were having to get 
a job in businesses like mine sometimes because they needed 
health insurance, not because they needed the income.
    The five years since the ACA has been implemented of course 
hasn't been perfect. But on a whole, cost increases are down, 
there are more choices for employees, and more ways that 
businesses can get coverage, as well as more tools to help 
businesses affords to cover their employees.
    The ACA has brought down cost and spread the responsibility 
among everyone, employers and employees. Under the ACA, small 
employers are more likely to offer insurance and they are more 
likely to want to offer insurance. Many receive a tax credit to 
pay for a portion of the coverage for their employees. And the 
exchanges allow small employers to compete to find good rates, 
which was impossible to do before because according to 
insurance companies, small companies were simply too small.
    Nationwide, 360,000 small businesses have used tax credits 
to provide coverage to their employees. And as a result, 
businesses are now able to recruit and keep quality employees 
without bankrupting the company or their workers. Instead of 
huge premium increases during the past five years, costs have 
grown at historically low rates. Instead of workers choosing 
between coming to work seriously ill and putting food on the 
table, workers will be able to receive quality health care that 
allows them to stay on the job and keep their paycheck. And 
instead of having a stressed, unhealthy workforce, businesses 
will have a happy, healthy, and productive workforce, which is 
good for the families and good for the businesses.
    Just one more example. We have an automotive company in 
Colorado owned by Craig Lear who believes it is his 
responsibility to keep his employees happy and healthy. As he 
stated, ``It is hard to find good employees, so you have to 
take care of them to retain them. And health insurance is part 
of that.'' ACA helped him cut his health care costs in half and 
his business is thriving, thanks to the Affordable Care Act and 
the exchanges that have been put up. As he said, this is a huge 
step in the right direction. It makes sense, and in 10 years we 
will look back and see that.
    I hope, Mr. Chair, we are able to look back even sooner 
than 10 years. We are halfway to that mark. And I look forward 
to hearing the testimony from our witnesses today. And I yield 
back the balance of my time.
    [The statement of Mr. Polis follows:]

   Prepared Statement of Polis, Hon. Jared, Subcommittee on Health, 
                    Employment, Labor, and Pensions

    Thank you. I first want to acknowledge that I am glad Chairman Roe 
is back in his seat leading this subcommittee, and I look forward to 
working with him. I want to offer my sincere condolences to him and his 
family. I know this must be an extremely difficult time. All of our 
thoughts and prayers are with you in this trying time.
    And for the business at hand. Today, once again, we are wasting our 
precious time on this subcommittee rehashing tired debates about the 
Affordable Care Act.
    After no fewer than 56 unsuccessful attempts to repeal the ACA 
since the law was passed five years ago, I would hope that we on the 
HELP subcommittee could move onto more pressing matters--like improving 
access to preventative health services and making sure all workers have 
fair wages and receive fair treatment in the workplace.
    Sadly, we're instead once again spending our time attacking--not 
improving, attacking--a law that is working for millions of Americans 
who have gained quality, affordable health insurance through the 
marketplace for the first time, as well as millions of others who have 
been able to enroll in Medicaid for the first time.
    The most recent estimate by the Congressional Budget Office found 
that a total of 27 million people will gain access to health coverage 
through the ACA who otherwise would not have had it, to say nothing of 
the millions of Americans who:
    * Have coverage for pre-existing conditions for the first time;
    * Are no longer subjected to lifetime caps that can leave them 
bankrupt if they get a serious illness;
    * Finally have access to comprehensive preventative services and 
affordable prescription drugs for the first time;
    * And have been able to afford health insurance in young adulthood 
by staying on their parents' plans.
    According to a newly released Gallup poll, the percentage of 
Americans lacking health insurance has dropped more than 5 percent 
since the marketplace opened at the end of 2013.
    In my home state of Colorado, 16.5 percent of folks lacked health 
insurance before the ACA took; according to June Kaiser Family 
Foundation study, that figure had dropped to nine percent by last June 
--all while health care premiums are growing at slower rates than they 
have in decades.
    The Affordable Care Act is working--for consumers and for 
businesses. It may not be perfect, but the ACA works because of the 
shared responsibility of individuals, federal and state governments, 
and employers.
    I have started several businesses myself. And as an employer I know 
that before ACA, health care costs were climbing at an out-of-control 
rate for employers and employees. Health care choices were slim to none 
in many areas and states, and people were having to get a job in 
businesses like mine sometimes because they needed the health 
insurance, not because they needed the income.
    The five years since ACA have been implemented has not always been 
perfect, but costs are down and choices are up for employees and 
bUsinesses.
    1.n reality, most companies are not impacted by the employer 
mandate. 96 percent of employers are small businesses and have fewer 
than 50 workers and are thus exempt, and the overwhelming majority of 
the remaining 4 percent already offer quality coverage. And the vast 
majority of good business owners provide health insurance to their 
employees, and this is causing little to no change for them.
    In fact, ACA has brought costs down and spread the responsibility 
among everyone--both employers and employees. Under ACA small employers 
are more likely to offer insurance, and they are more likely to want 
to. Many can receive a tax credit to pay for a portion of coverage for 
their employees, and the exchanges allow small employers to compete to 
find good rates, which was impossible to do before because according to 
insurance companies they were too small.
    Nationwide, more than 360,000 small businesses have used tax 
credits to provide coverage to their employees. As a result, businesses 
are now able to recruit and keep quality employees without bankrupting 
the company and the workers.
    Now, instead of huge premium increases, during the past five years 
costs have grown at historically low rats.
    Now, instead of workers choosing between coming to work seriously 
ill and putting food on the table, workers will be able to receive 
quality health care that allows them to stay on the job and keep their 
paycheck.
    Now, instead of having a stressed, unhealthy workforce, businesses 
will have a happy, healthy and productive workforce, which is good for 
families and good for their businesses' bottom line.
    As just one example, we have an automotive company in Colorado 
owned by Craig Lear who believes it's his responsibility to keep his 
employees happy and healthy. As he stated, ``It's hard to find good 
employees, so you have to take care of them to retain them, and health 
insurance is part of that.''
    As a small business owner he believes that before ACA health care 
costs were a huge burden to his company, threatening to put him out of 
business. ACA helped him cut his healthcare costs in half. He feels
    that because of ACA and the exchanges that have been set up, small 
business owners now have a voice and someone's watching out for them, 
in comparison to the previously unaffordable small business health 
insurance of the past. Quote: ``This is a huge step in the right 
direction. It makes sense and in 10 years we'll look back and see 
that.''
    Even with all of improvements this law has created in the lives of 
individuals and business owners, we continue to rehash the same 
arguments over and over again. The Majority on this committee is 
whiling away our time here talking about ``repeal''--which is bad 
policy and is simply not going to happen.
    I would request that instead of spending time working to repeal a 
bill that is overwhelmingly doing good for Americans and the economy we 
talk about changes we can make to the Affordable Care Act to ensure 
that it functions as intended over the long-term. Or even better, we 
should be spending time marking up bills and talking about issues that 
I hope everyone agrees should be a top priority.
    We should be working to fix our multi-employer pension system, 
expanding opportunities for all workers, creating a fair and equitable 
wage for women and men, creating good paying jobs for all, protect 
worker's rights, and expanding our economy. The list goes on and on. We 
have had 56 votes in the full house to repeal ACA and countless 
hearings in committees. Instead of rehashing the same stubborn ``the 
sky is falling'' argument let's work together to expand our economy and 
create jobs for the middle-class.
    I look forward to hearing from our witnesses, especially those who 
are actually running a business and not lawyers or lobbyists.
    As a businessman and a father I know that ACA is working to protect 
our companies, our employees and our families. And this ``sky is 
falling'' talk that we hear over and over is just not coming to 
fruition.
    I am interested to hear how everyone thinks we can move beyond this 
rhetoric and begin to work together to perfect a good start that is 
helping our businesses, creating good paying jobs, and saving lives.
    I yield back the remainder of my time.
                                 ______
                                 
    Chairman Roe. Thank you, Mr. Polis. And thank you for your 
kind words, also. I appreciate it very much.
    And pursuant to committee rule 7(c), all committee members 
will be permitted to submit written statements to be included 
in the permanent hearing record. And without objection, the 
hearing record will remain open for 14 days to allow 
statements, questions for the record, and other extraneous 
material referenced during the hearings to be submitted in the 
official hearing record.
    It is now my pleasure to introduce our distinguished panel 
of witnesses. First, Dr. Tevi Troy is president of the American 
Health Policy Institute here in Washington, D.C. Welcome. 
Previously, Dr. Troy held numerous positions in the federal 
government, including serving as deputy secretary of Health and 
Human Services beginning in 2007, where he oversaw all 
operations, including Medicare, Medicaid, Public Health, 
medical research, food and drug safety, welfare, child and 
family services, disease prevention, and mental health. Woo, 
that was a mouthful.
    Mr. Rutland ``Skip'' Paal, Jr. is the owner of Rutland 
Beard Floral Group, Inc. in Baltimore, Maryland. Mr. Paal is a 
fourth generation business owner of Rutland Beard Floral Group, 
Inc. Since taking over the business from his parents, Mr. Paal 
expanded the business over the last 10 years from a single 
retail shop to a multistate business with import, wholesale, 
and retail operations. Thank you for being here today.
    Mr. Michael Brey is the founder and president of Brey 
Corporation in Laurel, Maryland. Mr. Brey started Brey 
Corporation in 1992 and acquired retailer Hobby Works in 1993. 
In addition, Mr. Brey has served on several corporate boards, 
including the board finance committee of Dimensions Healthcare, 
a health care provider. Welcome, Mr. Brey.
    Now I will take this opportunity to yield to Representative 
Rick Allen to introduce our final witness.
    Mr. Allen. Thank you, Mr. Chairman. I am pleased to 
introduce Ms. Sally Roberts from Augusta, Georgia, who is the 
human resources director of Morris Communications Company, LLC. 
Morris Communications is a privately-held media company with 
diversified holdings that include newspaper and magazine 
publishing, outdoor advertising, radio broadcasting, book 
publishing, and distribution and online services.
    She is here today to testify on behalf of the Society for 
Human Resource Management. Ms. Roberts is in charge of the 
company's magazine and radio division, where she manages the 
benefits for Morris' 3,000 employees in more than 20 states. 
Ms. Roberts works with insurance providers and consultants on 
medical and dental plans to design employer rates and employer 
premiums and coordinates open enrollment with brochure design, 
online support, employee meetings, and enrollment processes.
    She also formed a wellness committee and developed a 
monthly online news letter, ``Wellness Information and News.'' 
And I just happen to have the front page of Monday's newspaper. 
And it shows the Lone Star hero, the new champion of the 
Master's Golf Tournament, Mr. Spieth, from the Great State of 
Texas.
    So Ms. Roberts, welcome. And thank you for being with us 
today.
    Chairman Roe. Thank you all. Now I ask the witnesses to 
stand and raise your right hand. Thank you.
    [Witnesses sworn.]
    Let the record reflect witnesses answered in the 
affirmative. You may be seated.
    Before I recognize you all for your testimony, let me 
briefly explain our lighting system. You will each have five 
minutes to present your testimony. When you begin, the light in 
front of you will turn green. When one minute is left it will 
turn yellow. And when your time is expired the light will turn 
red. If you are in the middle of a sentence, I am not going to 
gavel you. You can go ahead and finish your thoughts. So we are 
not going to do that. But I will adhere to the five-minute 
rule.
    At that point, I will ask you to wrap up your remarks as 
best able. After everyone has testified, each member will have 
five minutes to ask questions of the panel.
    Now, Dr. Troy, begin your testimony.

STATEMENT OF HON. TEVI TROY, PH.D., PRESIDENT, AMERICAN HEALTH 
                POLICY INSTITUTE, WASHINGTON, DC

    Dr. Troy. Mr. Chairman, Mr. Ranking Member, members of the 
Subcommittee, I am Tevi Troy, president of the American Health 
Policy Institute, former deputy secretary of HHS, and a former 
senior White House aide.
    American Health Policy Institute is a think-tank dedicated 
to studying the issue of employer-sponsored health insurance, 
and highlighting the challenges employers face in offering care 
to their employees and their dependents. The institute 
publishes studies on employer-sponsored health insurance and 
examines employer responses to health care challenges.
    These roles give the institute a unique perspective on 
development and employer-sponsored insurance and the future 
state of health care. Today I would like to talk about the 
impact of the ACA's high-cost excise tax, the cost of the ACA 
to employers, and the affordability of health care to 
employees. These three factors signal big changes ahead in 
employer-sponsored care, which is currently how 169 million 
Americans get their health coverage.
    Under the ACA, an excise tax on high-cost health plans, the 
so-called Cadillac tax, takes effect in 2018. The potential 
impact of this tax is already driving employers, including 
corporations, state government, local government, and 
universities, to reassess their health care plans and 
reconsider their future role in providing health care benefits.
    The tax is causing employers to reduce health care benefits 
to limit their exposure to the tax. In the future though, 
continued medical inflation and other factors will make it very 
difficult for employers to avoid the tax. Big increases in 
health care costs will eventually cause Chevrolet benefit plans 
to be taxed as Cadillacs. That in turn will result in the 
burden of the excise tax falling on a significant number of 
American employees and their families.
    Last November, the institute published a study on the 
impacts of this excise tax, which found that from 2018 to 2024, 
the excise tax could cost 12.1 million employees an average of 
$1,050 in higher payroll and income taxes per year if employers 
increase their taxable wages as they reduce the cost of health 
care benefits.
    Alternatively, these employees could see up to a $6,150 
reduction in their health care benefits and little or no 
increase in their wages. Large employers subject to the excise 
tax in 2018 will pay an average of $1 million that year and an 
average of $2.1 million per year from 2018 to 2024, or over 
$2,700 per employee.
    In 2018, the excise tax is anticipated to hit 17 percent of 
all American businesses and 38 percent of large employers. By 
2031, the cost of the average family health care plan is 
expected to hit the excise tax threshold. Many state and local 
government health plans will also be impacted by the high-cost 
excise tax because they tend to offer more expensive health 
plans than private sector employers. In addition, unionized 
employers already need to address potential excise tax costs in 
upcoming contract negotiations.
    Overall, the threat of the excise tax is driving employers 
to fundamentally reassess their plans in a way that will have a 
real impact on employees and their families. Last year, an 
institute study looked at direct cost to companies from the 
ACA's requirements, over and above projected employer health 
care cost trends within the ACA. The study found that over the 
next decade, the cost of the ACA to large employers is 
estimated between $4,800 and $5,900 per employee.
    These large employers will see overall ACA-related cost 
hikes of between $163 million and $200 million per large 
employer. And the total cost of the ACA to all large U.S. 
employers over the next 10 years is estimated to be from $151 
million to $186 billion. These cost hikes, combined with a fear 
of triggering the excise tax, are leading to employer reactions 
that will have a significant impact on the recipients of 
employer-based care.
    Under the ACA, large employers must offer affordable plans 
and coverage to full-time employees. Coverage is deemed not 
affordable if the employee's share of their annual premium for 
self-coverage--for self-only coverage is greater than 9.5 
percent of their annual household health care. However, the 
average employee premium for family coverage accounted for more 
than 9.5 percent of family income for 4.7 million employees. 
Further, 10.4 million employees with families, or 38.1 percent, 
faced an average family premium and deductible that could 
consume 9.5 percent of their family income. By 2025, that 38 
percent becomes 53 percent.
    So the combination of a creeping excise tax and high 
marginal ACA costs is driving employers to look at significant 
changes to their health care offerings. Some employers will 
exit the system. But we believe that more will look to make 
serious changes in approach. These employer-based changes will 
likely include more cost-sharing components as employers seek 
to avoid triggering the excise tax in 2018. The cost-sharing 
then impacts the affordability of health care for employees, 
who will then become unsatisfied with their employer-sponsored 
care and look to Washington for answers.
    Mr. Chairman, Mr. Ranking Member, members of the 
Subcommittee, I thank you for your time here today. And I look 
forward to any questions that you may have.
    [The statement of Dr. Troy follows:]
    
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    Chairman Roe. Thank you, Dr. Troy.
    Mr. Paal, you are recognized for five minutes.

 STATEMENT OF MR. RUTLAND PAAL, JR., PRESIDENT, RUTLAND BEARD 
            FLORAL GROUP, SCOTCH PLAINS, NEW JERSEY

    Mr. Paal. Mr. Chairman and distinguished members, thank you 
for inviting me to present testimony before the Committee 
regarding my company's experience with the Affordable Care Act.
    My name is Skip Paal. And I am a fourth generation florist. 
My great grandfather opened a flower shop and greenhouses 
outside Baltimore in 1923. Today, my company employs over 150 
people and operates at 11 different locations in Maryland and 
New Jersey, including my great grandfather's original location.
    We are a family business. Our employees are extensions of 
our family. And we have always felt an obligation to take care 
of our employees accordingly. We have been providing health 
care to our full-time employees for decades. When cash flow was 
tight, and I and other family members skipped paychecks, we 
still contributed to our employee's health care plans. Not 
because we had to, but because it is the right thing to do.
    We also offer a simple IRA plan so that our employees have 
the opportunity to retire with something after their years of 
service. We established this retirement plan not because we had 
to, but because it is the right thing to do.
    We try to help our employees in any way we can. Last month, 
I gave a plane ticket to an employee to spend some time with 
her daughter because she will be missing her daughter's 
graduation from college to work for us during the Mother's Day 
holiday, one of our peak times of the year. I didn't do that 
because I had to. In fact, the employee didn't ask for it. I 
did it because it is the right thing to do.
    My companies employed a total of 152 individuals over our 
most recent measurement period. Of this total, 28 would be 
considered full-time under the ACA, 85 part-time, and 39 
temporary.
    In order to comply with the ACA, it took me over 40 hours 
to collect all the data on our employees' hours of service, 
create spreadsheets, perform calculations, select appropriate 
plans, and make offers of coverage. In the past, this process 
took me about an hour of meeting with our health insurance 
broker. Since my company is not large enough to have an HR 
manager, that responsibility falls to me.
    As an employer, I would improve the bottom line if I did 
not offer coverage to my employees. Even though I am considered 
a large employer under the ACA, with 51 FTEs. If I stopped 
offering health care coverage for my employees my penalty would 
be zero, since I have only 28 actual full-time employees. This 
would result in a savings to the company of over $60,000 a 
year. We continue to offer the coverage because it is the right 
thing to do.
    The ACA has provided numerous challenges to me and my 
company; the confusion about what is needed for compliance 
today, what will be needed for compliance in the years ahead, 
and how to correctly report our data is frustrating, to say the 
least. I remain cautious about continuing to expand my business 
because I just don't know what the future impacts of the ACA 
will be.
    The ACA has also placed me at a competitive disadvantage 
against other florists and Main Street retailers. Since my 
employees are offered employee-sponsored coverage, they are 
ineligible for a subsidy from the exchange and feel forced into 
accepting the coverage offered by my company's group plan.
    Because of the ACA, one of my employees has almost $2,300 
less in annual expendable income as a result of being employed 
by me versus another flower shop down the street that does not 
require health insurance coverage. This isn't rational, as it 
penalizes the employee working for me and prevents my company 
from attaining good employees, while continuing to be 
sustainable.
    It is my hope that Congress will work diligently to craft 
and pass legislation to address the unnecessary burdens and 
complexities the ACA has created. One example is the STARS Act, 
which would provide a technical change to the ACA because the 
law has conflicting definitions and applications of what a 
``seasonal worker'' is. That one provision is causing confusion 
and a massive burden to small business throughout the country.
    Thank you again for giving me the opportunity to present 
this testimony before the Committee.
    [The statement of Mr. Paal follows:]
    
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    Chairman Roe. Thank you, Mr. Paal.
    Mr. Brey, you are recognized for five minutes.

STATEMENT OF MR. MICHAEL BREY, PRESIDENT, BREY CORPORATION T/A 
 HOBBY WORKS(R), WINGTOTE MANUFACTURING, LLC, LAUREL, MARYLAND

    Mr. Brey. Good morning, Mr. Chairman, members of the 
Subcommittee. Thanks for having me. I am sorry for your loss, 
sir.
    My name is Mike Brey. I am the owner of Hobby Works, a 
hobby and toy store with four locations in the D.C. metro area, 
Maryland, and Virginia, with nearly 50 (more than 30 FTE) 
employees. Thanks for allowing me to share my comments with you 
on the health care law's impact on my business.
    I started my business in 1992. Almost from the beginning, I 
offered health coverage. Not just to attract and retain good 
employees, but because as a former retail employee myself, I 
had found it difficult to get good, affordable insurance. My 
business has been successful, and we have been able to expand 
multiple locations. But over the years, it became more and more 
and more difficult to continue offering health insurance to my 
employees.
    Prior to the passage of the health care law, our insurance 
rates were going through the roof. We saw annual premium 
increases, 10, 15, 20 percent. Sometimes even higher if we 
crossed an age band. As a result, we were forced to ask 
employees to pay more of their premiums and face higher 
deductibles in order to continue offering coverage.
    Other small businesses also faced these issues before there 
was an Affordable Care Act. The research shows that many small 
business owners struggled to offer health insurance to their 
employees due to rising costs. Small Business Majority's 
scientific opinion polling found that the majority of small 
business owners provided insurance to at least some of their 
employees. But of those who didn't, 70 percent, said it was 
because they couldn't afford it. What is more, small businesses 
paid 18 percent more on average for health coverage than large 
companies and received fewer comprehensive benefits.
    Inaction was unacceptable. The passage of the Affordable 
Care Act was the first thing in years that gave me hope that 
the spiral of escalating cost and depreciating quality of 
coverage might finally end. Many provisions of the health care 
law have been key to making health insurance more accessible 
and affordable for small businesses like mine. In addition to 
the marketplaces, a multitude of cost containment provisions 
have gone into effect that are helping to lower costs and 
provide more stability throughout the system.
    A survey conducted by Towers Watson and the National 
Business Group on Health found that in 2013, employers 
experienced the lowest increase in health care cost in 15 
years. While some argue that the health care law is requiring 
many small firms to drop their health coverage, the Kaiser 
Family Foundation found in 2014 that the number of employers 
offering coverage remains statistically unchanged from the 
previous year. Additionally, 8.2 million more people, many of 
whom were previously uninsured, have gained employer-sponsored 
coverage.
    Thanks to the health care law's cost containment 
provisions, our premiums are starting to stabilize. And I 
believe I am finally starting to have the certainty and 
stability I need when it comes to health insurance premiums and 
choices of plans.
    What's more, in Maryland, we now have many more options 
when it comes to insurance carriers and health plans. Where we 
once had only a few carriers to choose from, we can now choose 
from a variety of insurers that offer many health plans. I went 
on the shop exchange and counted. It has more than 110 options 
for my business to choose from now.
    Furthermore, thanks to the new options created by the 
health marketplaces, more people are able to leave jobs to 
become self-employed or start a business because they don't 
have to worry anymore about health insurance. This means that 
spouses don't have to stay in particular jobs in order to 
maintain health benefits for their dependents.
    Some claim that the health care law is a job killer and 
that small businesses are being forced to make their full-time 
employees cut their hours. This has not impacted my business. 
We don't make expansion decisions based on tax laws. We do it 
based on consumer confidence and how we expect sales to 
increase over time. As a retailer, we are still recovering from 
the effects of the recession. Nobody actually needs anything I 
sell. But we have never thought of expanding or shrinking based 
on the health care law's requirements.
    Some say that the health care law is forcing small 
businesses to order more outside help in order to comply with 
the law's requirements. As a small business owner, I can tell 
you that the vast majority of owners already rely on the 
expertise of accountants and lawyers and insurance brokers. 
Small Business Majority's research shows that 75 percent of 
small business owners already work with an insurance broker to 
purchase insurance policies for their business.
    The Affordable Care Act is not perfect, and it won't solve 
all of our health insurance problems. However, it is the first 
meaningful law in decades that meets many of small businesses' 
core needs in regards to rising health care costs. In this 
economy, policies that allow us to spend less on premiums so we 
can keep more of our profits to reinvest in our companies and 
create jobs is what we need most.
    Strengthening and tweaking the Affordable Care Act instead 
of chipping away at it is the only path forward to lowering the 
overall cost of health care and providing more options to 
coverage for small business owners like myself and their 
families and their employees.
    Thank you for the opportunity to comment. I really 
appreciate it.
    [The statement of Mr. Brey follows:]
    
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    Chairman Roe. Thank you, Mr. Brey.
    Ms. Roberts, you are recognized for five minutes.

   STATEMENT OF MS. SALLY ROBERTS, HUMAN RESOURCES DIRECTOR, 
      MORRIS COMMUNICATIONS COMPANY, LLC, AUGUSTA, GEORGIA

    Ms. Roberts. Chairman Roe, Ranking Member Polis, 
distinguished members of the Subcommittee, my name is Sally 
Roberts, and I am the director of human resources for Morris 
Communications. I am here today on behalf of the Society of HR 
Management. I have been a member of SHRM for 18 years. Thank 
you for the opportunity to testify today on how employers are 
implementing the ACA.
    Five years after the implementation of the Affordable Care 
Act, it continues to be a challenge for HR professionals and 
employers due to the complexity, the delay in effective dates 
of certain provisions, and the coverage requirements.
    Mr. Chairman, although the ACA purports to lower health 
costs, costs continue to rise for both employers and employees. 
And for that reason, many organizations are changing health 
care benefits to minimize the costs.
    By way of introduction, Morris Communications is a private, 
family-owned business based in Georgia since the 1800s. Our 
core business is newspaper publication, but we have expanded to 
magazines, visitor publications, radio broadcasting, and 
farming. We have over 2,200 employees in 29 states from Alaska, 
California, Texas, Tennessee, and Georgia, just to name a few.
    Morris has long offered benefits to our employees because 
we believe it is vital to provide a competitive compensation 
package. Throughout implementation, Morris has made changes to 
our plans and benefits, but we have been able to continue our 
one provider PPO plan to all of our employees.
    However, this year, we introduced an ACA-compliant high 
deductible plan. Let me briefly outline some of the challenges 
we have encountered with the implementation. First, the 
anticipated excise tax. At Morris, we project that our current 
health plan will trigger an excise tax of over $650,000 in 
2018. To mitigate this cost, we are considering a full 
replacement of our PPO with a high-deductible plan. However, we 
have considered this option for over ten years, and we have 
failed to implement it because of the economic hardship we 
believe it would have for our aging workforce. That is why SHRM 
supports H.R. 879 to repeal the excise tax.
    Some employers are implementing incentive-based wellness 
programs as cost-containment strategies. However, recent 
litigation proposed by the EEOC has threatened the certainty of 
the law for employers that offer these programs. SHRM applauds 
the introduction of H.R. 1189 under the leadership of Chairmen 
Kline, Roe and Walberg to protect employer-based wellness 
programs.
    Another challenge facing my company as well as others is 
the employer reporting requirements. At Morris, after looking 
at the effort it will take to track, record, and report hours 
of eligibility, we will either have to hire someone to do this 
for us or outsource at an estimated cost of $50,000.
    Other challenges include obtaining exchange notifications. 
Exchanges are supposed to notify organizations of employees who 
have applied and who are eligible for subsidies and credits. So 
far, only a few state exchanges have sent notifications to 
employers, and the federal exchange has yet to do so.
    Lastly, SHRM has strong concerns regarding the ACA's 
definition of ``full time.'' The definition is inconsistent 
with the Fair Labor Standards Act and conflicts with many 
federal and state laws. SHRM supports H.R. 30, a House-passed 
bipartisan proposal to amend this definition.
    Mr. Chairman, prior to the ACA, benefits administration 
occupied about one-third of my time. Since the ACA, I have 
spent closer to two-thirds of my time on benefits 
administration. In addition to staff time, Morris has incurred 
health care consultant and attorney fees; funds that we could 
have spent on employees in such ways as giving increases or 
contributing to their 401(k)s.
    Mr. Chairman, thank you for allowing me to share my 
experience in implementing the ACA and SHRM's views. SHRM 
believes that effective health care reform should expand access 
to affordable care, but organizations should not have to change 
business practices and benefits to afford the required changes.
    Unfortunately, the ACA's requirements are increasing costs, 
and it has restricted employer flexibility to offer benefits 
packages that best meets our employees' needs. Thank you.
    [The statement of Ms. Roberts follows:]
    
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    Chairman Roe. Thank you. And I want to thank this entire 
panel. The members here should take notice that every one of 
you finished under your time. So that is amazing. Thank you. I 
don't think that has ever happened since I have been here. So 
we will try to be as good as you are.
    Mr. Wilson, you are recognized for five minutes.
    Mr. Wilson of South Carolina. Thank you very much, Dr. Roe. 
Thank you, each of you, for being here. But in particular, I am 
very pleased to see Ms. Roberts here. Morris Communications, 
their headquarters is in Augusta, Georgia. And with Congressman 
Rick Allen, I have the privilege of representing the sister 
communities of North Augusta, Akin, Barnwell. And, of course, 
the eyes of the world, Doctor, were on Augusta this weekend at 
the Master's Golf Tournament. What a tribute to the community. 
Jordan Spieth, we are looking forward to him being at the 
Hilton Head Heritage Golf Classic this weekend. And so, hey, 
people get to see the southeast. And everybody wants to move 
into Rick Allen's district. So this is good.
    But hey, thank you for being here. And indeed, Morris 
Communications also owns a weekly paper in the district I 
represent, the People's Sentinel. And it really is a very 
promoting newspaper of the Barnwell community. So thank you 
very much. Additionally, I am grateful--I have to point out 
that as a graduate of Erskine College, Due West South Carolina, 
we appreciate your success.
    With that in mind, I want to thank you for being here. And 
if you could explain how Morris Communications and other 
similar companies are planning for the Cadillac tax, a 40 
percent excise tax. How will these changes affect your 
employees in the coming years as the tax becomes effective?
    Ms. Roberts. Thank you. That is something that we have 
given much thought to. We haven't come up with an exact 
solution yet. One thing that we are considering is converting 
to a high-deductible plan for all employees. This would be a $2 
million cost shift from the employer to the employees, 
unfortunately. And as I have mentioned in my written statement, 
we have hesitated to do so because of the negative impact. We 
know our employees are aging. We know they utilize their 
benefits. And this would mean that they would have to meet the 
upfront costs first, as high as $1,500 in a deductible, before 
the insurance would kick in.
    However, we believe that would allow us to--
    Can you hear me? Okay.
    Mr. Wilson of South Carolina. It was working. Yes.
    Ms. Roberts. However, we believe that is the hard decision 
that we have to make; transfer more costs to the employees in 
order to mitigate the cost of the excise tax or continue and 
stay on our course and incur the tax.
    Mr. Wilson of South Carolina. And thank you for being 
employee-sensitive. And indeed, I have seen personally the 
gruesome consequence of Obamacare, where I have had bag boys at 
the grocery store tell me they have lost hours. I have had our 
wonderful young ladies behind the counter at the hardware store 
tell me how they now have to have two jobs because they have 
lost hours. And so it is really sad.
    But actually, I want to thank Dr. Troy. You had an Op-ed 
which reminded the American people that it was Professor 
Jonathan Gruber, an architect of Obamacare, at the University 
of Pennsylvania--said this quote should always been remembered 
by the American people--``lack of transparency is a huge 
political advantage. And basically, you know, call it the 
stupidity of the American voter or whatever. But basically, 
what is really, really critical to getting the thing to pass.'' 
And so through this stupidity, it has really affected real 
people. And that is why I am so grateful for Dr. Roe's 
leadership to repeal this.
    But Dr. Troy, how is it that with the taxes not even being 
calculated yet, how can businesses try to comply?
    Dr. Troy. So the excise tax is going to tick in 2018, as we 
said. And the issue is that employers are looking at what 
happens in 2018. They don't look six months ahead. They look 
two, three years ahead. Especially if you have a union plan 
where you have a negotiated deal on health care. But even in 
nonunion plans, they are starting to look a few years ahead.
    And I have spoken to one employer who told me that--it is a 
very well-known employer. And they said that they see the 
amount of cost-sharing that they are going to have to do in 
order to get under the excise tax threshold is so significant 
that they are starting to make the cost-sharing steps now so 
that it is a transition period so it is a little bit each year 
between now and 2018.
    And if I could make one request of the committee. To the 
extent that you are going to do something about the excise tax, 
I would urge you to do it in advance and not wait until the end 
of 2017 because employers are making decisions in advance, as 
well.
    Mr. Wilson of South Carolina. Well, thank you for that 
advice. And with the leadership of Dr. Phil Roe, we will be 
working hard on this. And Chairman John Kline.
    And in my brief end, we received word today that what small 
businesses have to deal with are now 1,077 pages of 
regulations, 1,377 pages of Treasury decisions, 669 pages of 
notices, 100 pages of revenue projections, and 12 pages of 
revenue rulings. How small businesses could probably put up 
with that is just inconceivable.
    Thank you. I yield.
    Chairman Roe. Thank the gentleman for yielding.
    Mr. Polis, you are recognized for five minutes.
    Mr. Polis. Well, you know, a lot of what I am hearing from 
the testimony is that you have some suggestions for improving 
the Affordable Care Act. I mean, Dr. Troy and Ms. Roberts both 
talked about the excise tax. Well, Mr. Courtney is leading the 
way with a--with regard to a bill that would repeal the excise 
tax.
    And I think if the discussion is how do you modify the way 
that the Affordable Care Act is paid for--and Democrats are 
happy to have that discussion. They are happy to have that 
discussion. Not everybody agreed with the excise tax in the 
first place. There are other elements in the bill, like a 
medical device tax, that many Democrats don't agree with.
    But as long as these are presented in light of repealing 
the Affordable Care Act and taking the necessary revenues out 
of the subsidies and out of the tax support for businesses, you 
are not really gonna have a real bipartisan discussion. So if--
if the problems you have identified, if we are serious about 
solving them, I think we can get a real bipartisan discussion 
going.
    I wanted to briefly say that for Mr. Paal's testimony, I 
was a little bit confused. Because it seems like the Affordable 
Care Act doesn't really impact his business. It seems like--he 
said he has 28 actual full-time employees, so he is not subject 
to the mandate. So can't you, Mr. Paal, just keep doing 
whatever it was you were doing before the Affordable Care Act 
with regard to your employees?
    Mr. Paal. It is a great question. Where it really affects 
us is a number of our employees work three days a week or so. 
So normal week for them is 25, 28 hours. That is what they want 
to work, that is what we want them to work. They are in a part 
time capacity. Because we have some periods of our year--of 
course, the traditional retail season in the early winter. We 
also have a great season at Valentine's Day for the ones that 
you love. And everybody has got a mom they have to send some 
flowers to on Mother's Day.
    We have a lot of peak hours during those times. So our 
employees that end up working 25 or 28 hours on a normal week 
end up working 40 to 45 to 50 hours during those peak weeks. A 
multitude of our employees are now eligible for health care 
because their average number of hours is maybe 30 or 31 or 32; 
46 weeks of the year they are operating lower. So that is a 
concern for us.
    Mr. Polis. So, you know, and again, people need to get 
their health care somewhere. So either they are getting it from 
their employer, they are buying it themselves, maybe they have 
a spouse. If they are low enough income, it is Medicaid.
    So without health care, essentially the cost of individuals 
that are uninsured are foisted onto the rest of us. And others 
are forced to absorb them. I think one of the biggest reasons 
that the Affordable Care Act led to such a large reduction in 
the rate of increase of health care cost is because it reduced 
the number of uninsured and, therefore, reduced those costs 
that got transferred onto the rest of us.
    I too was a florist before I came to Congress. My company, 
when we sold it, had about 250 employees. And we did offer 
benefits to all of our full-time employees, which was the vast 
majority of them had full benefits, as well. But it seems to me 
that effects on a company that had 28 actual full-time 
employees would leave you with more alternatives in terms of 
how you cover them without having any detrimental effect on the 
bottom line.
    I would like to go to Mr. Brey. You mentioned that you 
think competition is a good thing and that the Affordable Care 
Act has given small businesses like yours the ability the shop 
among many convenient insurance carriers. In fact, you said 
your company used to only have a couple choices, and now you 
and your employees have 110 options. Doesn't that sound like 
this competition can benefit both you and your employees, and 
that is one of the factors in reducing costs?
    Mr. Brey. Oh, absolutely. I mean, there were years when we 
had only two traditional insurers plus Kaiser. So the idea that 
the marketplace is--you know, that the marketplace is--it has 
allowed us to--and my employees to have access to so many 
different plans and so many different new insurance companies 
is, frankly, a little bit astonishing to me. It was more than I 
hoped for when people first started talking about this.
    Mr. Polis. As a former businessman, I agree with your 
assertion that a boss should do whatever they can to ensure 
that employees have health care. Can you talk briefly about the 
advantages of offering employees health care? Besides the moral 
obligation, why is it good for your bottom line to offer health 
care?
    Mr. Brey. Well, I am in retail. If people are healthy, they 
are coming into contact with a lot of people. If people are 
healthier, then they are not calling in sick. Put quite simply.
    Mr. Polis. In addition, I know it helps retain your quality 
employees and--
    Mr. Brey.--sure. And so many retailers don't offer good 
plans. I have been very proud for a long, long time to be able 
to tell my employees listen, the insurance we are offering is 
not some, you know, cut-rate plan. It is the very same 
insurance that the president of the company and his family are 
on.
    Mr. Polis. And the lower the turnover rate of employees, 
the lower your training costs are, the more that you can invest 
in educating and professionally developing employees, as well.
    Happy to yield back the balance of my time.
    Chairman Roe. Thank the gentleman for yielding.
    Dr. Foxx, you are recognized for five minutes.
    Ms. Foxx. Thank you, Mr. Chairman. I thank our witnesses 
for being here today.
    Ms. Roberts, we have talked about how the law imposes 
reporting requirements on employers regarding the coverage they 
offer and to whom. It is my understanding that many of the 
requirements relate to information that employers may not have 
recorded and maintained previously, at least not in 
administering health care benefits.
    I would like to ask you to describe for the committee what 
your experiences have been in complying with the health care 
law's reporting requirements. If you could, talk about the 
types of investments in human resources and information 
technology that you have had to make to comply with the 
requirements. Can you tell us about the considerable time and 
money spent on complying with the ACA reporting rules? And will 
they have produced any beneficial effect on any of your 
employees?
    Ms. Roberts. Yes. Knowing that the reporting requirements 
were going to begin for the 2015 plan year, we started 
researching the requirements of reporting last year at least. 
The IRS did come out with their draft forms in July. And we 
have anxiously been waiting for the guidelines ever since. They 
were released in February. So since that time, we have been 
looking into the exact reporting requirements.
    Much of the information we have in our systems, our current 
systems. However, it is a matter of integrating those systems--
time systems, payroll systems--and generating information in 
the format that the IRS is requiring. Some of the information 
that is required we don't have on our premises, believe it or 
not. It is with our third-party administrator, such as the 
former employees who are on COBRA. We must supply information, 
employee names, and Social Security numbers, et cetera.
    But also, codes that we have not factored in before. For 
example, why they are not on our benefits. So this is going to 
take some time in reprogramming our systems, setting up codes. 
And it does take time for evaluating; pulling the information 
and evaluating the hours worked and making sure we are 
recognizing those benefits-eligible employees properly.
    Ms. Foxx. Thank you. As someone who in my life in education 
had to spend a lot of time on evaluation, I am really very 
familiar about what a problem it is after you have begun a 
program to try to go back and gather information when you have 
not put into your program the kind of codes, as you say, that 
now the government is requiring. And that can be a real, real 
headache. So thank you for describing it, in just bare terms. 
We appreciate it.
    Mr. Paal, would you like to add anything to what Ms. 
Roberts is saying about tracking the necessary data that you 
are going to need to comply with the IRS requirements? You have 
got, I think, outside groups helping you with what you do. But 
have you had any useful guidance from the Administration? What 
are you hearing from others in your industry about the 
compliance effort needed for these reporting requirements?
    Mr. Paal. What we are hearing on the requirements has been 
changing consistently over the past several years. It is what 
are we to do this time? Well, what is it going to be next year? 
The most recent thing that we were able to do is to track 
everything. We got the raw data. And we figure with that raw 
data we can put it into any kind of a report that someone 
wants.
    You know, of course, when we are trying the reach out to 
our tax professionals in tax season, they don't want a call 
about what kind of health care reporting they want at the end 
of the year. But, you know, it is--we rely heavily on our 
professional advisers. You know, our attorneys and our 
accountants. But again, you know, these folks charge by the 
hour. So the more we use them for that, the more it costs us on 
the bottom line in order to comply. So it is a combination of 
time and cost.
    Ms. Foxx. Thank you very much.
    I yield back, Mr. Chairman.
    Chairman Roe. Thank the lady for yielding.
    I will now yield five minutes to the ranking member of the 
full committee, Mr. Scott.
    Mr. Scott. Thank you, Mr. Chairman.
    Mr. Chairman, when we talk about the Affordable Care Act, I 
like to remind people what the situation was when we were 
actually voting on the Affordable Care Act. People with 
preexisting conditions could not get insurance. Or if they got 
insurance, they would be paying exorbitant rates; 14,000 at 
some point during that time--14,000 people a day were losing 
their insurance, millions every year. Fewer and fewer employers 
were providing insurance. We were actually paying for the 
uninsured - $1,000 on the average policy went to uncompensated 
care; when people go to the hospital and don't pay. When 
someone with insurance goes and pays, they got to pay a little 
extra, about $1,000 extra on each policy. Costs were going 
through the roof. Women were paying more than men. Insurance 
abuses were commonplace.
    And when those people talk about repealing and replacing, 
it is interesting that there is no plan in sight that actually 
improves on the Affordable Care Act. We are talking today about 
broken promises. I guess there have been some broken promises.
    We were promised by the opponents of the bill that this 
would be a job-killer. In fact, since the passage of the bill, 
we have had record job growth in the private sector. 
Consecutive months that have been unprecedented. The promise 
that there would be a shift to part-time work was also broken. 
There is no evidence that there is any broad shift to part-time 
work. The promise of skyrocketing premiums was broken. Since 
2010, there has been a marked slow down of premium growth, as 
Mr. Brey has indicated.
    The cost of the Affordable Care Act was also broken. It is 
actually cheaper than we thought. In fact, we have a little 
chart up here. The blue bar is the projected 10-year cost of 
Medicare and Medicaid payment by the Federal government, 10-
year cost. After the Affordable Care Act, the red bar is the 
10-year projected cost of Medicare, Medicaid, Children's Health 
Insurance Program increases, and tax credits under the 
Affordable Care Act. And you will notice it is actually a 
little shorter than the bar for the 10-year cost for Medicare 
and Medicaid.
    Now, I guess this is what we call a gruesome consequence or 
broken promises or out-of-control costs. We actually during 
this time insured 11 million people and are spending less than 
before. Let's go over that again. Blue, Medicare and Medicaid 
10-year cost. Red, Medicare and Medicaid, Affordable Care Act 
tax credits, and children's health insurance. It's actually 
less after 11 million people have been insured.
    We forget that the Affordable Care Act is really the 
Patient Protection and Affordable Care Act. Insurance abuses, 
they can't cancel your policy when you get sick, they can't put 
lifetime limits on your coverage, women can't pay more than 
men. That is the patient protection part of the Patient 
Protection and Affordable Care Act. And so I think we have to 
put that--all of that into perspective. And we have heard about 
people cutting back in hours.
    Mr. Brey, could you tell me what you think would happen to 
your workforce if you arbitrarily started cutting people back 
to 29 hours?
    Mr. Brey. They would get other jobs.
    Mr. Scott. And so long as there is a good recession and 
they are stuck, you could probably get away with it for a 
little while. But as soon as they had options--
    Mr. Brey. Oh, absolutely. They are gonna go. And, in fact, 
the interesting thing is the very SHRM study that Ms. Roberts 
cites, on page four of that it says, ``very few organizations 
plan to reduce the total number of employees because of ACA.'' 
Only 5 percent of their respondents said that was gonna happen. 
And that is kind of where I am. We just don't make those kind 
of decisions based on this type of act.
    Mr. Scott. Thank you, Mr. Chairman.
    I yield back.
    Chairman Roe. Thank the gentleman for yielding.
    Mr. Guthrie, you are recognized for five minutes.
    Mr. Guthrie. Thank you, Mr. Chairman. And I will echo 
others and say it is great to have you back. And I think most 
people around here say you are one of their favorite members in 
Congress. And those of us who got elected when you did got to 
know Pam. And we know why you are great, because you had a 
great wife. And we really, really appreciate her. And you are 
in our prayers. Thanks.
    First, I want to thank everybody for coming here. My 
background is manufacturing. So I had--in the business 
environment--offered health insurance and still offer health 
insurance. And I was a human resources manager in a lot of 
respects. As a family business, as Mr. Paal said, you do a lot 
of everything, don't you? But I was also in charge of benefits. 
So I understand the frustration. And I sympathize for how 
difficult this law can be.
    As we talk about a lot of the pieces of the law, like we 
talk today about the employer mandate, the Cadillac tax, the 
health insurance tax, the benefits mandates, et cetera. But 
there is one piece of the law that I want to bring up that 
really concerns me. And that is the definition of a ``small 
group employer.'' In the health care law until January 2016, a 
small employer is defined as one with 1 to 50 employees. 
However, on January 1, 2016, that definition will change to 1 
to 100 employees. Those employers who have 51 to 100 employees 
will overnight be subject to many of Obamacare's benefit 
mandates, community rating rules, the essential health 
benefits, health insurance tax, composite rating rules, and a 
prohibition on group discounts. And that is just the name a 
few.
    And we have looked at an Oliver Wyman study that estimated 
that this change will increase premiums for these employers by 
18 percent. I think Mr. Brey said that the difference--small 
businesses typically pay 18 percent more than larger groups. 
And so it is kind of in line with this study that these 
employers from 51 to 100 will necessarily increase it by 18 
percent just because of the rating rules alone. I have serious 
concerns about what this will mean for the ability to provide 
quality affordable health care for their employees.
    And I have introduced a bill, it is H.R. 1624, the 
Protecting Affordable Coverage for Employees Act, that would 
stop this provision from going into effect and maintain the 
current definition of a small group employer as 1 to 50 
employees. And I am proud to say, as Mr. Polis talked earlier 
about opportunities to do things together, I am proud to say 
this is bipartisan--I have a Democrat cosponsor. It has 
bicameral support. And we have gotten through the bill--that we 
have gotten for the bill. And I hope this is something that we 
can take action on in this Congress.
    And in the time left, I know that you guys have full-time 
equivalent, less than 50 employees. I think you were saying--so 
you were in the 1 to 50. This wouldn't affect you, 51 to 100. 
But I don't know Dr. Troy, if you have looked at this at this 
provision before. Do you have any comments on that? In not, 
we--
    Dr. Troy. We look mainly at the impact on large employers. 
So these are a thousand or more. So this change wouldn't really 
affect what is happening on large employers. And we have not 
studied this provision specifically for that reason.
    Mr. Guthrie. Okay. I didn't know if any of you had any 
experience with that. Well, I appreciate that. I think it is 
important. And there are things that we need do to fix issues 
for these people. And look forward to continuing to work for a 
bipartisan, bicameral basis to move this forward.
    And Mr. Chairman, I yield back.
    Chairman Roe. Gentleman yields back.
    Mr. Pocan, you are recognized for five minutes.
    Mr. Pocan. Great. Thank you, Mr. Chairman.
    So let me just raise one point, and then I want to get into 
what I really want the talk about. I think one of the myths--I 
know there are two hearings today going on roughly around the 
same subject. I think one of the myths is about the number of 
businesses affected. And I just want to put, you know, just out 
there, 96 percent of employers are small businesses that have 
fewer than 50 employees, thus are not affected by the employer-
shared responsibility provisions. I am one of those. I have had 
a business for 28 years.
    And then the overwhelming majority of the remaining 4 
percent, 95 percent of the businesses with 50 or more employees 
and 98 percent of the businesses with 200 or more employees, 
already offer coverage. So we are talking about a relatively 
small number. Not that any small number is insignificant. But 
the vast majority of employers--let's face it. We have an 
employer-based health care system in this country. And the vast 
majority are providing that or, in the case of the small 
employers, are not necessarily required to. But this is the 
system that we have in the country. And that is what we really 
have.
    There is a slide I would like to put up I think that we 
have regarding the average premium for employer-based family 
coverage. You are not going to see the bottom colors real well, 
so I will try to explain them. And I think from the testimony, 
I know Mr. Brey specifically brought up the cost of health 
insurance. I know with premiums increases I used to have too, 
double digits for many, many years for my employees.
    [The information follows:]
    
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    And if you look at that line, that is--the top line shows 
you where the trend was going. But the bottom line, you can't 
quite tell, but there is a blue line showing where the actual 
costs have been since the passage of the ACA and where they are 
expected to go. And this not only corresponds with your 
testimony, Mr. Brey, but with my experience. I actually had 
employees' health insurance go down this year. I haven't seen 
that since maybe I had hair. And it has been a long, long time. 
So I was really excited to have that actually happen.
    But also, I was talking to the administrator of a hospital, 
Meriter Hospital in Madison, Wisconsin, who told me as soon as 
the Affordable Care Act passed, their costs have really 
flattened. Now, being a business person, lowering the cost of 
health care means you are going to ultimately lower the cost of 
the premium, which means there will be a lower cost to the 
business. And since many businesses like yourself, Mr. Paal, 
you are talking about capping how much you offer to the 
employees. That means the employers will ultimate will have--
the employees will ultimately have more money in their pockets 
because that cost is going to go down. So I am looking for the 
downside on that aspect. I don't know if I see it as an 
employer.
    Mr. Brey, specifically, can you share your experience, you 
know, talking about those increases prior to 2012 and the 
increases now?
    Mr. Brey. Well, they were almost always double digits; 9 
percent, 11 percent, 13 percent, 15 percent. And in--you know, 
Maryland already mandated certain small group coverages. So 
what the insurers did is they used the average age of the 
group. So the intrinsic increases that you are talking about, 
that doesn't include what happens when you cross an age band.
    So, for example, you are already going to have a 10 or 13 
percent increase, and then the average age of your group goes 
over 40, you know what happens. And at one point, I actually 
removed myself from our own plan because I was the oldest 
employee and went on my wife's plan, which was substantively 
identical, only to lower the average age of the group for one 
more year because the last thing I wanted to do again was tell 
my employees about another change in our health coverage.
    Mr. Pocan. I remember one time getting a 12 percent 
increase, and I was really excited about getting that for a 
year. And that is why, like, this year was really different.
    Mr. Paal, in your experience prior to 2012 to now, the 
increases, clearly, you must have also experienced what Mr. 
Brey and I have experienced, much higher increases and now we 
have got a little bit of a flattening event; is that correct?
    Mr. Paal. Absolutely. We have experienced the same type of 
increases consistently year over year.
    Unfortunately, what we have seen is a lot of specific 
examples. When they did away in Maryland with the average age-
based pricing, they price out each employee individually. Which 
means, you know, prior to ACA, everybody in our company paid 
the rate of a 43-year-old. Well, now the 62-year-old pays the 
rate of a 62-year-old. And that cost is substantially more.
    I took a look at some of the figures in regards to that 
employee. His premium three years ago when we had a shared 
group, his premium was $242. His premium on our most recent 
renewal, he declined it because it was too much money, would 
have been $630.
    Mr. Pocan. Okay. So now looking, you say that the actual 
employer's cost to insure a full-time employee range from $107 
to $322 a month? Is that your current?
    Mr. Paal. That is--right. That is--what we do, we pay 50 
percent. So--
    Mr. Pocan. I gotcha.
    Mr. Paal. So double that number and that is what the total 
price is for his insurance.
    Mr. Polis. Gotcha. And if--you said it would increase $2 an 
hour potentially under the ACA-defined small business employer 
plan. I am averaging it out. That is about $346.66 a month. 
Which would be slightly more than the $300 cap you have, but 
actually would be within that realm.
    Because I know we--we provide 100 percent for our 
employees. Because part of it is you are being competitive; 
right? I mean, I know you mention in here you can't charge more 
for roses. I looked at your Web site. I noticed you don't 
compete on price. Because you shouldn't compete on price. That 
is what we are all told. I foolishly named my business Budget 
Signs, so I have to deal with that a little bit, when I was 23. 
But I learned.
    But, you know, you have service, you have all the other 
things you compete on. So technically, it is not true it is 
just based on the price of roses. People go to you for a lot of 
other reasons. But it seems like there is some wiggle room in 
here on the numbers on that.
    Mr. Paal. What I was trying to illustrate there is that, 
you know, and being in business, you understand you have a pot 
of money that you can pay to an employee in compensation.
    Mr. Pocan. Sure.
    Mr. Paal. You can pay it in salary, you can pay it in 
salary and benefits. But it is still the same amount of money. 
If I take that money and I give it to an employee, I am 
required to offer them the benefits. So a portion of that gets 
shaved off and I can only pay them a little bit less in salary. 
Whereas, if they go to one of my competitors to do the exact 
same job, that competitor can take the same bucket of money, 
pay them a higher salary, they can go to the exchange. They are 
eligible for a subsidy.
    At the end of the year, they have got $2,300 less working 
for me working the exact same job, exact same hours, exact same 
employer's costs in compensation doing the same thing in the 
same town. That just seems silly.
    Mr. Pocan. Yes. My time is up, otherwise I would ask you 
another question--
    Chairman Roe. Thank the gentleman for yielding.
    Mr. Messer, you are recognized for five minutes.
    Mr. Messer. Thank you, Mr. Chairman. Again, I would want to 
echo the comments of so many others that have talked about how 
beloved both you and your wife Pam are. And just want you to 
know you continue to be in our prayers. Thank you for being 
here.
    You know, last Congress with Chairman Roe's leadership, we 
had a field hearing in my district focusing on the Affordable 
Health Care Act's impact on schools, on workplaces. Congress 
needed to hear directly from employers about the true impact of 
this law.
    I have to tell you, much of the testimony that I have heard 
today reminds me of the economist who saw something working in 
practice and wondered if it worked in theory. And, you know, 
the reality is that you can talk about all the theory you want 
here--millions of employees are being impacted by this law. For 
many, they have lost their health care policy. For many, they 
have lost their doctor. For many, they have seen their prices 
go away.
    That hearing highlighted that the employer mandate creates 
a catch-22 for both employers and employees. There is a high 
price to pay, whether or not businesses and schools comply with 
the law. For example, witnesses were faced with paying the high 
cost for health care that is spiking, paying a high tax, or 
cutting employees or employee hours.
    That is why I introduced the School Act last year, which 
would exempt schools from this onerous provision, eliminate 
this odd circumstance where we are taxing schools and local 
municipalities to pay for the President's health care law. I am 
going to be reintroducing legislation that would deal with the 
employer mandate and redefine a large employer as an employee 
with 100 or more employees for the purposes of the individual 
mandate, instead of the current threshold of 50.
    As Brett Guthrie talked about earlier, there is a 
difference between the benefit regulatory compliance and where 
the threshold is for the employer health care mandate.
    Mr. Paal, in your testimony you mentioned the unknown cost 
of insuring future employees, and it has made you apprehensive 
at potentially expanding your business. As a business owner who 
would have to comply with this tax, would that change from a 50 
to 100 employee threshold help you in your business in 
considering the next employee you hire?
    Mr. Paal. Absolutely. You know, a great portion of my 
expansion that I have performed over the past decade has been 
in acquiring existing flower shops. Because they then become 
part of our company, very few of these other flower shops--in 
fact, not a single flower shop that I have purchased offered 
health care coverage to their existing employees. So when they 
come onboard with us, the full-timers always got health care, 
because that is what we do.
    I would have to double the size of my company--which I 
would love to do. But it is going take me a little while to do 
something like that before I get up to 100. I have just crossed 
the 50 threshold on the FTE. So having a cap at one hundred, I 
think that is--that is very appropriate. I mean, I run a bunch 
of Main Street flower shops. You know, it is not a large 
manufacturing corporation. It is a bunch of Main Street 
businesses.
    Mr. Messer. Yes. And thank you.
    And Dr. Troy, I will ask you for maybe a little bit of 
insight on the Cadillac tax, the health care cost there. I 
represent a largely rural district with manufacturers, other 
entities. One of the challenges that district has with the 
Cadillac tax is that because it is based on the gross cost of 
employee--and in the rural areas, there is not the kind of 
competition that drives down cost that there can be in more 
highly-populated urban areas--this tax could disproportionately 
impact small towns and rural America.
    Can you comment a little bit on that reality?
    Dr. Troy. Yes. One thing we are finding with the excise tax 
is it is--as conceived, it was a Cadillac tax. It seemed like 
it would hit big corporations with generous health care plans. 
But it is hitting a lot of places that are unanticipated, 
including rural districts, as you were saying. But the states, 
localities, a number of union members. Unions are against it 
because it affects their health plans. So it is having wider 
impact than originally anticipated.
    Mr. Messer. Thank you.
    No further questions, Mr. Chairman.
    Chairman Roe. Thank the gentleman for yielding.
    Ms. Bonamici, you are recognized for five minutes.
    Ms. Bonamici. Thank you very much, Mr. Chairman. And 
welcome back, Dr. Roe.
    I want to thank everyone, all the witnesses for testifying 
before the Subcommittee today. It is clear that people have 
pretty strong opinions about the actual health care law. But 
there does appear to be a commitment among everyone that people 
in this country should have access to affordable health care. 
And I appreciate that very much.
    In my home state of Oregon, where implementation was, let's 
just say, far from perfect, we have been reminding ourselves 
many times that the law was about more than Web sites. It 
really is about access to health care. We have seen a lot of 
positive effects, including the fact that the uninsured rate 
last year was less than 12 percent. The year before, it had 
been closer to 20 percent.
    It is important that we have this conversation about the 
benefits of the Affordable Care Act. And I really hope that my 
colleagues can work together, as Ranking Member Polis was 
saying, so that we can address the concerns; these concerns 
that have been raised about lack of clarity or inconsistencies 
and even cost without rolling back the benefits for Americans 
that they have seen from this health care law.
    Now, Ranking Member Scott did a great reminder of what 
things were like before the Affordable Care Act. I wasn't here 
in Congress when it passed. But I used to work as legal aid 
helping low-income families. And there were a lot of families 
that would come in absolutely desperate with high debt. They 
wanted to file bankruptcy. And typically, that was because they 
had unexpected medical bills from either inadequate or no 
insurance.
    Now, post-Affordable Care Act, recently I had a 
conversation with a doctor in Oregon. He said he used to 
volunteer at a free clinic. They don't need him anymore. 
Because so many people have coverage, they don't need to go to 
the free clinic. So I am looking at the benefits and hoping 
that we can, again, work together to address the 
inconsistencies and get some more clarity.
    And I would also wanted to talk about this, because we are 
really focusing on small businesses. I had a great conversation 
in the district I represent with a manufacturer. At the end of 
2013 I went out to visit the business. And I said tell me how 
things are going with the implementation of the Affordable Care 
Act. And he said well, we are close to having 50 employees. We 
were really concerned because we want to grow so we went and 
talked to our broker, and we found out that even if we grow our 
employees will be getting better coverage and not paying any 
more. Let's go see the factory. So we have to talk about how 
this is actually working and helping a lot of employees and 
employers.
    And Mr. Brey, I wanted to ask you. You talked about all of 
the choices you have now as a small business owner. I think you 
said more than 100 choices, which doesn't sound like a 
government takeover of health care. It sounds like the free 
market working.
    So can you talk a little bit about the process, compare 
before and after the Affordable Care Act. Just navigating the 
system, talk about whether there is enough support out there, 
enough information. I actually have someone in my Oregon office 
who is there to help constituents and small businesses if they 
have questions about the ACA. But are you getting enough 
information out there to get through this and, as you said, go 
through those choices and make decisions about your coverage 
for your employees?
    Mr. Brey. Sure. You can always have more information, I 
think, when it comes to things like this. But even you know 
when we were a much smaller company, you know, we went to an 
insurance broker. So we have always all along, I guess, had 
kind of advice to help us through all of the changes and things 
that have happened.
    So, you know, I haven't found it as a small employer 
particularly difficult. That is not to say that there aren't--
you know, it couldn't be better. But we had--you know, there 
was one point in Maryland as I mentioned before, we literally 
had two insurers offering coverage. and plus Kaiser, which we 
couldn't do because we were expanding into an area that wasn't 
convenient for my employees.
    So, you know, the idea now that we have insurers offering 
coverage that I have never even heard of in Maryland I think is 
exciting. I think it is an example of the law at least starting 
to work the way it is supposed to.
    Ms. Bonamici. And it is interesting. Because I know both 
Mr. Paal and Ms. Roberts talked about spending more time now to 
try to get coverage for their employees. But are you spending 
more time, less time, about the same time?
    Mr. Brey. You know, I always hated being the HR guy, the 
benefits person, in my company. So I think there was a period 
of time at the beginning of the Affordable Care Act's passage, 
and then there was a year there I think as things starting to 
come in where I did probably spend some more time. But it is 
time I have spent now. And I know where we are. And we are on 
an ACA plan and we know what we are doing.
    Ms. Bonamici. Thank you. And before I yield back, I just 
want to again say, Mr. Chairman, that I hope we can work 
together to make this law work, to make sure that people do 
have access to affordable health care, and that we work out 
some of the inconsistencies that are making it challenging for 
some of the businesses that testified today and across the 
country.
    Thank you. And I yield back.
    Chairman Roe. I thank the gentlelady for yielding.
    Mr. Allen, you are recognized for five minutes.
    Mr. Allen. Thank you, Mr. Chairman.
    And being that I have been a member of Congress for just a 
short period of time, but prior to that I actually worked for a 
living in the business community for over 30 years in the state 
of Georgia. And unlike, I guess, Maryland, which has had a 
mandated program for some number of years, Georgia has not 
mandated-employer health plans.
    In fact, it was the business community that started in the 
health care business. Just a little history that I thought 
might be interesting is that when the government actually 
capped wages during World War II is when the business community 
began to offer health insurance and other benefits to 
supplement their workforce. So that tradition has continued. 
And it has become a very important benefit for our employees. I 
know our employees, we had a shared program that we thought 
worked pretty well. And we encouraged our folks to participate 
in it.
    As early as the Great Depression, the government has wanted 
to get in the health care business. In fact, it was 
contemplated in the Social Security law that the government get 
involved in health care. And, of course, now the government 
owns health care and has mandated that businesses offer health 
care or either send their people to the exchanges. Which, 
again, creates tremendous uncertainty in the marketplace at a 
time in our economy--we don't have the Great Recession, but I 
don't think growing the economy at 2.5 percent is going to get 
this country where it needs to be.
    And I think that this plan is the greatest impediment to 
economic growth in this country. Everyone knows, and I think 
everyone will admit, that the thing is flawed. And there are 
two big question marks here. Do you fix a flawed program, or do 
you start all over? And I think that is the debate that we have 
before us.
    One of the things that is of great concern in my direct is 
our rural hospitals are going out of business and our rural 
medical practices are moving to urban areas because it has 
wrecked rural health care. You know, deductibles--and I think 
probably one of the biggest reasons for that is that if you 
talked to any hospital today, the thing that is driving down 
cost is the fact that deductibles on the standard plan are 
$1,300 to $2,600 per family. And then on the bronze level, they 
have gone from $5,100 to almost $10,500.
    Now, I can tell you because of this economy and the last 
few years, folks are living week to week. And when they have to 
have some type of medical procedure, they simply don't have the 
cash or the money to pay for it, which is a dangerous health 
care issue in this country.
    And with that, Ms. Roberts, I would like to ask you, 
obviously, you are debating this high-deductible plan versus 
your current plan. Obviously, these deductibles are a big 
challenge for you. What are you all looking at as far as a 
deductible? And how do you think that will affect the health 
care of your employees?
    Ms. Roberts. If we decide to go to a full replacement to a 
high-deductible plan that is very similar to our ACA high-
deductible plan, we are looking into helping our employees 
through wellness incentives. We would reward certain behavior 
with contributions, perhaps, to an HSA that would offset these 
higher deductibles.
    However, as I mentioned in my written statement, the EEOC 
is looking at wellness plans very carefully and wanting to put 
a cap on that. That would also be a challenge for us because, 
as you mentioned, with a high deductible, the insurer must meet 
the first $1,500 or higher before any insurance coverage would 
kick-in.
    Mr. Allen. Okay. As far as the overall effect that it has 
had on growing your company, do you think without this law that 
Morris Communications could have expanded its business?
    Ms. Roberts. We have had to look very carefully at how we 
spend our money. Revenue is very hard to come by in a mature 
industry like the newspapers. So every time we look at what we 
can do for our employees, for example, with the excise tax, we 
see that as an impediment to funds that could be better used on 
our employees.
    Mr. Allen. To grow jobs.
    Thank you. And I yield back.
    Chairman Roe. Thank the gentleman for yielding.
    Mr. Courtney, you are recognized for five minutes.
    Mr. Courtney. Thank you, Mr. Chairman. And welcome back.
    So, first of all, I just want to make a few observations 
and join my colleague, Mr. Polis. You know, coming from a state 
that embraced the Affordable Care Act--Governor Malloy, you 
know, moved quickly to set up an exchange. We are now into year 
two of the exchange operations. And again, we have seen 
dramatic increases in terms of uninsured. We have basically cut 
it in half; in the state of Connecticut, about 500,000 people. 
We are only a state of 3.3 million people.
    The insurance department just did a second round of rate 
filings for 2015. Again, both exchange plans and non-exchange 
plans. And I would like to just sort of offer for the record--
because rates went down. They didn't go up in 2015. The savings 
were in the millions to both small employers, individual health 
care plans, and across the board. I mean, Blue Cross, you know, 
Cigna, United Healthcare, and some of the smaller plans.
    We have more insurers in the marketplace; Harvard 
HealthCare from Boston just announced they are again opening up 
for business in the state of Connecticut and another insurer 
out of Springfield, Massachusetts, is also moving in.
    So we have more competition, more choices. And that is why 
an employer in the heart of my district from eastern 
Connecticut, Willimantic Waste, basically saw their rates go 
down for 2015. Because they actually had more competition out 
there amongst different insurance providers competing for the 
business. They have about 275 employees. You know, they--it is 
a trash removal service there. And, you know, it is--and they 
were very nervous about this law. I mean, we had a lot of 
dialogue back in 2010 when this measure was introduced.
    So, Mr. Chairman, I would like to enter the Connecticut 
State Insurance Department's chart for rate reductions for 2015 
and ask that be made part of the record.
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    Chairman Roe. Without objection, so ordered.
    Mr. Courtney. And again, I would say listening to the 
testimony and reading it, as Jared said, if we are gonna get 
off of the political theater and really focus on legislating, 
we can actually I think do some good things. Both in this 
committee and the Congress as a whole looking at this law.
    If you go back to 2010, when the excise tax, I would argue 
was cobbled on to the bill at the end of the process, the House 
passed the Affordable Care Act with no excise tax. And I think 
that is an important point for people to remember. It is not 
some intrinsic, you know, pillar of the law. The fact is it was 
the Senate Finance Committee that, frankly, adopted a lot of 
economic thought, that taxing health benefits has been a 
mistake in America going back to World War II. And this was, in 
my opinion, a pretty mangled version of trying to promote that 
sort of--that philosophy.
    And 192 House members actually signed a letter protesting 
the Senate's inclusion on this. The bill that they initially 
proposed would have gone into effect in 2013 with much lower 
tax thresholds for the 40 percent excise tax. Because of that 
push-back, the law was delayed five years to 2018. The 
thresholds were raised, we excluded vision and dental. You 
know, this was something that was a very hotly-contested item. 
And as we now know, looking at the reports that are coming in 
from actuaries, whether it is Towers Watson that is working for 
Fortune 500 companies, Milliman and Associates, who just did a 
study for the teachers union. We have got Mercer.
    I mean, again, all the sort of, you know, blue chip 
analysts that are out there is that, again, this is still a 
flawed mechanism; that the incidence of tax is gonna hit 
basically regions of the country geographically. Because that 
drives premium costs much more than benefits. And so-called 
Cadillac benefits, as well as gender and age.
    And so that achieves nothing in terms of trying to have a 
more efficient health care system and promote quality and 
affordability. So again, I would just say to the chairman, 
there are many of us who, again, were very concerned about this 
proposal, you know, back in 2010. It was a truce that was 
agreed to. It was not an agreement when that was incorporated, 
the five-year delay. And it was well understood that it would 
be revisited, again, as we get closer to the time.
    And as I think the point was made, now is the time to do 
it. The fiscal note from the Congressional Budget Office is $87 
billion over 10 years. That has actually come down fairly 
significantly from the last couple of years or so. And I am an 
optimist. And I know we have got a great chairman here. I have 
been on some bills with him -on IPAB-and a couple of others. 
But again, the question is are we gonna do this surgically? 
And--which I think is the appropriate way to do this. And if 
you do that, then, frankly, I think some good things can 
happen.
    So I want to thank all of the witnesses for being here. As 
a former small employer, I lived the life of double-digit 
increases. And we are very excited in Connecticut that the 
changes that are taking place are particularly helping. We had 
the largest job growth in 2014 since the 1990s. So, you know, 
that ain't bad, despite all of the, you know, sort of, you 
know, predictions of doom and gloom.
    So with that, I yield back.
    Chairman Roe. Thank the gentleman for yielding.
    Mr. Walberg, you are recognized for five minutes.
    Mr. Walberg. Thank you, Mr. Chairman. And welcome back, as 
well. And may I add the fact that I honor you for doing what I 
as a minister for many years standing in front of a couple 
taking the oath to love and cherish until death do them part, 
you exemplified that. I honor you for that.
    Ms. Roberts, thank you for mentioning the wellness issue, 
as well. I think it is a misguided thought, let alone approach, 
from the EEOC that goes directly opposite to what we really 
ought to be doing; to encourage people and to make sure people 
have equal opportunity in health, as well.
    But you have mentioned the statistics of companies having 
to change their health care benefits packages to comply with 
the ACA mandates, fees, and taxes. One change has been to offer 
fewer benefits, but increase taxable wages. That has been 
mentioned several times this morning; for employees to pay for 
their own health care costs.
    How has this and other changes been received by employees, 
that you are aware of?
    Ms. Roberts. This year, as I mentioned, at Morris was the 
first year that we introduced a high-deductible plan. And that 
was to align and comply with the ACA. It needed much more 
communication on how this type of insurance plan works. People 
are accustomed to their copays and then a small deductible and 
then a co-insurance. However, we have had to explain that while 
these premiums are much lower than you are used to, beyond your 
wellness benefits, everything else will be out of pocket until 
you hit that high deductible. So that takes a lot of education 
for these employees.
    Morris was already paying 100 percent of wellness visits 
prior to the ACA. So that part is easy to communicate. But just 
the difference between a preferred provider organization-type 
insurance plan versus a high deductible, we have had to do a 
lot of education with our employees.
    Mr. Walberg. Well, I think along with that, the evidence 
is--I have heard my colleagues' conversation about the benefits 
of the ACA. And there indeed may be--and I would debate it. But 
there may be more people who have health insurance coverage 
now, but they don't necessarily have health care. And I think 
that is a challenge. When you get down to the issue of the 
cost, the deductibles, the prescription cost increases. And 
ultimately, people who have a health insurance policy, but 
can't afford the health care from that point.
    Dr. Troy, beginning last year, individuals and small 
businesses began paying a tax on the health care insurance 
products they purchased. The tax increased 40 percent this 
year. And according to the United Health Care health insurance 
filings in Michigan--and I could give other stats from other 
health care providers, as well, that would coincide. But United 
Health care says a family of four in Michigan will pay $537 in 
increased premiums due to this ACA tax.
    Will this increase in small business health insurance tax 
push more businesses past the excise and, slash--and coming 
from the motor capital of the world, I hate the use Cadillac in 
a pejorative way. But we understand what it says. It is a 
luxury, a fine car. This isn't a fine law. But it will push 
businesses past the excise Cadillac threshold. What is your 
response to that?
    Dr. Troy. Well, we are finding that the--and I don't see it 
as a pejorative to say, Cadillac tax. Because it means a 
praiseworthy product, something that is of high value--
    Mr. Walberg. Okay--
    Dr. Troy. But what we are seeing is that the Cadillac tax, 
because of the version you mentioned, but others as well, is 
hitting more and more and more employees over time. And that by 
2031, for example, it is going to hit the value of the average 
family plan, which means that in many ways, the excise tax or 
Cadillac tax acts a little bit like the Alternative Minimum 
Tax, which was designed to hit only a very small number of very 
wealthy employees in the late 1960s, and then eventually grew 
until it hit many middle class employees and taxpayers.
    So similarly, we think that this is going to be hitting 
more and more people over time. Not just people in so-called 
Cadillac plans, but in--
    Mr. Walberg. Is it a bug or a feature of the law?
    Dr. Troy. You are asking me sir to speak to intent. I can't 
say. But it seems like it is a feature; that the idea if you 
accept the Gruber comments, is that the idea was to try and get 
the--to tax the higher-valued plans and to make individuals pay 
more without it seeming like the tax would be directed at 
individuals.
    Mr. Walberg. Thank you.
    My time is expired.
    Chairman Roe. Thank you, Mr. Walberg.
    Mr. Takano, you are now recognized for five minutes.
    Mr. Takano. Thank you, Mr. Chairman. And personally, it is 
great to see you back. And appreciate your being here. And you 
are a great, great colleague on the other side, and we would 
like to work with you on fixing some of the features of the 
law.
    It has been five years since the Affordable Care Act was 
passed. The last five years have met real progress for my 
constituents and the residents of California. When I took 
office in 2013, a quarter of my constituents were uninsured. 
Now more than 4 million Californians, who could not get 
coverage, have health insurance through the state marketplace 
or Medicaid. Nearly a half a million Californians got rebates 
when insurance companies failed to use premium dollars to pay 
for health care, and another 400,000 seniors in the state saved 
close to $400 million on prescription drug costs. That is 
nearly $1,000 per beneficiary.
    Now, while there are many areas in the law that need 
improvement, we can't go back to the days when people could get 
kicked off of their plans as soon as they got sick or find out 
too late that they exceeded their plan's annual limit when they 
need it the most. I am sympathetic to fixes that help make the 
law more effective and address things like the excise tax on 
high-cost plans. But I do not believe that repealing the entire 
ACA is the right path forward.
    And, you know, I thought--I really appreciated the 
legislative history lesson that we got from my colleague from 
Connecticut. It reminds me, I was looking up on my iPhone what 
the--who originated the quip, ``the Republicans are the 
opposition, but the Senate is the enemy.'' And that might have 
been the case here. But in this particular case, it sounds like 
that was what happened; that something got attached in the 
Senate Finance Committee and the House bill never intended to 
have the excise tax.
    But let me just go on to say that, you know, the ACA has 
improved coverage for millions of Americans and provided over 
11 million more through the marketplaces. And I want to 
emphasize that when we often talk about the law in the 
abstract, that there are some very real people that have been 
protected by this law.
    For instance, Bob Kamack, from Alpharetta, Georgia has an 
incurable brain tumor. After he was diagnosed in April of 2013, 
he feared that he would be kicked off of his wife's employer-
based insurance policy or offered prohibitively expensive 
premiums. Bob is grateful for the ACA's consumer protections 
that allow him to have quality coverage that won't jeopardize 
his family's finances.
    Bob has said that his type of tumor is, ``one of the best 
you can get,'' because it is slow growing and responds to 
treatment and he expects to live anywhere from 5 to 20 more 
years. Bob has said that, ``I have seen so many people lose 
everything because they have gotten cancer early in life.'' 
``My biggest fear''--oh, this is a continuation of the 
quotation--``my biggest fear is that the ACA will be overturned 
and I will leave my family in debt.''
    Bob's wife's premium is fully covered by her employer-
provided insurance. Specialist visits are $60 and his 
deductible is within a few thousand dollars. Bob feared that 
without the ACA's consumer protections for people with 
preexisting conditions, his coverage would have been denied.
    Ms. Roberts, now, you are just a few--I don't know how many 
miles. But you are fairly close to where Mr. Kamack lives. Can 
you discuss what might have happened to him and his ability to 
obtain affordable coverage in the absence of these consumer 
protections like the preexisting conditions? And I realize that 
there is some--there is some issues that you are dealing with 
trying to--with this excise tax coming up. But would you at 
least say that--concede that the ACA would have protected 
people like Mr. Kamack from being kicked off their policies?
    Ms. Roberts. Even prior to the ACA, Morris Communications 
did not kick people off their plan because of certain 
conditions or discriminate on any type of conditions. Employers 
like Morris had good plans before the mandate, and we continue 
to have good plans. Some of which we absolutely agree with the 
mandate, very parallel coverage.
    So if he were an employee on our plan or his wife was an 
employee, he would have the same coverage regardless of his 
illness.
    Mr. Takano. So just to clarify. It could have been the case 
that the premiums could have risen to a certain level that 
might have made it prohibitive. Maybe you were a company that 
would have tried to work against that and would have tried to 
keep people on the plans. But the truth is that many people 
could be priced out of those plans or they could have been, you 
know, just simply not accepted by the insurer. And the ACA 
protects those folks.
    Now, I understand there is some difficulties with the 
excise tax, which has caused you to take a look at 
restructuring your health plans, which not be so likable by 
your employees. But nevertheless, I think that this case with 
Mr. Kamack shows us that in Georgia, the law has protected 
people like him from being discriminated against by the--or 
summarily just kicked off of insurer plans.
    Mr. Chairman, I will yield back at this point. And I asked 
my questions. And thank you so much.
    Chairman Roe. I thank the gentleman for yielding.
    Mr. Hinojosa, you are recognized for five minutes.
    Mr. Hinojosa. Thank you, Chairman Roe. Can you hear me? I 
also want to welcome you back to the committee. And know that 
working with you on this committee and other caucuses that you 
and I serve on, I have learned to appreciate and respect the 
great work that you do here in Congress.
    I ask unanimous consent that a letter from the Small 
Business Majority outlining their support for the Affordable 
Care Act, which explains the law's benefits to small businesses 
and workers while reducing the job loss and lowering health 
care costs, be entered into the record.
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    Chairman Roe. Without objection, so ordered.
    Mr. Hinojosa. Thank you. Despite the rhetoric from my 
friends on the Republican side of the aisle, the facts speak 
for themselves. The Affordable Care Act is working. Today, the 
percentage of uninsured Americans is the lowest in 50 years. 
And the facts show that in 2014, health care spending grew at 
the slowest rate on record and that 129 million Americans with 
preexisting conditions can no longer be denied coverage. Since 
2011, as a result of the Affordable Care Act, Americans have 
saved a total of $9 billion on their premiums.
    Last month, the Congressional Budget Office announced that 
the Affordable Care Act will cost $142 billion less over the 
next 10 years than they originally thought. Just yesterday, 
April 13, a Gallop survey that was released showed that nine 
out of ten adults now say they have health insurance. This 
morning, another Gallop poll was released showing that the 
uninsured rate has dropped to 11.9 percent, which is 5.2 
percentage points lower than it was at the end of 2013.
    So millions more Americans now have affordable, quality 
health insurance. In addition, the uninsured rate among 
Hispanics has dropped by 9.3 percent since the end of 2013. And 
these numbers cannot be denied.
    Now, we hear a lot of rhetoric on how burdensome some 
believe the employer-shared responsibility provisions are. 
Again, let's look at the facts. Over 96 percent of all small 
business employers are exempt from the shared-responsibility 
provision. And of the remaining 4 percent of small businesses 
it applies to, the overwhelming majority of them already 
provide health insurance for their employees.
    So the ACA also makes it easier than ever for employers to 
provide health insurance for their employees through the newly-
created small business exchanges. The ACA is here to stay. It 
reminds me of Social Security, reminds me of Medicare and how 
when they were signed into law there were 30 percent who said 
it would never work, it would never work. And look at how well 
it works today. Instead of continuing their endless 
obstructionism, I would hope that my friends in Congress on the 
other side of the aisle would instead work with us to 
strengthen the law for future generations.
    My first question goes to Mr. Brey. Would it be fair to say 
that before the ACA, your choice of insurance options for your 
employees were limited?
    Mr. Brey. Beforehand? They were limited, yes.
    Mr. Hinojosa. How has that changed since the passage of the 
Affordable Care Act?
    Mr. Brey. We have more companies offering in Maryland for 
small group. And we have many more choices and variety of plans 
to choose from.
    Mr. Hinojosa. Mr. Brey, we have heard stories of how 
businesses must now deal with more paperwork, and they are very 
unhappy about that. So, when obtaining insurance for their 
employees, what has your experience been as far as a lot of 
paperwork?
    Mr. Brey. Don't let me be too Pollyanna about this. 
Anything I can do or anybody can do to reduce paperwork faced 
by small businesses and large businesses, for that matter, I am 
in favor of. But my personal experience was that there was a 
little bit of a learning curve in the beginning. But once we 
were through that, we are moving forward.
    Mr. Hinojosa. Mr. Brey, can you talk a little bit on the 
coverage for employees that you and your family now have?
    Mr. Brey. It is--again, Maryland mandated some small group 
provisions before the Affordable Care Act came in. Meaning that 
for an insurer to offer insurance in Maryland, they had to meet 
certain criteria. So from my perspective, there has not been a 
huge change.
    Mr. Hinojosa. My time has expired.
    And I yield back.
    Chairman Roe. I thank the gentleman for yielding. Ms. 
Wilson, you are recognized for five minutes.
    Ms. Wilson of Florida. I would like to offer my condolences 
to Chairman Roe and welcome you back. Looking forward to 
working with you. And I want to thank you for convening this 
meeting and Ranking Member Polis for this hearing. Thank you so 
much.
    As a lifelong educator, I cannot stress enough how 
important health is in ensuring children have the opportunity 
to develop, learn, and grow. Not only does this include the 
health of the child, but the health of the parents. And this is 
where the ACA is working. The ACA is working to ensure that 
parents have access to affordable health insurance.
    And I am proud to say that this year my home state of 
Florida led the nation in the number of enrollees on the 
federal marketplace, with nearly 1.6 million Floridians finding 
quality affordable health care. And now I am fighting for them 
to expand Medicaid so millions more can be covered.
    Because so many Americans can access health insurance on 
the marketplace, parents are no longer stuck in their jobs for 
fear of losing their health insurance. This means more parents 
can go back to school or train for a career that will allow 
them to better provide for their children. This means more 
parents can choose to work part time and care for their young 
children. This means parents have the flexibility to make 
decisions that make their families stronger.
    The ACA is also working to ensure that more children have 
access to health insurance. Although many of the ACA provisions 
and directives are increasing adult care coverage, research 
shows that when parents are covered, children are covered, as 
well. And more parents are getting covered. The ACA is also 
working to ensure that children have access to better health 
insurance.
    The ACA ensures marketplace insurance plans, as well as 
employer-sponsored plans, covers preventive dental and vision 
services for children. This means more parents can take their 
children to get their flu shots this year. This also means that 
more parents can afford to take their children to the eye 
doctor to get the glasses they need to do better in school. And 
I noticed that many of you are using reading glasses. And you 
can imagine what happens to children in schools who cannot see 
and don't even realize they cannot see. This means more parents 
can access the services that allow them to raise healthy, happy 
children.
    And I am sure all of us want that for our country. So while 
we can talk about ways to improve the ACA, we cannot for the 
sake of our children afford to go back. I continually call the 
Affordable Care Act, Obamacare. In fact, I always say Obama 
cares about the men, women, and children of our nation.
    So this--I have a question for Mr. Brey. As a small 
business owner, you likely have several employees with children 
who depend on their employer-sponsored insurance that you 
provide. Can you speak about your ability to offer your 
employees better plans now that the ACA requires many plans to 
have additional benefits for children, such as preventive, 
dental, and vision care?
    Mr. Brey. I think it is very important. I come from a 
pretty big family. And, you know, like most of people here, if 
you operate a small business your employees work for you for 
long periods of time and they become like members of your 
family and so do their children and their pets. So you love 
to--you love the idea, if you are me, that you know that you 
are offering coverage that is doing real good in their lives. 
My bookkeeper's husband is self--an individually employed 
landscaper. So for many years she worked for me only to get the 
health coverage. I mean, I am a heck of a boss. But the primary 
reason I think was her health coverage. So she has been able to 
use it. She has benefited from it. And I am very happy to 
provide that.
    Ms. Wilson of Florida. Okay. Can you see us going back? How 
would that impact your employees?
    Mr. Brey. As I said in my testimony, the situation before 
the Affordable Care Act, inaction was not acceptable. We just 
could never have endured it. As it was, we were--like everybody 
here, we were tweaking plans and making changes to plans and 
doing everything we could to continue to insure people but be 
able to afford it as a business. I can't imagine going back.
    Ms. Wilson of Florida. Thank you.
    Chairman Roe. Thank you for yielding.
    Mr. Grothman you are recognized for five minutes.
    Mr. Grothman. Thank you much. We will talk to Dr. Troy. 
Thanks for being here today. You are very educational.
    You studied the impact of the health care law. And there 
are a lot of reasons why the cost of health care is up; the 
aging population, new technologies and whatnot. But I would 
like to get just a general how are employers dealing with the 
costs and what alternatives are employers experimenting with to 
deal with the costs?
    Dr. Troy. Thank you, Congressman, for the question. We work 
primarily and study primarily large employers. And large 
employers are looking at significant alterations to their 
health care offerings. In response to the excise tax, they are 
reducing the value of their health care offerings so as to 
maintain--or remain under the thresholds so that they don't 
trigger the excise tax when it comes online in 2018.
    In terms of the overall cost to large employers, we found 
that the ACA has an impact of--marginal costs of about $5,000 
per employee over a 10-year period. And that is leading them to 
rethink what they are doing with health care, as well.
    So some of the--they are looking at a variety of 
alternatives. One, there has been some movement towards private 
exchanges. Although I think that has slowed down a little bit 
at this point. And I get the sense from employers that, first 
of all, they feel that there is a uncertainty out there in 
large part because of ACA delays and questions in the Supreme 
Court. So they are not sure what is going to happen.
    So I get the sense that employers are looking for something 
new. They are looking for some kind of future state but they 
have not yet decided on what that is going to be.
    Mr. Grothman. Okay. Now, correct me if I am wrong. When we 
look at the cost to the employer, we look only at his premiums, 
not at the cost to the employer; right? So we don't--in 
encouraging one type of plan or another, the way this 
Affordable Care Act was designed, it was only looking at it 
from the perspective of the employer, not the employee, right, 
as far as cost?
    Dr. Troy. Yes. And so we looked--that is why we did this 
study about the marginal costs of the ACA to large employers. 
These are costs over and above the traditional costs of health 
care that are imposed by the new law.
    Mr. Grothman. Right. So correct me if I am wrong. Under 
this plan, we are encouraging employers to put in things like 
big deductibles, which just may hammer their employees, 
particularly lower-paid employees. You know, a lot of the times 
these people who set up these plans are very, you know, wealthy 
in their own right. But, you know, you encourage, like, $5,000 
deductible, that sort of thing.
    Dr. Troy. Yes. We are definitely seeing employers move 
towards these high-deductible plans or towards more cost-
sharing, which does impose additional costs on the employees. 
And it raises questions of affordability of employer-sponsored 
care, as well.
    Mr. Grothman. Great. I am not familiar with all around the 
country. I know in my area what is going to happen is you have 
bigger deductibles, you are going to wind up having employees 
dig into their 401(k)s and that sort of thing. Is that 
something you are going to see around the country, do you 
think?
    Dr. Troy. Well, what we are finding is that there are 
already about 13-14 million people in employer-sponsored care 
who, if you look at the combination of deductibles and 
premiums, they are over the ACA's threshold of what is deemed 
to be affordability, which is 9.5 percent of income.
    Mr. Grothman. Okay. I give you one more question, a chance 
to respond. Earlier today we saw a couple of charts that were 
presented. You know, you have seen these things. And you 
haven't had a chance to respond them. And I thought while I had 
my five minutes, if I have any of my five minutes left, I would 
give you a chance to respond.
    Dr. Troy. Well, I appreciate that opportunity. There is a 
chart from Kaiser that shows that the increase in premiums has 
decreased over time. And it compares the 2001 to 2010 period 
and the 2011 to 2015 period. There are a couple of things.
    First of all, the costs are still rising for employers 
faster than the cost of goods and services, faster than 
productivity, and faster than GDP growth. So the costs are 
still rising faster.
    Second of all, CBO did an analysis that suggested that some 
of the abatement in cost increases in the past few years--and 
remember, the costs are still growing faster than inflation. 
But some of the abatement is due--a large part of it is due to 
the recession, and it could not all be attributed, or even 
mostly attributed, to the ACA.
    Chairman Roe. I now yield myself five minutes.
    Let me just clear a few things up about what is going on in 
the real world. And I could not agree more that we should have 
done this bill on a bipartisan basis. I was willing to do that. 
And the two major bills that I have worked on here that have 
been done on a bipartisan basis that got huge votes were one, 
the Veteran's Affairs bill, and two the SGR replacement we just 
passed.
    And that is one of the reasons you are seeing pushback, is 
that good ideas were left out of this. There are things in 
here, there is no question. You have all brought up things that 
needed to be addressed in health care in this country. It is 
one of the reasons I ran for Congress.
    And let me just bring you down to reality, what is 
happening out in the hospitals and the providers. I looked at 
it as an employer, which provided health insurance, just like 
all of you all have, and also as a provider. And what Mr. 
Grothman said is absolutely what is going on.
    In our local hospital system, which is over a billion 
dollar-a-year system, 70 percent of the payers they have are 
Medicaid or Medicare. That is only 30 percent from the private 
sector. And now, 60 percent of the uncollectible debt in our 
hospital system are people with insurance. And the reason is 
because if you put a $3,000 or $4,000 or $5,000 deductible for 
someone who makes $26,000 or $32,000 a year, it might as well 
be $100,000. They don't have the money. And that is happening 
today.
    And it is just because you have a health insurance plan 
doesn't mean you can get health care coverage. Now, because 
people are coming to doctors and saying to the doctors ask 
saying to the hospitals you just absorb this loss. And who is 
the winner here? I think the winner is the insurance companies. 
I think they turn out great.
    And I was the mayor of a local city before I came here; 
65,000 people. This reinsurance fee that nobody has even talked 
about, if you are a self-insured plan, cost our city, our 
taxpayers $180,000 of what we got absolutely zero for. Nothing, 
except maybe a higher tax bill for senior citizens on a fixed 
income with property taxes. We don't have an income tax in 
Tennessee. And this has cost hundreds of millions, if not 
billions of dollars, to self-insured plans.
    Let me tell you what we to do need to do in this, I think. 
I think we need to get rid of the mandates. We need to get rid 
of the ten essential health benefits. You all are business 
people can decide what plan you can afford and pay for.
    And I think, Mr. Brey, you would love the plan I wrote. I 
really think you would like it a lot for the Republican study 
committee. And you are going see it again in about two weeks if 
there is a replacement bill. And we are going to have a huge 
Supreme Court decision made in about the next 60 days, King v. 
Burwell, that will have a huge affect on this and a lot of 
citizens.
    Let me also say that I did a poor job as a Congressman of 
explaining preexisting conditions to people. If you have an 
ERISA plan right now, it doesn't affect you, you cannot be 
denied. If you have Medicaid, you cannot be denied. If you have 
Medicare, you cannot be denied.
    Truthfully--and this is where we needed to work on it--in 
the small group and individual market, you could be. And those 
folk were--and Mr. Brey pointed out--paid 18 percent more for 
no reason whatsoever than they couldn't group up and get 
bigger. I have been through the very same thing you have in 
paying my bills.
    What I want to know, Mr. Paal, or Ms. Roberts, you can 
answer this, or any of you. I still haven't been able to figure 
out in a smaller business that uses a lot of temporary 
employees how you figure out who you are going to have to 
provide coverage for, and then who gets the coverage. An FTE is 
not a person. That is not a human being with a policy. So how--
what do you do with that? How do you calculate? Maybe Mr. Paal, 
you should answer that.
    Mr. Paal. Well, in the past it was very simple. If you 
worked for us year round, then you were a full-timer, then you 
got the benefits. And this is part of where the--the 40 hours' 
worth of time that I spent calculating these things. I have 
people that work for me that will work 3 days a week for 2 
months, then they will work full time for a month and a half, 
and then they won't work for 3 months because they want to take 
time off in the summer when they are kids are off of school.
    What do I calculate that person as? Well, technically they 
are full time for a good portion they are there. I should offer 
them the coverage. In the past we always had offered them the 
coverage.
    I actually have two employees under our most recent renewal 
that did not qualify for health care coverage because of the--
one of them was only 8 hours shy of hitting to be a full-time 
employee out of an entire years' worth of service. So three 
more minutes a day or one more day of work over the entire 
year, they would have health care. Instead, their health care 
is terminating May 31st. That is where we really get into a 
pickle.
    Chairman Roe. So trying to figure out who those folks are 
is virtually impossible? To figure out who gets the policy.
    Mr. Paal. If I could forecast exactly what my sales were 
going to be, whether it was going to rain or shine or how many 
weddings we were going to have next fall, I could forecast it 
pretty well. But unfortunately, we can't.
    Chairman Roe. Trust me, I understand that.
    Well, I thank the--I want to thank the Subcommittee. You 
all have done a tremendous job. And I thank you for staying 
within the time. We have been fairly good at that on our end. I 
would like to thank you all for doing it. It has been great 
hearing. And once again, it is an important issue.
    And I would now to yield to Mr. Polis if he has any closing 
remarks.
    Mr. Polis. Thank you so much, Mr. Chairman. And I will be 
brief.
    With the lowest rate of increase in decades, with more 
health care choices for small businesses, with millions more 
Americans being covered by the Affordable Care Act, I think we 
know that it is working. And of course, we can do better, as 
well. Nobody is saying the Affordable Care Act is perfect. 
There are a number of suggestions that were submitted today, 
which I think both sides can work on, as well. And like any 
major piece of legislation, of course, I and many of my fellow 
Democrats are happy to work with my colleagues on both sides of 
the aisle to improve the Affordable Care Act, building on the 
progress that is already made to help American small businesses 
succeed.
    What we can't do is dismantle the reforms that have helped 
millions of Americans afford health care, helped tens of 
thousands of small businesses afford to cover their employees. 
From my meetings with small businesses from constituents 
regarding the Affordable Care Act, I have heard so many stories 
about how the coverage they have gotten has helped avoid 
illness, stay out of the hospital, how businesses have grown 
and prospered in my district.
    Quality preventive care helps ensure that people get 
healthier and happier, keeps them out of the hospital, allows 
them to continue to get a paycheck, be productive for their 
employers. Without a good doubt, it is a good thing for the 
economy.
    I implore members on both sides of the aisle to work 
together to improve the delivery of health care in this 
country. Work with us to improve the Affordable Care Act and 
strengthen the start we have made to shrink growing costs for 
employers, taxpayers, and families.
    We need to stop this sky-is-falling narrative. Since the 
Affordable Care Act was enacted, 12 million private sector jobs 
have been created. Let me repeat. Since the Affordable Care Act 
was implemented, 12 million private sector jobs have been 
created. That is indisputable. We need to stop the sky is 
falling narrative. We need to start narrative of how we can 
continue the road to help make our economy and the lives of 
Americans stronger and healthier.
    I yield back the balance of my time.
    Chairman Roe. I thank the gentleman for yielding. I again 
want to thank the Subcommittee for being here.
    And just in summary, I ran for Congress in 2008 to work 
on--one of the reasons was to work on health care. Having spent 
over three decades in the private sector, both in practice and 
medicine teaching in medical school, I realized we needed 
health care reform. Came to Washington, D.C. We got health care 
reform really by one party.
    And as was pointed out, this was not the House version of 
the bill. And in my opinion, the House version was the 
Affordable Care Act was a much better bill than what the Senate 
passed and was finally--through reconciliation, was passed on a 
one-party rule. And that is why you still have a majority of 
the people in this country who are opposed to this.
    And let me sort of--the thing that we did do with this, we 
took a small percent of the population, less than 20 percent. 
And that is what we were needing to deal with. And literally, 
we could have done three-fourths of what we did with the 
Affordable Care Act in two paragraphs. One was expand coverage 
to 26-year-olds and expand Medicaid. That is where the biggest 
expansion has been.
    Many of the people, including myself and every member of 
Congress who gets their health insurance through the D.C. 
exchange had health insurance before, perfectly good health 
insurance, but we lost it and we had to buy through the 
exchange. Which for me is up 75 percent. And many people had--
and I can pay that. It is not a problem for me. For other 
people, they can't pay that.
    So I think we are in a situation where we do need to reform 
it. The Supreme Court is going to make a huge decision in the 
next 60 days that will affect the law tremendously. I think we 
have seen increased costs in businesses. I know I have seen 
school systems in my own district that have reduced hours 
because they have fixed--municipalities have fixed budgets, and 
they only have so many dollars that are allocated each year by 
the local commissions to spend on health care and salaries and 
so forth. And they have had to make those decisions. So it is 
happening out there in the real world. People are making 
decisions now two and three and four years downstream.
    I have heard today from my colleagues on the other side of 
the aisle about the Cadillac tax. It needs to go. And I think 
you will get bipartisan support for that. I heard that, I 
think, almost universally here; that there was no support for 
that; that businesses were having a difficult time dealing with 
it. And it has been pointed out that unions, those contracts 
are being negotiated now for--for two, three, four years 
downstream. So we need to do something. Not wait until 2017, 
but do it now.
    I think the other thing is to not redefine the workweek in 
this country. That was a great distortion for American 
business, to define the workweek at 30 hours. It was 
unnecessary. And as all of you pointed out, if it is 
affordable, people do--business owners want to do the right 
thing. I certainly want to provide good health insurance 
coverage so people could get the care that I got for my family 
for their families. I didn't hear a single person, Republican 
or Democrat, out there dispute that. So I think that is a 
narrative we all agree on.
    Again, I want to thank you all. There is a lot of work to 
be done. And it may be a lot of work to be done in the next 60 
days. But thank you for your time, your indulgence. And this 
meeting is adjourned.
    [Additional submission by Dr. Roe follows:]
    
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    [Whereupon, at 12:06 p.m., the Subcommittee was adjourned.]