[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
EXPANDING AFFORDABLE HEALTH CARE
OPTIONS: EXAMINING THE DEPARTMENT
OF LABOR'S PROPOSED RULE ON
ASSOCIATION HEALTH PLANS
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON HEALTH,
EMPLOYMENT, LABOR, AND PENSIONS
COMMITTEE ON EDUCATION
AND THE WORKFORCE
U.S. House of Representatives
ONE HUNDRED FIFTEENTH CONGRESS
SECOND SESSION
__________
HEARING HELD IN WASHINGTON, DC, MARCH 20, 2018
__________
Serial No. 115-40
__________
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COMMITTEE ON EDUCATION AND THE WORKFORCE
VIRGINIA FOXX, North Carolina, Chairwoman
Joe Wilson, South Carolina Robert C. ``Bobby'' Scott,
Duncan Hunter, California Virginia
David P. Roe, Tennessee Ranking Member
Glenn ``GT'' Thompson, Pennsylvania Susan A. Davis, California
Tim Walberg, Michigan Raul M. Grijalva, Arizona
Brett Guthrie, Kentucky Joe Courtney, Connecticut
Todd Rokita, Indiana Marcia L. Fudge, Ohio
Lou Barletta, Pennsylvania Jared Polis, Colorado
Luke Messer, Indiana Gregorio Kilili Camacho Sablan,
Bradley Byrne, Alabama Northern Mariana Islands
David Brat, Virginia Frederica S. Wilson, Florida
Glenn Grothman, Wisconsin Suzanne Bonamici, Oregon
Elise Stefanik, New York Mark Takano, California
Rick W. Allen, Georgia Alma S. Adams, North Carolina
Jason Lewis, Minnesota Mark DeSaulnier, California
Francis Rooney, Florida Donald Norcross, New Jersey
Paul Mitchell, Michigan Lisa Blunt Rochester, Delaware
Tom Garrett, Jr., Virginia Raja Krishnamoorthi, Illinois
Lloyd K. Smucker, Pennsylvania Carol Shea-Porter, New Hampshire
A. Drew Ferguson, IV, Georgia Adriano Espaillat, New York
Ron Estes, Kansas
Karen Handel, Georgia
Brandon Renz, Staff Director
Denise Forte, Minority Staff Director
------
SUBCOMMITTEE ON HEALTH, EMPLOYMENT, LABOR, AND PENSIONS
TIM WALBERG, Michigan, Chairman
Joe Wilson, South Carolina Gregorio Kilili Camacho Sablan,
David P. Roe, Tennessee Northern Mariana Islands
Todd Rokita, Indiana Ranking Member
Lou Barletta, Pennsylvania Frederica S. Wilson, Florida
Rick W. Allen, Georgia Donald Norcross, New Jersey
Jason Lewis, Minnesota Lisa Blunt Rochester, Delaware
Francis Rooney, Florida Carol Shea-Porter, New Hampshire
Paul Mitchell, Michigan Adriano Espaillat, New York
Lloyd K. Smucker, Pennsylvania Joe Courtney, Connecticut
A. Drew Ferguson, IV, Georgia Marcia L. Fudge, Ohio
Ron Estes, Kansas Suzanne Bonamici, Oregon
C O N T E N T S
----------
Page
Hearing held on March 20, 2018................................... 1
Statement of Members:
Blunt Rochester, Hon. Lisa, a Representative in Congress from
the State of Delaware...................................... 3
Prepared statement of.................................... 5
Walberg, Hon. Tim, Chairman, Subcommittee on Health,
Employment, Labor, and Pensions............................ 1
Prepared statement of.................................... 3
Statement of Witnesses:
Arensmeyer, Mr. John, Founder and CEO, Small Business
Majority................................................... 42
Prepared statement of.................................... 44
Condeluci, Mr. Christopher E., Principal and Sole
Shareholder, CC Law & Policy, PLLC......................... 48
Prepared statement of.................................... 50
McGrew, Mr. Michael, CEO, McGrew Real Estate................. 16
Prepared statement of.................................... 18
Monson, Ms. Catherine, CEO, Fastsigns International, Inc..... 7
Prepared statement of.................................... 10
Additional Submissions:
Ms. Blunt Rochester:
Letter dated March 6, 2018, from National Association of
Insurance Commissioners, and The Center for Insurance
Policy and Research.................................... 95
Bonamici, Hon. Suzanne, a Representative in Congress from the
State of Oregon:
Letter dated March 6, 2018, from AARP.................... 99
Mr. Condeluci responses to questions submitted for the record 153
Espaillat, Hon. Adriano, a Representative in Congress from
the State of New York:
Letter dated March 6, 2018, from Attorneys General of New
York, Massachusetts, California, Connecticut, Delaware,
District of Columbia, Hawaii, Illinois, Iowa, Maine,
Maryland, New Jersey, New Mexico, Oregon, Pennsylvania,
Vermont, Virginia...................................... 103
Chairman Walberg:
Letter dated March 20, 2018, from the National Restaurant
Association............................................ 125
Letter dated March 23, 2018, from Members of Congress.... 128
Letter dated April 3, 2018, from the Multi-Association
Health Plan Coalition.................................. 130
Letter dated March 20, 2018, from the National
Association of Home Builders........................... 136
Questions submitted for the record....................... 151
Wilson, Hon. Frederica S., a Representative in Congress from
the State of Florida:
Letter dated March 6, 2018, from the American Cancer
Society Cancer Action Network.......................... 142
EXPANDING AFFORDABLE HEALTH CARE
OPTIONS: EXAMINING THE DEPARTMENT
OF LABOR'S PROPOSED RULE ON
ASSOCIATION HEALTH PLANS
----------
Tuesday, March 20, 2018
House of Representatives
Committee on Education and the Workforce,
Subcommittee on Health, Employment, Labor, and Pensions
Washington, D.C.
----------
The Subcommittee met, pursuant to call, at 10:03 a.m., in
Room 2175, Rayburn House Office Building. Hon. Tim Walberg
[chairman of the Subcommittee] presiding.
Present: Representatives Walberg, Wilson of South Carolina,
Roe, Lewis, Mitchell, Smucker, Estes, Wilson of Florida,
Norcross, Blunt Rochester, Espaillat, Courtney, and Bonamici.
Also Present: Representatives Foxx and Scott.
Staff Present: Courtney Butcher, Director of Member
Services and Coalitions; Michael Comer, Deputy Press Secretary;
Rob Green, Director of Workforce Policy; Nancy Locke, Chief
Clerk; John Martin, Workforce Policy Counsel; Kelley McNabb,
Communications Director; James Mullen, Director of Information
Technology; Alexis Murray, Professional Staff Member; Krisann
Pearce, General Counsel; Benjamin Ridder, Legislative
Assistant; Molly McLaughlin Salmi, Deputy Director of Workforce
Policy; Olivia Voslow, Legislative Assistant; Joseph Wheeler,
Professional Staff Member; Michael Woeste, Deputy Press
Secretary; Tylease Alli, Minority Clerk/Intern and Fellow
Coordinator; Mishawn Freeman, Minority Staff Assistant; Carolyn
Hughes, Minority Director Health Policy/Senior Labor Policy
Advisor; Richard Miller, Minority Labor Policy Director; Udochi
Onwubiko, Minority Labor Policy Counsel; and Veronique
Pluviose, Minority Staff Director; and Kimberly Toots, Minority
Labor Policy Fellow.
Chairman Walberg. A quorum being present, the Subcommittee
on Health, Employment, Labor, and Pensions will come to order.
Good morning, and welcome to today's Subcommittee hearing.
I'd like to thank our panel of witnesses and our members for
joining today's important discussion on the Department of
Labor's proposed rule on association health plans, or AHPs, and
how we can make affordable health care options a reality for
more working Americans.
The timing of this particular hearing is appropriate, as
this week marks eight years since the passage of the Affordable
Care Act. Since ObamaCare became the law of the land, America's
small businesses have struggled to dig themselves out from
under the law's crushing weight.
Since 2008, the share of small businesses with fewer than
10 employees offering health coverage has dropped by a shocking
36 percent, leaving working Americans with fewer health care
options or no coverage at all. It's estimated that 300,000
small business jobs have been eliminated because of the
Affordable Care Act, and 10,000 small businesses nationwide
have been forced to close their doors. The financial burden
this law has placed on Main Street businesses has been
debilitating, with its costs and mandates amounting to an
estimated $19 billion in lost wages for small business
employees.
Time and again, those of us on this Committee have heard
from small business owners that one of their greatest concerns
is the high cost of health insurance. America's job creators
deserve better than the failing status quo of limited coverage
options at sky-high prices. Instead, small businesses should be
empowered to negotiate for the very best coverage at the very
best prices on behalf of their employees, just as big
businesses and labor unions do.
In 2017, this committee favorably reported the House-passed
H.R. 1101, the Small Business Health Fairness Act, legislation
I introduced with our colleague, Representative Sam Johnson
from Texas, chairman of the Ways and Means Subcommittee on
Social Security. This legislation would expand health care
coverage and lower costs for workers by empowering small
businesses to band together through association health plans
and negotiate for lower costs on behalf of their employees.
By granting small businesses the ability to join together
through AHPs, small businesses would be able to strengthen
their bargaining power in the health insurance market in order
to secure health coverage options on par with that of larger
companies and unions.
In October of last year, President Trump issued an
executive order directing the Departments of Labor, Health, and
Human Services and the Treasury to use their regulatory
authority to expand access to AHPs. In response to the
President's directive, the Department of Labor proposed a rule
in January to broaden the criteria for determining whether
employers may join together in an employer group or association
in order to form an AHP.
Given the Committee's longstanding interest and activities
on AHPs, this recent action by Department of Labor presents an
opportunity to examine the Department's plan to expand small
business access to affordable health care options, and thereby
decrease the number of uninsured individuals.
Empowering small businesses to form AHPs is especially near
and dear to my heart, and I'm pleased to see such strong
progress on an issue that will directly benefit our nation's
job creators and their employees.
I look forward to hearing from our panel of witnesses and
from other members of the Subcommittee today as we examine this
proposed rule and work to do right by America's small
businesses.
I now yield to our ranking member today, Ms. Blunt
Rochester, for opening remarks.
[The statement of Chairman Walberg follows:]
Prepared Statement of Hon. Tim Walberg, Chairman, Subcommittee on
Health, Employment, Labor and Pensions
Good morning, and welcome to today's subcommittee hearing. I would
like to thank our panel of witnesses and our members for joining
today's important discussion on the Department of Labor's proposed rule
on association health plans, or AHPs, and how we can make affordable
health care options a reality for more working Americans.
The timing of this particular hearing is appropriate as this week
marks eight years since the passage of Obamacare. Since Obamacare
became the law of the land, America's small businesses have struggled
to dig themselves out from under the law's crushing weight.
Since 2008, the share of small businesses with fewer than 10
employees offering health coverage has dropped by a shocking 36
percent, leaving working Americans with fewer health care options or no
coverage at all. It is estimated that 300,000 small business jobs have
been eliminated because of Obamacare, and 10,000 small businesses
nationwide have been forced to close their doors. The financial burden
this law has placed on Main Street businesses has been debilitating,
with its costs and mandates amounting to an estimated $19 billion in
lost wages for small business employees.
Time and again, those of us on this Committee have heard from small
business owners that one of their greatest concerns is the high cost of
health insurance. America's job creators deserve better than the
failing status quo of limited coverage options at sky-high prices.
Instead, small businesses should be empowered to negotiate for the very
best coverage at the very best prices on behalf of their employees,
just as big businesses and labor unions do.
In 2017, this Committee favorably reported, and the House passed,
H.R. 1101, the Small Business Health Fairness Act, legislation I
introduced with our colleague Rep. Sam Johnson (R-TX), chairman of the
Ways and Means Subcommittee on Social Security. This legislation would
expand health care coverage and lower costs for workers by empowering
small businesses to band together through association health plans and
negotiate for lower costs on behalf of their employees.
By granting small businesses the ability to join together through
AHPs, small businesses would be able to strengthen their bargaining
power in the health insurance market in order to secure health coverage
options on par with that of larger companies and unions.
In October of last year, President Trump issued an executive order
directing the Departments of Labor, Health and Human Services, and the
Treasury to use their regulatory authority to expand access to AHPs. In
response to the President's directive, the Department of Labor proposed
a rule in January to broaden the criteria for determining when
employers may join together in an employer group or association in
order to form an AHP.
Given the Committee's longstanding interest and activity on AHPs,
this recent action by DOL presents an opportunity to examine the
Department's plan to expand small business access to affordable health
care options, and thereby decrease the number of uninsured individuals.
Empowering small businesses to form AHPs is especially near and dear to
my heart, and I am pleased to see such strong progress on an issue that
will directly benefit our nation's job creators and their employees.
I look forward to hearing from our panel of witnesses and from
other members of the subcommittee today as we examine this proposed
rule and work to do right by America's small businesses.
______
Ms. Blunt Rochester. Thank you, Chairman Walberg.
Today's hearing comes just days before the eighth
anniversary of the Affordable Care Act, or the ACA; legislation
that has helped 20 million people gain health coverage,
including 38,000 Delawareans, and also expanded protections to
millions more across the country who had preexisting
conditions.
Over the past year, we have seen continual efforts by the
administration and congressional Republicans to undermine that
progress, including one of many failed attempts to repeal the
law this last -- this past year. But with Congress' inability
to pass legislation to repeal and replace the ACA, the
administration has been unyielding in its attacks, refusing to
faithfully implement the law of the land.
The Department of Labor's proposed rule to expand
association health plans is another attempt to sabotage
Americans' access to comprehensive, affordable health coverage.
Under current law, health insurance coverage offered
through a group or association to individuals or small
employers is generally treated like individual or small group
coverage. This means businesses and individuals with health
insurance through associations have the same protections as
people in state-regulated, individual, and small group markets.
This includes coverage of essential health benefits, including
maternity care and substance abuse disorder treatment, and
prohibitions against being charged more based on gender.
Under current Department of Labor sub-regulatory guidance,
there are strict criteria under which employer association
health coverage is treated as a single large group ERISA-
covered plan, and thus exempt from adhering to these laws,
these rules. The use of this strict criteria in this way helps
protect against cherry picking only healthy consumers for the
sole purpose of providing health coverage that has nothing to
do with the actual employment.
The Department's proposed rule would weaken the criteria
for associations to be able to purchase insurance exempt from
certain federal consumer protections. Simply put, the rule
takes us backwards.
While the rule's proponents claim it will help small
businesses, in fact, this rule could limit access to
comprehensive coverage for many small businesses and their
workers, increase costs, and threaten access to those with
preexisting conditions. Troublingly, it also has the potential
to leave small businesses and their workers on the hook for
millions of unpaid medical bills.
First, this proposed rule would limit access to
comprehensive health coverage without guaranteed coverage for
essential health benefits, such as maternity care, mental
health treatment, and substance use treatment. This means
people may be left with skimpy and inadequate coverage that
neither gives them access to the care they need, nor offers
adequate financial protection against serious medical
conditions.
Second, the proposed rule will increase costs and threaten
coverage for people with preexisting conditions. As healthier
and lower cost consumers get cheap plans with skimpy benefits
that may not meet their health needs, older or sicker consumers
would be left behind in the traditional market with
skyrocketing costs, making it difficult to obtain coverage.
Third, the proposed rule could potentially leave small
businesses and their workers on the hook for millions of -- in
unpaid medical bills. As we have seen through testimony in
previous hearings on this topic, association health plans have
a long history of insolvencies, scams, and fraud. Between 2000
and 2002, scams impacted more than 200,000 people and left more
than $252 million in unpaid medical bills. As we all know,
those who do not learn from history are doomed to repeat it.
The Coalition Against Insurance Fraud stated that, under
the rule, quote, ``Small businesses and their workers will face
a huge and intolerable risk of fraud,'' end quote. It seems to
me that a commonsense approach to supporting small businesses
and helping them thrive would not and should include needlessly
exposing them to the insolvencies, scams, and fraud that could
force them to shudder their doors for good.
Taken together, this proposed rule would leave some with
cheaper coverage that fails to meet their basic health needs
and leave everyone else with higher costs. While the Department
of Labor is not represented on this panel today, the gaps in
the proposed rules' justification and analysis provided by the
Department are very troublesome.
Members of Congress and the general public would benefit
from an opportunity to hear from the Department. I will note
that members of this Committee have requested more information
from the Department on its analysis to no avail.
As pointed out in a comment letter submitted by 17 state
attorneys general, including Matt Denn, attorney general of my
home state of Delaware, the rule would reverse critical
consumer protections and unduly expand access to AHPs without
sufficient justification or consideration of the consequences.
Rather than continuing to campaign this campaign of
interference, I hope the administration and my colleagues will
join with Democrats to find ways to strengthen the ACA and
increase access to affordable comprehensive health coverage.
I thank the witnesses for joining us here today, and I
yield back.
[The statement of Ms. Blunt-Rochester follows:]
Prepared Statement of Hon. Lisa Blunt-Rochester, a Representative in
Congress from the State of Delaware
Today's hearing comes just days before the eighth anniversary of
the Affordable Care Act, or the ACA - legislation that has helped 20
million people gain health coverage, including 38,000 Delawareans, and
also expanded protections to millions more across the country who have
preexisting conditions.
Over the past year, we have also seen continual efforts by the
administration and Congressional Republicans to undermine that progress
- including one of many failed attempts to repeal the law this time
last year. But with Congress' inability to pass legislation to repeal
and replace the ACA, the administration has been unyielding in its
attacks - refusing to faithfully implement the law of the land.
The Department of Labor's proposed rule to expand association
health plans is yet another attempt to sabotage American's access to
comprehensive, affordable health coverage.
Under current law, health insurance coverage offered through a
group or association to individuals or small employers is generally
treated like individual or small group coverage. This means businesses
and individuals with health insurance through associations have the
same protections as people in state-regulated individual and small
group markets. This includes coverage of essential health benefits,
including maternity care and substance abuse disorder treatment, and
prohibitions against being charged more based on gender.
Under current Department of Labor sub-regulatory guidance, there
are strict criteria under which employer association health coverage is
treated as a single, large group ERISA-covered plan, and thus exempt
from adhering to these rules. The use of this strict criteria in this
way helps protect against cherry-picking only healthy consumers for the
sole purpose of providing health coverage that has nothing to do with
actual employment.
The Department's proposed rule would weaken the criteria for
associations to be able to purchase insurance exempt from certain
federal consumer protections. Simply put, this rule takes us backwards.
While the rule's proponents claim it will help small businesses, in
fact, this rule could limit access to comprehensive coverage for many
small businesses and their workers, increase costs, and threaten access
for those with pre-existing conditions. Troublingly, it also has the
potential to leave small businesses and their workers on the hook for
millions in unpaid medical bills.
First, this proposed rule would limit access to comprehensive
health coverage. Without guaranteed coverage for essential health
benefits, such as maternity care, mental health treatment, and
substance use treatment. This means people may be left with skimpy
and inadequate coverage that neither gives them access to the care they
need nor offers adequate financial protection against serious medical
conditions.
Second, the proposed rule will increase costs and threaten coverage
for people with pre-existing conditions. As healthier and lower cost
consumers get cheap plans with skimpy benefits that may not meet their
health needs, older or sicker consumers would be left behind in the
traditional market with skyrocketing costs, making it difficult to
obtain coverage.
Third, the proposed rule could potentially leave small businesses
and their workers on the hook for millions in unpaid medical bills. As
we have seen through testimony in previous hearings on this topic,
association health plans have a long history of insolvencies, scams,
and fraud. Between 2000 and 2002, scams impacted more than 200,000
people and left more than $252 million in unpaid medical bills. As we
all know, those who do not learn history are doomed to repeat it. The
Coalition Against Insurance Fraud stated that under the rule ``small
businesses and their workers will face a large and intolerable risk of
fraud.''1 It seems to me that a common sense approach to supporting
small businesses and helping them thrive would not and should not
include needlessly exposing them to the insolvencies, scams, and fraud
that could force them to shutter their doors for good.
Taken together, the Department of Labor's (DOL) proposed rule will
leave some with cheaper coverage that fails to meet their basic health
needs, and leave everyone else with higher costs.
The gaps in this rule's justification and analysis provided by the
Department are troubling. Members of Congress and the general public
would benefit from hearing directly from DOL, which is why Members of
this Committee have requested more information from the Department, to
no avail. I hope the Majority will join us in having an open and honest
discussion about the real effect this proposed rule will have on small
businesses and their employees.
As pointed out in a comment letter submitted by 17 state Attorneys
General, including Matt Denn, Attorney General of my home state of
Delaware, the rule would reverse critical consumer protections and
``unduly expand access to AHPs without sufficient justification or
consideration of the consequences.''2
Rather than continuing a campaign of interference, I hope the
administration and my Republican colleagues will join with Democrats to
find ways to strengthen the ACA and increase access to affordable,
comprehensive health coverage.
I thank the witnesses for joining us here today. I yield back.
1 https://www.dol.gov/sites/default/files/ebsa/laws-and-
regulations/rules-and-regulations/public-comments/1210-AB85/00041.pdf
2 https://www.dol.gov/sites/default/files/ebsa/laws-and-
regulations/rules-and-regulations/public-comments/1210-AB85/00669.pdf
______
Chairman Walberg. I thank the gentlelady.
Pursuant to Committee rule 7(c), all 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 such statements
and other extraneous material referenced during the hearing to
be submitted for the official hearing record.
It's now my pleasure to introduce our distinguished
witnesses. Ms. Catherine Monson is the CEO and president of
FASTSIGNS International, Incorporated, in Carrollton, Texas,
and is testifying on behalf of the International Franchise
Association. Mr. Michael McGrew is the CEO of McGrew Real
Estate in Lawrence, Kansas, and is testifying on behalf of the
National Association of Realtors. Mr. John Arensmeyer is
founder and CEO of the Small Business Majority, here in
Washington, D.C. Mr. Christopher Condeluc -- Condeluci --
forgive me for that -- is principal and sole shareholder of CC
Law & Policy PLLC, here in Washington, D.C.
I welcome each of you.
I'll now ask our witnesses to raise your right hand.
Do you solemnly swear to affirm that the testimony you are
about to give will be the truth, the whole truth, and nothing
but the truth?
Let the record reflect the witnesses answered all in the
affirmative.
Before I recognize you to provide your testimony, let me
briefly explain the lighting system. It's just like rules of
the road. Green, keep on going; when your five minutes hits
yellow, you have a minute to wrap up; and when it hits red,
please wrap up as quickly as you can. We will try to do the
same as members ask questions as well.
And so now, I welcome Ms. Monson, and recognize you for
your five minutes of testimony.
TESTIMONY OF CATHERINE MONSON, CEO, FASTSIGNS INTERNATIONAL,
INC., TESTIFYING ON BEHALF OF THE INTERNATIONAL FRANCHISE
ASSOCIATION
Ms. Monson. Thank you very much.
Chairwoman Foxx, it's great to see you again.
Chairman Walberg, great meeting you.
Ranking Member Blunt Rochester, thank you so much for your
kind words last week at the minority and franchising event. And
I hope you met FASTSIGNS franchisee Howard James at the event.
He was one of the speakers.
And members of the Committee, my name is Catherine Monson.
I'm here on behalf of FASTSIGNS International, our 604
FASTSIGNS franchisees in the U.S., with others in other
countries, and another 37 franchisees in the U.S. about to open
their businesses.
I'm here also with the International Franchise Association.
I'm the second vice-chair of that association, and we represent
over 733,000 franchise businesses employing 7.6 million
employees in the U.S. today.
I have made my career in franchising. I love franchising.
I've seen it build wealth for families, create jobs and
opportunities. It is an amazing ladder of opportunities for
women, minorities, and immigrants. And our recent IFA minority
study shows a 50 percent increase in minority ownership of
franchises since 2007, up to 30.6 percent, something we're
very, very proud about.
For each of you, there are about 2,000 franchise businesses
in each of your districts, and franchising is perfectly built
for association health plans. We use economies of scale to help
businesses deliver affordable products and services.
I guarantee you the Dunkin' Donuts franchisee in your
district pays less for flour and eggs and coffee than an
independent donut business does, and the FASTSIGNS in your
district pays less for printers and inks and substrates. And we
want to bring that same negotiating power and economies of
scale to association health plans.
Small business health plans are great. If I talk about
FASTSIGNS franchisees, the average has five to seven employees.
In that very difficult 10 or fewer employees small business
health care market where they have no negotiating power, they
can go to Blue Cross Blue Shield and ask for better rates, and
at 10 employees or less, they don't get it. They come back to
their employees. Their employees can't afford their part of it.
Some employees are on their spouses' or parents' plan. It's
very, very challenging.
IFA recently surveyed its franchisee members, and 65
percent do not provide health care coverage. 92 percent of that
group do not provide it because they just can't handle the cost
burden. But, 100 percent would look for health coverage and
provide it if they could get it through an association health
plan.
The IFA strongly supports the administration's rule. We
know we can pull resources. And here's the key: It's getting
quality health care. It is not about skinny plans. My
franchisees and other franchisees want to have the best labor
available. They want to have the best employees. It's about
competing with large companies for the best employees. Skinny
plans are not going to be considered at all.
Under the proposed rule, businesses can band together
either by commonality of interest or commonality of region, and
the broader the definition of commonality of interests, the
better -- the larger the pool, the lower the prices, the better
quality full coverage health care.
Franchises know how to do this. We know how to pull
resources. We know how to negotiate with vendors bringing
across -- if we will, think about the International Franchise
Association. 7.6 million employees could be covered by quality
affordable health care. It's all about a level playing field.
We want the same exemptions to be able to buy large group
health insurance coverage as the labor unions have, as large
companies have.
The IFA is urging the Department to look at franchising as
a commonality of interest too, and the Federal Trade Commission
definition and state laws provide for great guidelines here.
We've also urged the Department of Labor to include a joint
employer safe harbor, and this is really, really critical for
franchising to get involved and to really get the maximum
benefit out of association health plans. We support the
adoption of safe harbor in the final rule so that we would not
be deemed to joint employers just because there was an
association health plan.
Without the safe harbor, we feel it's very unlikely that
the benefits of this important health care policy will really
take hold. And we're really thankful for the bipartisan
coalition of members of Congress, including Chairman Walberg,
who've echoed our request.
In closing, I want to say thank you very much for having me
here. The International Franchise Association and FASTSIGNS
strongly support the administration's rule and urge swift
implementation. Franchising can and will be a willing partner
in the effort to expand access to affordable quality health
care -- that's the key. It's not skinny plans -- bringing more
options to our very important working families.
Thank you so much.
[The statement of Ms. Monson follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman Walberg. Thank you.
I recognize Mr. McGrew for your five minutes of testimony.
TESTIMONY OF MICHAEL MCGREW, CEO, MCGREW REAL ESTATE,
TESTIFYING ON BEHALF OF THE NATIONAL ASSOCIATION OF REALTORS
Mr. McGrew. Good morning, Chairman Walberg, Ranking Member
Blunt Rochester, and members of the Subcommittee. Thank you for
holding this hearing today and the opportunity to testify on
behalf of the National Association of Realtors' 1.3 million
members.
My name is Mike McGrew. I'm a third-generation realtor and
CEO of McGrew Real Estate, an independent real estate brokerage
with 70 independent realtors and 14 salaried employees in
Lawrence, Kansas.
I'm the immediate past treasurer of the National
Association of Realtors and a member of the executive
committee, which establishes NAR's governing policies and
oversees NAR's member benefits program.
As a practicing realtor since 1982, I know firsthand how
hard it is to find and keep health insurance when you're a sole
proprietor and you have no employer coverage. I also know how
hard it is to find affordable health coverage for your
employees when you're the boss.
The challenges facing the nation's small business and
independent contractor community when searching for affordable
health insurance continues to grow each year as costs rise and
options diminish.
The Department of Labor's proposed rulemaking seeks to make
it possible for the self-employed and small employers to
purchase health insurance through a trade association. Access
to more health insurance options is key for realtors, a group
that now purchases coverage primarily in the struggling
individual markets.
To understand the insurance challenges we face, it's
important to know a bit about the structure of our industry. My
company is a good example of a typical independent real estate
firm. All of our agents are independent contractors. They have
broad freedom to build their business as they choose under our
state-mandated legal supervision responsibilities, and they
value that independence. They have no limits on what they can
earn, but they have no guaranteed paycheck. They wake up every
morning unemployed and have to hunt for their next deal.
While we provide health insurance to our salaried support
staff, we do not provide health insurance to our independent
agents. When real estate agents and brokers forego health
insurance, the primary reason cited is cost, and it's this
experience that has driven NAR to seek additional health
insurance options for our membership.
NAR has long supported legislation that would allow trade
associations to create association health plans, including
Chairman Walberg's Small Business Health Fairness Act. NAR also
supports the Department of Labor's proposal that will provide
more small businesses, as well as independent contractors, with
access to an association health plan.
It is essential that any final rule makes self-employed
individuals with no employees or working owners eligible to
participate in an AHP. It is also important to note that, under
the rule, association health plans would still be subject to
consumer protections under the ACA, ERISA, and state benefit
mandates. In fact, it would not be in NAR's interest to offer a
benefit program that is not a quality product because it would
fail to attract members, and our demographics are much older in
NAR.
Additionally, since our surveys indicate that realtors' top
priorities are affordability and access to preferred doctors,
any association plan must achieve those goals as well.
The Association has questions about the rule, as it remains
unclear how state regulation would impact association plans,
especially those of national groups, like NAR, whose members
can be found in all 50 states.
If an AHP cannot overcome barriers that states might
implement to prohibit it from being classified as a large group
plan, NAR may not be able to provide a nationwide plan for its
members who are asking for more insurance options.
It is essential that the final rule clarify that while
states may continue to regulate association health plans as
they do now, they may not use existing authorities to undermine
the final rule.
NAR also believes that the Department should reconsider
eligibility criteria to be considered a working owner,
especially the disqualification of those who have an offer of a
subsidized coverage from a spouse's employer.
The rule's current restrictions could drastically limit the
potential pool of members that may be eligible for an NAR
health plan. More importantly, this restriction could bar these
individuals from an association plan that could provide better
or more affordable coverages.
To close, reducing the cost of health insurance while
maintaining quality coverage is a top priority for NAR, a
priority that is shared by the growing number of small
businesses and self-employed Americans who are part of every
sector of our economy.
NAR is encouraged by the administration's focus on making
improvements in this area and the Committee's attention to the
health insurance challenges that face self-employed real estate
professionals across the country.
Thank you again for this opportunity to represent the
realtors' health care concerns.
[The statement of Mr. McGrew follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman Walberg. Thank you.
Now I recognize Mr. Arensmeyer for your five minutes of
testimony.
TESTIMONY OF JOHN ARENSMEYER, FOUNDER AND CEO, SMALL BUSINESS
MAJORITY
Mr. Arensmeyer. Good morning, Chairman Walberg, Ranking
Member Blunt Rochester, members of the Subcommittee. I'm the
founder and CEO of Small Business Majority. Our mission is to
empower America's 28 million entrepreneurs to build a thriving
and inclusive economy. Working from nine offices across the
country, we work closely with more than our network of 55,000
small business owners and over 1,000 local business
organizations.
Over the past six years, the ACA has provided health care
to more than 20 million individuals who otherwise couldn't
access coverage, millions of whom work for small employers or
are themselves business owners or self-employed individuals.
Equally important, the small group market has seen rates
stabilized under the ACA, with an average cost increase of 5.2
percent, down from a rate of more than 10 percent prior to the
ACA.
It should come as no surprise that scientific polling we
conducted last year found that six in 10 small business owners
favor retaining and strengthening the ACA. That's why we're so
concerned about the proposed changes in the Department of
Labor's rules governing AHPs.
In order for small businesses to receive affordable
coverage, the small group market's risk pool must be robust and
well balanced. The proposed rule would allow associations to
operate as a single large employer, thus creating separate risk
pools for different types of small businesses, particularly
when it comes to things like essential health benefits, age
rating, actuarial value, adjusted community rating, the single-
risk pool requirement, and risk adjustment.
While this might mean that some small businesses with
younger, healthier employees can purchase cheaper plans, the
remaining risk pool becomes unbalanced, causing rates to soar
for everybody else.
What's more, the proposed rule suggests that current
protections against discriminatory marketing practices would
not apply to AHPs, which would allow these plans to discourage
enrollment from companies with employees that have expensive or
complicated health issues.
Under this proposed rule, AHPs would also offer fewer
consumer safeguards. It's concerning that the proposed rule is
ambiguous about whether it will block states' abilities to
regulate AHPs. It's unacceptable to prevent state insurance
commissioners from enforcing rules they deem to be in the best
interest of their state's small businesses and consumers.
Small business owners may turn to AHPs in search of lower-
cost options. But without protections in place to prevent
fraud, they can find themselves the victims of scams, on the
hook for costly medical expenses for issues they thought their
plan covered. As Adam Rochon, the owner of a small independent
insurance agency says, ``The bottom line is AHPs are only good
as long as you don't get sick.''
Importantly, AHPs are not a new idea. In fact, states have
already experimented with these plans with disastrous results.
An Urban Institute analysis of Oregon's regulations of AHPs
prior to the ACA found that policies and lack of regulatory
oversight increased the potential for adverse selection in the
remaining small group market in the state.
This issue, as well as the concerns outlined above
regarding fraud and abuse, is why a coalition of 17 attorneys
general recently submitted comments to the Labor Department
opposing the proposed rule. As noted in their comments, the
proposed rule undermines the intent and structure of the ACA
and is also contrary to the Labor Department's longstanding
interpretation of ERISA, which, among other things, requires
that large groups have a, quote, ``common economic or
representational interest,'' close quote, unrelated to the
provision of benefits.
Finally, much has been made of the proposed rule's
inclusion of independent contractors or so-called working
owners. This is a group that has dramatically benefited from
the ACA's individual market, with as many as one-third of
participants in California's exchange being sole proprietors.
As such, enacting this rule would significantly weaken the
individual markets.
Rather than pursuing policies to undermine the ACA, we
encourage lawmakers to advance legislation that would stabilize
health care marketplaces and protect the robustness of covered
options for small business owners, employees, and independent
business owners.
Legislations like the bill that was recently introduced by
the ranking members of the Energy and Commerce, Ways and Means,
and Education and Workforce Committees would be an important
step in lowering premiums and stabilizing markets.
Thank you. And I look forward to answering your questions.
[The statement of Mr. Arensmeyer follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mrs. Foxx. [Presiding.] Thank you very much.
Mr. Condeluci, you're recognized for five minutes.
TESTIMONY OF CHRISTOPHER E. CONDELUCI, PRINCIPAL AND SOLE
SHAREHOLDER, CC LAW & POLICY, PLLC
Mr. Condeluci. Thank you, Chairwoman, Ranking Member Blunt
Rochester, and members of the Subcommittee, for this
opportunity. My name is Chris Condeluci, the sole shareholder
of CC Law & Policy, a legal and policy practice that focuses on
issues relating to the Affordable Care Act. I am also an ERISA
attorney by training.
I want to start today by saying association health plans,
or AHPs, are not the same as short-term health plans. For
months now, critics of AHPs have publicly stated that similar
to short-term health plans, AHPs can deny a person coverage if
they have a preexisting condition, can refuse to cover
preventive services, and can impose annual lifetime limits. I
want to say unequivocally and emphatically that these
statements are incorrect.
AHPs as a group health plan under the law are subject to
the ACA's coverage requirements, meaning they cannot deny a
person health coverage if they have a preexisting condition,
cannot refuse to provide free coverage for certain preventive
services, and cannot impose annual lifetime limits on the
federal essential health benefits covered under the plan. Other
notable ACA requirements like coverage for adult children up to
age 26, free access to emergency care, and the prohibition
against rescinding coverage absent fraud all apply.
ERISA's notice and disclosure requirements, fiduciary
responsibilities, and health plan procedures all apply to AHPs.
COBRA continuation coverage applies, and HIPAA prohibits an AHP
from developing premiums based on a particular participant's
health status. State benefit mandates to -- state benefit
mandates apply to fully insured AHPs, and state solvency
requirements will apply to self-insured AHPs.
So now that we've established that AHPs are subject to
existing law that requires the provision of comprehensive
coverage, I will turn to the Department of Labor's proposed
regulations.
The proposed rules would allow employers in the same
industry to offer AHP coverage to their members nationwide or
on a regional basis. Currently, these related employers can
only offer AHP coverage within a particular state. This
proposed change is critical for national trade associations,
franchisees, and companies with cooperative members.
The proposed regulations would also allow employers in
different industries but located in the same state or
metropolitan area to form an AHP. This change is critical for
local chambers of commerce and other employer-run organizations
made up of multiple unrelated employers.
Prior to 2011, many of these organizations offered AHP
coverage, but were forced to discontinue their plan due to
guidance issued by the Obama administration. The proposed
regulations would also allow self-employed individuals with no
employees, referred to as working owners, to get health
coverage through an AHP. This change is critical because
working owners have limited options when it comes to accessing
health insurance. Some may be able to access coverage through
their spouse, but in cases where family coverage is
unaffordable or a working owner is not married, the option --
the only option is the ACA's individual market, which has
proven problematic for those not eligible for a premium
subsidy.
Lastly, the Department of Labor should issue a class
exemption that would exempt self-insured AHPs from the
nonsolvency requirements of state MEWA laws. A class exemption
is advisable because there's a patchwork set of state laws with
different rules and licensing requirements. And the lack of
uniformity in the law will likely limit the formation of self-
insured AHPs.
As a former Republican counsel to the Senate Finance
Committee who had the opportunity to draft portions of the ACA,
I wish the ACA worked better. I wish the individual and small
group markets would have evolved into balanced markets where
comprehensive coverage is available. But the reality is that
did not happen, and the reality is the status quo is not
working for many Americans.
One way to improve the status quo is by coming up with
alternatives to the ACA that will continue to provide
comprehensive coverage at a lower cost. And that is exactly
what the AHP proposal is. It is an alternative that is going to
help millions of employers to offer health coverage to attract
and retain talented workers. It is an alternative that is going
to help a large number of national trade associations,
franchisees, and cooperative-run companies to provide
additional benefits to their members and attract new members.
And it is an alternative that's going to help working owners
who have been struggling to afford health coverage in the ACA's
unsubsidized individual market. This alternative will cost less
than individual and small group plans, but the coverage will
continue to be comprehensive as required under the ACA, ERISA,
HIPAA, COBRA, and state law.
Thank you for your time. I look forward to answering any
questions you may have.
[The statement of Mr. Condeluci follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
[10:34 a.m.]
Mrs. Foxx. Thank you very much. And, again, I want to thank
all of our witnesses for being here today.
Mr. Condeluci, I will come back to you in a minute, but I
do want to thank you very much for setting the record straight
in your testimony. I think that is extraordinarily important.
Ms. Monson, in your testimony you mentioned that because
AHPs have a larger pool of enrollees they can more effectively
balance the risk associated with providing health insurance
coverage to their employees. For many small businesses, if an
employee gets sick the individual company or franchise may have
to bear the increased costs in premiums alone. Do AHPs provide
more financial stability for small business faced with higher
claims?
Ms. Monson. Absolutely. AHPs will provide financial
stability to small business owners. The biggest complaint of
all small business owners is the cost of providing quality
health insurance to their employees. Many can't afford to. With
AHPs bringing down the cost because of the greater pool and
lower administrative costs, it will definitely help financially
those small business owners. And it really all comes down to
competition for great employees. Nobody wants to hire bad
employees, but to keep the best employees you've got to have
great benefits. And too many small employers can't afford to
have the same similar quality insurance that labor unions and
large companies do. AHPs will solve that.
Mrs. Foxx. Thank you very much. Mr. Condeluci, we have
heard from a number of small business and employer groups that
small group market costs continue to increase and the number of
small employers offering health insurance, especially for very
small businesses, continues to decrease.
How is small group market size currently defined in the
states? Is there significant difference in cost or offer rates
between groups that are fewer than five or 10 and those that
are over 50 or 100?
Mr. Condeluci. Thank you for the question, Chairwoman.
First, the states typically define the small group market as an
employer employing at least two and up to 50 employees. As you
may recall, the ACA actually changed that definition and moved
that up to 100, but that change in the law from the ACA was
changed by Congress back to 50. So it is two to 50 is the
definition.
To your question with regard to the cost as it's--let's say
the price for groups that are smaller in size versus those that
are 51 and above, the ACA, as many know, reformed the small
group market, or enacted reforms to the small group market, and
in particular, the adjusted community rating rules, the single
risk pool requirement, essential health benefits, and actuary
value all apply to small group market plans. So typically the
prices are not that different between the various groups
because even if you're a small group of five, relative to a
small group of 45 still in a small group market, the prices are
typically going to be the same.
When you look at the large group market, which is 51 and
above, often times the cost in the large group market is lower.
There are administrative efficiencies in the large group market
that is not present in the small group market. Or stated
differently, the small group market has a lot of volatility. A
lot of small employers dropping out of the market, in and out
of the market, there's underwriting issues. And that just
drives up administrative cost. And that volatility is not quite
present in the large group market, and therefore large group
often times has a lower cost associated with it.
So those are just some factors between the differences
between small group and large group market plans.
Mrs. Foxx. Thank you very much. Mr. McGrew, as you know
firsthand, health care costs are just one of the many budget
line items that small business owners have to balance while
running their companies. Operating costs, payroll, maintenance,
marketing, and many other duties compete for limited time and
resources. Can you describe the other costs your business
incurs and how health care costs factor into strategic
decisions, including hiring and expansion?
Mr. McGrew. Thank you, Madam Chairwoman. There is no
question that when you're a small business owner you wear a lot
of hats and we don't have an extensive HR department in our
company. Therefore, we rely a lot on outside advisors. We have
to count on them for their expertise, and those are costs
associated with having them help advise us with regard to these
things.
If I could spend more time helping my agents create more
opportunities and help more consumers, my time is better spent
than spending it on regulations and searching for health care
options.
In the state of Kansas, there are two health care insurance
plans available in the whole state. We don't have a lot of
choices. And so we spend a lot of time trying to figure out if
there's a better way to do things. Unfortunately, that's
spinning our wheels because we really at this point have only
very limited choices.
Thank you.
Mrs. Foxx. Thank you very much. And, again, thanks to all
of you. Mr. Scott, you are recognized for five minutes.
Mr. Scott. Thank you. Mr. Arensmeyer, do the AHPs reduce
the overall cost of health insurance for everybody, or just
move it around so that different people pay different rates?
Mr. Arensmeyer. They do not decrease the overall costs. The
cost factors in the health insurance market are governed by
many underlying issues. And you're right, they just move it
around.
Mr. Scott. Okay. So if you allow healthy people to form
their own AHPs what happens to everybody else?
Mr. Arensmeyer. Everybody else gets left in a group that's
forced to raise prices, and most people are going to have their
prices go up.
Mr. Scott. And what happens to stability if healthy people
start forming their own associations?
Mr. Arensmeyer. Well, stability of the market decreases.
Congress decided we've got three basic groups, risk groups.
You've got large groups, small groups, and individual and each
one of those needs to be as robust as possible. If you start to
weaken any one of them you weaken the whole system.
Mr. Scott. Now, if you form an AHP and people in your
program start getting sick what can they do?
Mr. Arensmeyer. If they're in an AHP? If they start getting
sick and the AHP starts to incur losses, the AHP could go away.
Unlike a large group, which is there because everyone's got a
common economic interest, you know, in a big company. You know
this is a group that's just set up for health insurance
purposes only and it could just disintegrate.
Mr. Scott. That means they can go back into the normal
individual or small market pool?
Mr. Arensmeyer. They would ultimately have to back into it,
yes. But you're talking about destabilizing a market in the
process.
Mr. Scott. Now, what is the history of insolvency in AHPs?
Mr. Arensmeyer. There's been a tremendous history of
insolvency. And as I said, again, if you set up an entity for
the sole purpose of providing health coverage you don't have
the foundation that you have in the large group market with a
large company that's there for many reasons beyond health
insurance. So once something starts to go wrong, there's
absolutely no incentive for people to stay in the system.
Mr. Scott. So if the cost go up because a few people got
sick, everybody will start bailing? Is that right?
Mr. Arensmeyer. That's right.
Mr. Scott. Is it possible to design a benefit package that
attracts healthy people rather than average people?
Mr. Arensmeyer. Absolutely. I mean if you don't have the
same rules regarding essential health benefits you create
different rules of the road. The reason that--and I should add,
as I said in my testimony, the small group market, unlike some
of what you've heard, has actually been relatively stable. In
fact, between three and 199 employees it has only gone up one
percent in the last year. So that's how you have a stable
market is you have as much risk spread out as possible.
Mr. Scott. But if you had designed a program that you did
not have services for diabetes, did not have chemotherapy, you
did not have AIDS medicine on your formulary, you would
discourage people with those diseases from joining the pool. Is
that right?
Mr. Arensmeyer. That's correct.
Mr. Scott. And you would have a healthier pool as long as
they stayed healthy, and everybody would be happy until
somebody got sick?
Mr. Arensmeyer. That's correct.
Mr. Scott. Can you give some examples of what happened--you
mentioned fraud. What happened? Can you mention what happens
when people get defrauded in this situation?
Mr. Arensmeyer. Well, if they think they're signing up for
comprehensive health benefits and then all the sudden the AHP
weakness, then they are out of luck.
Mr. Scott. What happens when the AHP goes insolvent?
Mr. Arensmeyer. The people don't have coverage anymore.
Mr. Scott. We have heard that nobody is going to really
sell these skimpy plans because nobody would want to buy it.
Doesn't a skimpy plan have the advantage of a very low price?
Mr. Arensmeyer. Absolutely. I mean it becomes very
attractive on the surface and all of the sudden you find out
it's not covering what you need it to cover.
Mr. Scott. And so the whole point of this is to lower the
prices. And if you can get a low price then people would be
attracted to it until they get an illness that is not covered.
Nowhere they have done these, has the cost of the residual
market, those that didn't get into an AHP, have you seen the
cost go up for everybody else?
Mr. Arensmeyer. Absolutely. I mean the cost increases in
the small group market prior to the ACA, particularly when you
had AHPs in the system, were much higher. I mean the growth was
higher, the rate of increase was higher.
Mr. Scott. Is there any problem with discriminating based
on gender or designing a pool that has traditional male
employees?
Mr. Arensmeyer. You can certainly design a pool, design a
set of benefits to intentionally exclude, or at least
implicitly exclude certain people by not having maternity
coverage, not having coverage for things that people who are
older tend to get. Again, it's about having separate rules of
the road than the small group market. The whole point of the
small group market, as we just heard from Mr. Condeluci, it's
actually you get pretty common costs across the entire small
group market because you have a common set of rules and a
common risk pool.
Mr. Scott. Thank you, Mr. Chairman.
Chairman Walberg. I thank the gentleman and, again, thank
you for the panel for being here. I apologize for having to
leave to go to two other subcommittee hearings that are going
on at the same time for me.
Mr. Condeluci, there has been a lot of discussion about
whether AHPs will provide adequate consumer protections to
their members. Some fear that expanding AHPs will lead to
discrimination against employees who are older, sicker, or more
expensive than other workers. That has been brought out this
morning already.
Can you discuss which nondiscrimination requirements apply
to AHPs and how those compare to requirements applicable to
existing plans in the large group market?
Mr. Condeluci. Thank you for the question. In the
Department of Labor's proposed regulations, there's a
nondiscrimination protection that says that members seeking to
join an employer group, or a group that is going to sponsor an
AHP, cannot deny membership based on the health status of that
employer member's employees. So there is a nondiscrimination
protection when it comes to membership in the employer group,
which almost by extension is a nondiscrimination protection as
it relates to participation in the AHP.
When it comes to the AHP there are current law
nondiscrimination protections, as I discussed, and they're
built into the proposed regulations, which say that an AHP
cannot vary premiums based on a particular participant's health
condition, nor can they vary eligibility for benefits based on
a particular employee's or a particular participant's health
condition. So those are current law, nondiscrimination
protections that again are built into the proposed regulations.
Chairman Walberg. Okay. And group market plans are required
to cover preexisting conditions as well?
Mr. Condeluci. Yes, sir. Large group plans, self-insured
plans, as well as small group plans and individual market plans
are subject to the ACA coverage requirements. And those ACA
coverage requirements, which apply to all plans in all of those
markets, have a prohibition against denying someone coverage
based on a health condition or discriminating against a
particular participant based on the health condition of that
individual.
Chairman Walberg. Okay, great. Thank you. Ms. Monson, you
briefly talked about the cost of providing health insurance to
your employees, as well as the challenges that franchised
businesses can face when obtaining health insurance coverage.
How does the ability to offer great health insurance coverage
affect your franchisees' ability to attract and retain talent?
And what impact do you think that offering an AHP would have?
Ms. Monson. Thank you for the question. Every business
requires the best employees to be the most successful that they
can be. And small employers have really struggled, franchise
businesses with small staffs have really struggled to find that
same level of quality care, quality health insurance, at a
reasonable price. My franchisees, every day, compete for the
same employee candidates as large corporations do.
Chairman Walberg. So competition is real?
Ms. Monson. Competition is real for great employees. And we
need to help those small business owners and those franchise
business owners have access to quality, affordable health
insurance--AHPs will bring that--so that they can have a level
playing field when competing for the best employees, hiring the
best employees, and keeping the best employees.
Chairman Walberg. Okay. Thank you. Mr. McGrew, cost is a
significant concern for small employers who want to offer
health insurance. Do you believe that AHPs can offer the
independent contractors you work with more affordable health
plans and they can find it and purchase it today?
Mr. McGrew. Thank you, Mr. Chairman. Absolutely. I am very
confident, in my case, that the National Association of
Realtors would be able to provide an option for my independent
contractor realtor family members. There are so few choices
when you're in the individual market that are good choices. And
to have another option from a valued trusted business partner,
as the National Association of Realtors is, would I think be a
very valuable and viable option for my realtor family.
Chairman Walberg. Okay. Mr. Condeluci--excuse me, Ms.
Monson. I want go to back to her. Can you describe how an AHP
would help small employers manage the administrative costs of
their plan?
Ms. Monson. If I take a look at the International Franchise
Association representing, you know, 733,000 franchise
businesses, with the stability of great coverage and an
affordable price, there's not going to be the small businesses
joining and leaving all the time. That reduces the
administrative cost. There's a certain administrative cost that
goes over one company, no matter if it's small or if it's very,
very large. And so then we can spread the administrative costs
over millions of employees or thousands of employees or
hundreds of employees, rather than just 10 or 15 or 20.
Chairman Walberg. Thank you. I see my time has expired.
Thank you.
I recognize Ms. Blunt Rochester for her five minutes of
questioning.
Ms. Blunt Rochester. Thank you, Mr. Chairman. And, again,
thank you to the panel. You know, as I listened to the
conversation one of the things that becomes clear to me is that
we all value affordable, quality health care and access to it.
I think one of the concerns, and one of the reasons why my
focus has been on strengthening the Affordable Care Act is
because to me this is kind of going backwards. It is saying we
are piecemeal as a country instead of all in this together.
So I start with that premise and I thank the panel for your
testimony.
Mr. Condeluci, I will probably ask you some questions later
based on the new testimony, so I will come back to you with
some of that later. But I would like to ask a question,
starting with the fact that the Affordable Care Act, what was
really powerful about it was that it afforded protections to
older consumers, particularly as more people are living longer
and staying longer in the workforce. And I worry that older
business owners and older workers who could be left with fewer
options or even more expensive coverage under this rule. AARP
states in a comment letter that the rule could ``greatly
increase the likelihood that working Americans, especially
those age 50-64, would face higher insurance premiums and the
loss of access to critical health insurance coverage''.
Mr. Arensmeyer, are you concerned about the impact that the
rule could have on older workers?
Mr. Arensmeyer. Absolutely. I mean if you just look at the
large group market now, the age banding between the most
expensive for older workers and the least expensive is five to
one, whereas in the small group markets, as you know, it's
three to one. So you're automatically talking about a situation
where you would have relatively higher prices for older people,
which would then create problems for small businesses with
older workforces.
Ms. Blunt Rochester. And another thing that concerns me
about the rule is that it could discourage businesses with
employees who have preexisting conditions and health issues, or
even people with disabilities, from enrolling in association
health plans. For example, right now small group plans must
cover rehabilitative services, but under the rule this
requirement would not apply.
In your position, would a plan without that coverage be
attractive to, for example, a small business owner with a
physical disability?
Mr. Arensmeyer. No, it wouldn't. And, again, it gets back
to the fact that you've got different rules of the road. We've
heard a lot about the fact there would still be certain
prohibitions against overt discrimination, but that doesn't
stop you from setting up a plan that has different benefits
than the essential health benefits required in the small group
market, and thereby discouraging people who might be higher
health risks from joining that plan.
Ms. Blunt Rochester. Right. And my last question, earlier
this week the President announced his plan to combat the opioid
crisis. And while I don't think we are going to debate the plan
here, I will mention that I think it is really encouraging that
the President and Congress are having this important
conversation and actually having it in a bipartisan way. But I
am a little nervous about the rule and that impact on
association health plans to avoid covering needed services for
substance use disorder. Entirely counterproductive to what we
are saying that we are trying to do with stemming the opioid
crisis.
Would you comment on the importance of substance use
disorder treatment and why maintaining coverage for essential
health benefits is important?
Mr. Arensmeyer. Again, it gets back to the fact that you
have different rules for different risk pools here. And there's
no question you could again design plans that had less coverage
for drug abuse treatment and you'd then be skewing the market
accordingly. So, again, I'm going to stress that in the large
group market, where you have common economic interest in a
company, there's an interest in covering everybody, you know,
with the best benefits as you can in that company. When you set
up a plan that--or an organization or association is purely for
the purpose of providing health coverage, you don't have that
and you don't start off with a pool of people that you want to
cover. You're saying we're going to set up this particular
plan, then we're going to attract people to come into it. By
definition, you're then skewing the risk pool that's in that
market, making it not only different from the small group
market, but different from a large group that's actually
representing a company.
Ms. Blunt Rochester. I am just going to close out by saying
the Committee knows I have served as Deputy Secretary of Health
and Social Services, Secretary of Labor, State Personnel
Director. This issue of health care cost and quality has been
one that has plagued us for many, many years. We need to all be
on the same page and be doing it as one country, not a lot of
different separate groups.
Thank you. And I yield back.
Chairman Walberg. I thank the gentlelady. And now I
recognize my friend from Tennessee, Dr. Roe.
Mr. Roe. Thank you, Mr. Chairman. And I have been in the
small group market when we started our practice and grew now to
the large group market. I have also served as a mayor of my
local community where we did self-insurance plans. So I have a
fairly good understanding of the market. I also have the
Affordable Care Act and have had two major operations in the
last 18 months, one for cancer, and I would have been better
off with each of them just to have written a check. It would
have been cheaper. In my district, almost as many people paid
the penalty last year as got a subsidy. So it isn't working
like a charm in the First Congressional District of Tennessee.
I will just start by saying that.
Now, secondly, I could not agree more that we want to
increase the access to care to people, lower cost, and increase
quality. I have a good friend of mine I won't mention, he has
over 15,000 employees in his business. He has been able to put
a health maintenance plan in that business. And we know what
the drivers are, hypertension, diabetes, obesity, smoking,
cancer, we know what those are. And with a large group like
that, you can manage your health care costs. And he has been
able to keep those at one percent level for the last several
years. Why in the world would we put a roadblock up to keep
these small business owners from doing the same thing? I know
you are absolutely right, Ms. Monson, one of the hardest things
to do and one of the most valuable people in my office are my
employees in a doctor's office or in a realty office. Good
people are hard to find. They need this coverage for their
families and themselves and they need it affordable. And the
way you can provide that is getting a larger risk pool. And,
look, we had great employees who had serious health benefits,
we wanted to--as an employer, I wanted to take care of those
people, not only in a small business. These are not just
employees, they are your friends. You may have worked with them
for 25-30 years, which I did routinely. And I found out when we
got older things happen to us. We didn't abandon those people.
And it is offensive to me when people come up here and say that
I would do that, that small business owners would do that.
So I know them, I work around them, and, by the way, we had
this Christian sharing ministries that has grown dramatically
after the Affordable Care Act simply because coverage costs
went down. And, Ms. Monson, you made a comment--and I think you
will find this with all small business owners--if they could
find a product that was affordable and offered quality coverage
for their employees, they would buy it. The problem is cost,
and that is how do you get the cost down. And I agree with you
all, how do you provide quality product.
So I think, Mr. Condeluci, I read your testimony last night
and you made some incredibly good points in here, is that this
is not a fly by night plan, these are quality plans that are
governed by ERISA, they are in a different silo, agreed, than
the small group market. And one of the comments, Mr. McGrew,
that you made, was that there are two insurers in the state of
Kansas. Well, if I were those two insurers, I wouldn't want any
competition in the state of Kansas. I certainly wouldn't want
an association health plan where my people there could buy
insurance from somewhere else. And in Alabama, I know there is
a dominant player in that market. In Tennessee there is a
dominant player in the market. So I bring these up.
And Ms. Monson, back to you. I want you just to again
comment on the importance of your employees in your franchise
business. And quite frankly, if 10 percent of franchise
employee workers would get health insurance, you would have an
incredibly large 700,000-1,000,000 people in a market. And,
believe me, you can control costs doing that.
Ms. Monson. Thank you. It all comes down to competition and
competing for the best employees. And the best employees are
smart, they understand. You know, I keep hearing this, we're
going to provide skinny plans or poor coverage. That's not the
case. People today are educated. The employment candidate is
going to ask questions about the health insurance, they're
going to know what it covers. There is no upside for any
employer to offer subpar health insurance because we do, we
care about our employees, we want them to be healthy, we want
them to continue and grow within the organization and to
remain. There's no incentive to have lousy coverage, only good
coverage.
And thinking about the 7.6 million employees that work for
the 733,000 franchise establishments in the U.S., what an
amazing large pool. Think about the buying power. It's all
buying power.
Mr. Roe. Well, the last thing I will say before I close up,
one of the things I wish the ACA had worked as well, and it has
for some people, but it has failed a lot of people. And what we
are seeing in our practice is with the out of pockets and co-
pays so high, people come get a preventive service, but then if
you find anything wrong with them and you have to send them
down to the hospital or wherever, to a diagnostic center to get
testing, all of that is on their nickel. And if you have got a
$4-5-6-7000 out-of-pocket, you just don't get it done.
So I think this is an incredible opportunity. I am excited
about this. I think it will be fun to see if this could work. I
know it will.
Thanks and I yield back my time.
Chairman Walberg. I thank the gentleman. I recognize the
gentleman from New York, Mr. Espaillat.
Mr. Espaillat. Thank you, Chairman Walberg, for this
opportunity. I ask for unanimous consent to enter a comment
letter submitted by state attorneys general in opposition to
the Department of Labor's proposed association health plan
rule.
Chairman Walberg. Without objection; hearing none it will
be submitted.
Mr. Espaillat. Thank you, Mr. Chairman. Mr. Chairman, as I
have said, 16 state attorneys general and the attorney general
from the District of Columbia, have submitted this comment that
stipulates in fact that they have great concerns with this
proposed action.
Mr. Chairman, here we are again, talking about association
health plans, an idea which has failed time and time again. As
our attorney generals have said, their state and respective
offices have the duty and experience of protecting consumers
from predatory practices associated with AHPs, but this
proposed rule will threaten those very protections and open up
consumers in states and regions across the country to the real
potential of fraud and catastrophic wrongdoing.
Almost 75 pieces of legislation dealing directly with AHPs
have consistently been introduced in Congress, dating all the
way back to the 103rd Congress. Let me repeat this again,
almost 75 pieces of legislation dealing with these issues have
been consistently introduced in the U.S. Congress dating back
to the 103rd Congress. Of those almost 75 pieces of
legislation, nine bills have passed at least one of the
Chambers of Congress, and of those nine, not one--not one has
been signed into law. Additionally, during that time, then-
Secretary of Labor Elaine Chao's testimony on AHPs in 2013, it
was clear that the Department of Labor did not have the
authority to act on AHPs without legislative action from
Congress.
This effort will lead to segregating the insurance pool
into one that has healthy young people, people with preexisting
conditions, and the others will have seniors, people with
catastrophic illnesses, people with preexisting conditions,
poor people. That is what this actually will do.
This tells me two things, one, there has never been enough
support of confidence in this kind of association health plan
proposal to actually authorize them through federal
legislation, and, two, until now the Department of Labor has
never believed it had the authority to establish these kinds of
AHPs on its own. In fact, this proposal is directly opposed to
the ratified Congressional intent of both ERISA as well as the
intent of the ACA.
Aside from the massive enforcement issue, potential for
widespread fraud and abuse, and as well as the constant legal
battles that will be attached to AHPs, it seems to me that the
Department of Labor requires Congressional authority to
implement these rules and the Department quite simply lacks
that authority.
My question is--recognizing Mr. Condeluci found it
acceptable to submit a brand new testimony this morning, which
I am going to completely ignore--I am going to ask Mr.
Arensmeyer this question. I represent New York's 13th
Congressional District, which is home to many small businesses
that are critical to the local economy, our neighborhoods, and
workforce. If implemented, what exactly does this proposed rule
mean for those small businesses and the health of their
employees?
Mr. Arensmeyer. What it means is if they don't find the
AHPs that have access to--if they don't have the kind of
benefits they want they are left in the core small group pool,
but by pulling out the participants in that pool that are
healthier and younger, their costs are likely to go up. Or, if
they chose to join an AHP, they're at risk they don't have
coverage for certain needs that they might have.
Mr. Espaillat. One last quick question, as I am running out
of time, how does this impact the ultimate risk factors that
are considered for any pool of insurers?
Mr. Arensmeyer. Well, again, I mean it comes down to you
want as broad and robust a pool as possible. And there's--
operating with the same rules of the road. So when you start to
play with that and you start to pull certain people out of a
pool, you start to create instability in the whole marketplace.
I mean we're all for competition and we'd love it if there were
more group plans participating in the small group market. So,
again, if they come in playing by the same rules that would be
great. We all are concerned about costs, there's underlying
costs in the system we need to deal with. It's a question of
people in the common pools that are joined by common economic
interests.
Mr. Espaillat. Thank you, Mr. Chairman.
Chairman Walberg. I thank the gentleman. I recognize the
gentlelady from Oregon, Ms. Bonamici.
Ms. Bonamici. Thank you very much.
Chairman Walberg. Oh, excuse me, excuse me. I saw you
hustling around there and--can't keep track of the players
here. So take your time, take your time, get in place. And now
I recognize the gentleman I never want to slight, the gentleman
from Minnesota, Mr. Lewis.
Mr. Lewis. Thank you, belatedly, Mr. Chairman. You know, I
am a little perplexed as to the opposition to expanding these
small business pools. For many, many years we have had large
businesses operate under the notion of say a self-insured plan
to get out from under very onerous state mandates. They
obviously had purchasing power advantages and large networks
that small businesses didn't have. So the idea of granting in
the association health plans that same purchasing power,
economies of scale that self-insured plans had or that larger
businesses had, seems to me to be something that wouldn't
generate much opposition, especially since you look at the
status quo. And as the Committee has pointed out, since 2008,
the share of small businesses with fewer than ten employees
offering coverage at all has dropped nearly 40 percent. In my
home state of Minnesota, just since 2013 and the implementation
of the Affordable Care Act, some 7000 more small businesses
have dropped coverage. So we do have a crisis here.
It seems to me, Mr. Condeluci, that therefore the fallback
revision of the opponents of this is well, if you allow these
pools to form, why, they will be offering these skimpy plans.
Now, you know, my parent used to buy something called major
medical. When we understood what real insurance models looked
like, we realized that your automobile insurance doesn't cover
the tires, doesn't cover the oil change. If so, it would be sky
high. And therefore health insurance for many, many years used
to cover a catastrophic event that could bankrupt a family, but
if you took Johnny or Susie to the annual physical, you paid
it. We now with the Affordable Care Act gone the other way. We
ought to have first dollar coverage on everything, I don't want
any co-pays, I don't want any deductibles. And we put the
system on the market and all we are left with are spiraling out
of control premiums.
But, isn't it true, Mr. Condeluci, that for many, many
years, businesses, especially self-insured, were trying to get
out from under very costly state mandates, for that very
reason, right?
Mr. Condeluci. Yes. Self-insured plans have ERISA
preemption protections and therefore the state benefit mandates
do not apply to those self-insured plans. And therefore, the
costs associated with the self-insured plan is typically lower.
While employers, be it small, be it large, they're sponsoring
those self-insured plans, offer comprehensive coverage that are
almost as comprehensive as the essential health benefits, as
well as many of the state benefit mandates that would otherwise
apply for ERISA preemption.
Mr. Lewis. And those people under self-insured plans
weren't shortchanged, they had very good health insurance. But
the fact is there were costly mandates in my home state of
Minnesota that some larger corporations wanted to get out from
under to tailor a health insurance plan to fit their employees.
And they had that option, but small business didn't have the
option. But it is also true that the Affordable Care Act wanted
to limit that, and therefore came up with these essential
health benefit plans. So the notion that they could get out
from under those under the ACA simply by an association health
plan is erroneous, is it not?
Mr. Condeluci. Yes, it is, sir. And it's important to
understand that employers offer health coverage to attract and
retain talented workers. And small employers compete with large
employers for talent as well as they compete with their own
small employer peers. And those small employers are going to
seek to offer comprehensive coverage. And virtually every large
employer out there offers coverage that includes the essential
health benefits or offers coverage that is actuarially
equivalent to the essential health benefits. So the claim that
these association health plans will offer skimpy plans I think
is difficult to accept, just basically seeing what large
employers out there are offering. And I will note, the drafters
of the ACA specifically exempted large group, fully insured
plans and self-insured plans from the essential health benefits
requirement, as well as some of the other insurance market
reforms because the drafters accepted the notion that these
large employers were offering comprehensive enough coverage.
And therefore, the drafters said why should we impose these
requirements when these employers are already doing the right
thing?
Mr. Lewis. So if it is good enough for those large
employers, it is probably good enough for small business, isn't
it?
Mr. Condeluci. Yes, sir.
Mr. Lewis. Having said all of this, isn't it true, however,
that we have got to get back to the notion of a catastrophic
health insurance policy that allows people to buy coverage that
starts, quite frankly, with a very low deductible, but that
wouldn't bankrupt their family. Instead, we have gone down this
road of prepaid medicine, thinking about that first dollar
coverage, and that is an impossibility in most insurance
markets, isn't it?
Mr. Condeluci. Yes, sir.
Mr. Lewis. Thank you so much. I yield back.
Chairman Walberg. I thank the gentleman. And now I
recognize, again, the lady from Oregon, Ms. Bonamici.
Ms. Bonamici. Thank you very much, Mr. Chairman, and
Ranking Member, and thank you to our witnesses for being here.
I used to do financial counseling at Legal Aid and I would
work with clients who were devastated often times by health
care costs. And some of them just could not afford insurance
and some of them had insurance but it didn't cover them when
they needed it. Also, when I was in private practice, I
represented franchisees, and I know how hard they work, often
family owned businesses. And I know they want to do right by
their employees. And even before that my first job was in my
mom's small business. I understand and know how important small
businesses are to our communities, to our economy, and of
course we all want small business owners and employees to have
access to affordable, accessible health care.
But I am very concerned because we have seen a great deal
of evidence suggesting that association health plans do not
work as intended. I think back to before the Affordable Care
Act, which passed before my time in Congress. We knew that
people who could not afford insurance would get their health
care in emergency rooms, which is the least effective, most
expensive way to get health care. Those costs would get passed
along to everyone. And even Dr. Roe recognized the ACA works
for some people.
What we should be doing is, we should be strengthening the
Affordable Care Act by providing certainty for insurers, we
should be strengthening and stabilizing the individual and
small group markets. That is what would really make a
difference.
Mr. Chairman, I would like to introduce into the record a
letter addressed to Secretary Acosta from the AARP, in which
they note the proposed rule's expansion of AHPs could greatly
increase the likelihood that working Americans, especially
those age 50-64, would face higher insurance premiums and the
loss of access to critical health insurance coverage.
Chairman Walberg. Without objection; and hearing none, it
will be introduced.
Ms. Bonamici. Thank you, Mr. Chairman. Mr. Arensmeyer, you
referenced a letter signed by 17 state attorneys general,
including Oregon Attorney General Ellen Rosenblum, from my home
state. Could you explain why these attorneys general are so
concerned about this rule and their ability to enforce state
regulations on association health plans?
Mr. Arensmeyer. Well, based on the letter I think they're
concerned about a lot of the concerns that I've raised here
about separate risk pools. They're concerned that, particularly
on the interpretation of ERISA, that ERISA is based upon
regulating plans that may not have the same rules as the small
group market, but they are based on a common economic interest
in the--you know, among the participants in that plan.
So, again, we've heard a lot about comparing large group
plans with the AHPs. I mean large companies, like General
Motors, IBM, Google, they have an interest in providing
comprehensive coverage. We've heard that most of them provide
essential health benefits because they have an economic in
doing that. There's no common economic interest in an
association health plan that is set up purely to provide
coverage and could go away tomorrow. That's not the case with a
large group plan. Google is not going to get rid of its large
group plan tomorrow because, you know, there's some issues with
risk in it.
So, again, they're concerned that ERISA, the way it was
written and the way it's been interpreted, that this flies in
the face of that. It's also concerned that it flies in the face
of the intent of the Affordable Care Act.
Ms. Bonamici. Thank you. And I noticed in your testimony
you mentioned an Urban Institute analysis of association health
plans in Oregon prior to the ACA. That analysis found there was
increasing potential for adverse selection in the state's
remaining small group market. Could you just briefly summarize
that study and comment on whether this proposed rule might lead
to adverse selection?
Mr. Arensmeyer. Well, again, it gets back to what I'm
saying. If you have something that's set up with a separate set
of rules, it's purely to provide health coverage, you don't
have the built in protections, just sort of market protections,
that you have with a normal large group plan. So there's a
tendency to maximize, you know, to try to keep the cost down by
reducing benefits and by--you know, at some point then people
start to get sick and they're not covered and the whole
system--
Ms. Bonamici. Thank you. I wanted to get one more quick
question in. Mr.--I know you said Condeluci, I want to say
Condeluci--it has been referenced before, there has been a long
and well documented history of health insurance scams promoted
through AHPs. According to the GAO, between 1988 and '91
operators of multiple employer entities left about 400,000
people with medical bills. There is just a whole history here.
The Department of Labor does not address the fraud that is
prevalent in this market. There is not clear indication of how
the rule would protect consumers. So what would the Department
of Labor need to do to prevent fraud and protect legitimate
Associations or small businesses or self-employed individuals
from being scammed?
Mr. Condeluci. It's a very fair question. And it's
important to note, because a lot of folks overlook the fact
that the ACA, driven by the GAO report and the investigation on
fraudulent activity, led to actually enactment under the ACA
additional enforcement authority for the Department of Labor.
So the Department of Labor now can actually impose civil and
criminal penalties if there's fraudulent activities in these
self-insured and/or fully insured AHP type plans. In addition,
the DOL can go in and seize assets if there's solvency concern
without a court order. So there are now enforcement tools that
are in the law that have been offered to the Department of
Labor, which many would argue have contained many of the
fraudulent activity that occurred in, let's say, the early
2000s to the 2004 timeframe. And Congress does have the ability
to provide additional funding to the Department of Labor to
increase that enforcement authority and/or provide additional
tools to ensure that there are not fraudulent activities, and
therefore containing much of the concern and much of the
fraudulent activity that has happened in the past.
Ms. Bonamici. Thank you. I see my time has expired. Thank
you, Mr. Chairman.
Chairman Walberg. Very adeptly done, to get that last
question in. Thank you. I thank the gentlelady. I recognize my
good friend and colleague from Michigan, Mr. Mitchell.
Mr. Mitchell. Thank you, Mr. Chair. Let me start briefly,
Mr. Arensmeyer, with a comment for you. I led a couple of small
businesses, one that evolved into a fair sized business; I was
chair of an association of those small businesses. I am
astonished, and frankly a little offended, with your comment
that somehow there is not a joint economic interest, that we do
not have the same level of economic interest in the wellbeing
and health of our employees as large businesses do. And I think
it is based on the very premise with which you go forward with
your testimony. So your position, of course, you are welcome to
it, it is noted, but I think it is based on some false
premises. I was extremely concerned with the health and
wellbeing of our employees.
Let me go through a little history. As with Dr. Roe, I was
in a large group plan with Chrysler Corporation and a self-
insured plan. We had a business that grew to 650 employees and
we had part-time employees that were teachers and instructors
that worked less than--some less than 15 hours a week because
they were instructors. During the economic downturn we created
a health insurance plan for employees that were regularly
scheduled at least nine hours a week, because frankly in many
cases they were female employees, their husbands were losing
jobs in the auto industry and they had no health insurance.
Along came the ACA, which by definition, because we had
this plan as an option that we created for our part-time
employees, created obligations that frankly we couldn't afford
for part-time employees, some of which worked as little, as I
said, 12 hours a week. It created obligations that we had to
make a choice between continuing insurance for employees, which
we did because we thought it was necessary for them and their
families, or telling them to go to the Affordable Care Act.
Huge obligations that no one seemed to care much about.
I met with a large employer recently, a hospital, who told
me two-thirds of their ER cases should go to primary care--
still primary care or urgent care but still come to the ER. The
Affordable Care Act has failed to deal with the fundamental
problems which we are kicking around today, a lack of
transparency of cost and choice. Try to find out what the cost
of an MRI at a clinic versus an MRI at the hospital--let me
know how that works for you. Second, is a lack of user input
and involvement in the cost and choice. And, third, is the lack
of the competition on what the cost is. We have disassociated
the user from the cost, and now we are trying to paper it over
with one reg. after another.
Until we fundamentally deal with the Affordable Care Act,
fundamentally deal with what we are not talking about, which is
the cost of health care in this nation, and people having a
choice in understanding what their costs are, we are going to
continue to try to move costs around from one group to another.
And then, hope the government will pay for it, the taxpayers.
So, while we talk about this plan today, the longer we sit
here and hope that the federal government is going to somehow
find a way to milk the taxpayer to pay costs for someone that
doesn't know what their cost is, that goes to the emergency
room for care they could go to urgent care. Because that is
what they have done their entire life, our health care costs
will spiral. And we should do that, we should actually take the
effort to do that here in Congress.
A couple of quick questions. I am running out of time, and
I apologize, but it frankly frustrates me.
Ms. Monson and Mr. Condeluci--I apologize for the
pronouncement, sir.
Mr. Condeluci. Quite all right.
Mr. Mitchell. Is there some reason there wasn't some
explicit language put in place on the joint employer to exclude
them or to clarify the exclusion so in fact it doesn't create a
further risk as being defined as joint employer? Can you help
me with that?
Ms. Monson. I know that the International Franchise
Association has made a request that we have a safe harbor
because we do not want to have the risk of being deemed joint
employers just because there is this valuable affordable
quality health care plan available, whether it's through the
FASTSIGN sister or whether it's through the International
Franchise Association, it's certainly a request we've made.
Mr. Mitchell. Well, given all the conversation we have had,
including with the Secretary of Labor, both here and in
meetings about the joint employer rule, I am frankly astonished
that there wasn't something done in the regulation to in fact
address that. I don't understand why and I think by letter I
may well participate in making a comment on that because I
don't understand why it is they didn't address that. It has
been a huge conversation around here, yet it is ignored by the
Department frankly.
One more quick question because I know I am going to run
out of time, but I am going to see if I can use my colleague,
Ms. Bonamici's, time. You note, Mr. Condeluci, a potential
conflict between potential state law and the redefinition of
large group AHPs by state law saying the small groups are
causing issues there. How do you propose they resolve that?
Mr. Condeluci. First, the proposed regulations do nothing
to change state regulation. So therefore, states could, if they
so choose, enact a law that re-characterizes a large group, a
large group fully insured AHP, as a small group plan, therefore
subject to the small group market rules. And there is an
argument that could be subject to an ERISA preemption
challenge.
And, in addition, there is certain language in ERISA that
requires states to impose certain regulation on fully insured
MEWAs or fully insured AHPs. And a re-characterization law such
as this is arguably inconsistent with the ERISA statute as it
relates to regulating fully insured MEWAs as the state level.
Mr. Mitchell. Thank you, sir. One quick comment, Mr. Chair,
is I did review really quickly the letter from the 16 attorneys
general opposing this regulation. It won't shock you to know,
Mr. Chair, that all 16 attorneys general have explicitly
expressed in no small manner their support for the current
Affordable Care Act, such states as New York, Massachusetts,
and California. So that will state a great deal their rational.
Thank you, sir.
Chairman Walberg. I thank the gentleman for doing your
homework. And I recognize the gentlelady from Florida, Ms.
Wilson.
Ms. Wilson of Florida. Thank you. I want to begin by
thanking our subcommittee Chairman Walberg and Ranking Member
Sablan for holding today's hearing. And I would like to thank
our witnesses for your testimony and for being here today. I
ask unanimous consent to enter into the record a comment letter
in response to the proposed rule from the American Cancer
Society Cancer Action Network.
Chairman Walberg. Hearing no objection, and I hear none, it
will be entered.
Ms. Wilson of Florida. I strongly believe that if the
Department of Labor's proposed rule is to expand association
health plans goes into effect it would seriously undermine many
of the benefits offered under the Affordable Care Act, mainly
by weakening consumer protections and shifting cost onto
working people. Indeed, underlying effects of association
health plans limit access to comprehensive health coverage,
increase costs for consumers, and threaten coverage for people
with preexisting conditions. Moreover, they leave consumers
with even fewer protections against fraud.
Certainly, without guaranteed coverage for essential
benefits such as maternity care, mental health treatment, and
substance use treatment, many people may be left with
inadequate coverage that neither gives them access to the care
they need, nor offers adequate financial protection against
serious medical conditions. And, in fact, the proposed rule
goes so far as to explicitly state that some association health
plans might thrive by delivering savings to members by other
means, such as by offering less comprehensive benefits.
In addition, these plans would increase cost and threaten
coverage for people with preexisting conditions, as healthier
and lower cost consumers get cheaper plans with less benefits
that may not meet their health care needs. Association health
plans would leave older, sicker, and higher cost consumers or
consumers with preexisting conditions behind in a traditional
market with skyrocketing costs, making it outright difficult to
obtain coverage.
I want to ask a few questions of our witnesses.
Mr. John Arensmeyer, you state in your testimony that
because most small businesses currently purchase coverage in
the small group market, it is important to protect the
stability of this market. In your opinion, does the proposed
rule contribute to stability or does it undermine it?
Mr. Arensmeyer. We believe it undermines it. And, again, as
I said before, by removing certain participants in that market
who are likely to be at a lower risk, thereby leaving higher
risk folks in the small group market and increasing costs and
increasing instability.
Ms. Wilson of Florida. Under the proposed rule associations
tied together by the same industry or geographic area can form
solely for the purpose of offering coverage. This means
employers could form a new organization for the sole purpose of
achieving savings, avoiding many of the Affordable Care Act's
consumer protections. But what about small businesses and
workers that want these protections? If they choose to stay in
the traditional market, what could the rule mean for them?
Mr. Arensmeyer. Well, obviously, if they choose to stay in
the existing market and you remove lower risk out of the small
group market, you're going to end up with higher costs, more
instability in what's left and it's going to jeopardize the
protections that they have. Again, it's really about, you know,
we welcome competition and there's been a lot of talk about
cost reduction. Absolutely, there is a lot of need to reduce
health care costs in the whole system, but at the same time if
we're going to be talking about coverage and robust and stable
markets, we have to have everybody playing by the same rules.
Ms. Wilson of Florida. What role do you think states should
play in regulating these health plans?
Mr. Arensmeyer. Well, traditionally states have played a
very significant role in regulating health coverage. And right
now it's unclear, and as Mr. Condeluci said, you know, states
may believe they can still regulate these or re-characterize
these groups as small group, but there would be a likely
challenge under ERISA. So it again creates legal instability on
top of the economic instability.
Ms. Wilson of Florida. Mr. Michael McGrew, in its proposal
DOL speculates that associated health plans will generate
substantial inefficiencies that result in cost savings for
their members, but provides no evidence and no actual numbers
to support its assertions. What specific administrative
functions will you perform more efficiently than an insurer,
and what percent savings does that yield?
Mr. McGrew. Thank you, Madam Congresswoman. I am not an
insurance expert, but I would say that from the standpoint of
the National Association of Realtors, if they were given the
opportunity to provide an AHP plan to our 1.3 million members,
we would certainly benefit from the fact that the National
Association of Realtors has a robust value proposition to offer
the rest of us who are small, independent, and individual
company owners who do not have the time and the ability to do
the kind of work that you're suggesting.
Chairman Walberg. I thank the gentlelady; her time has
expired. I recognize the businessman and gentleman from
Pennsylvania, Mr. Smucker.
Mr. Smucker. Thank you, Mr. Chairman. Mr. McGrew, your
testimony underscores what I heard just recently in a meeting
with realtors and their association in the district that I
represent. I think top concern for them was health care. And I
think all of them in the room, or almost all of them in the
room, were covered through the individual marketplace and were
experiencing the kinds of things that we have been hearing
here, high cost, prohibitive premium costs, and very high
deductibles.
I know in other situations I have heard individuals who
really wanted to go into business for themselves but saw the
costs of health care as a barrier to entry essentially. Are you
finding that with realtors as well? Are they making decisions
not to go into real estate because of the cost of health care?
Mr. McGrew. Absolutely. There are career decisions being
made every day based on your ability to get health insurance.
And it's interesting to me. The entrepreneurial spirit that is
embodied in the realtor community is prevalent around the
United States as well. And why is it that individual sole
proprietors that have this spirit are discriminated against, if
you will, from having the ability to access the more affordable
health care markets?
Mr. Smucker. That is the way I see it. It was mentioned
earlier that we want to ensure that everybody can get to play
by the same rules. And I think, you know, we have seen
tremendous opportunities, tremendous prosperity in our country
because of unleashing individuals' ability to start a business,
to grow their businesses.
And I was an owner of a large enough business with several
hundred employees that could self-insure. First of all, we had
a large enough pool we could buy our own insurance, but as we
continued to grow we were able to self-insure. And being able
to attract employees from other businesses, the health
insurance that we had available was often the deciding factor,
being able to pull them away from another maybe potentially
smaller business. So it really isn't a level playing field
today, is it?
Mr. McGrew. It does not feel like that, no, sir.
Mr. Smucker. And do you find that as well, Ms. Monson?
Ms. Monson. I do find it as well that us as small employers
don't have the same opportunities to get affordable health care
for our employees as large employers and labor unions do. And
it puts us at a competitive disadvantage.
Mr. Smucker. Mr. McGrew, back to the realtors. In the event
that the Association could put together an AHP, what percentage
of realtors do you think participate in that?
Mr. McGrew. From the standpoint of viewing that as an
option, I think virtually all of them would. Today 90 percent
of our members are covered one way or another, many of them
through their spouses. If they had the opportunity to see
better options that are provided from a brand they trust, a
brand they already do business with, the National Association
of Realtors, I believe many of them would seriously consider
that as an option.
Mr. Smucker. Ms. Monson, one of the things that I have
noticed as well is that small businesses, particularly
businesses under maybe ten employees, have just simply given up
on being able to provide health care for their employees. The
employees go to the individual marketplace and then are faced
with the kind of high cost that we are seeing. Are you finding
that with your franchisees as well?
Ms. Monson. Yes, I am. I find that with our FASTSIGN
franchisees. And also, on a recent survey that the
International Franchise Association conducted with its 733,000
other franchise location members, 65 percent don't provide
health coverage, primarily because of the cost. But then, when
they were asked the follow-up question, if quality affordable
insurance was available through say an IFA AHP or some other
AHP--and let me just clarify, IFA is a bona fide association.
This is not a fly by night deal, we are not looking to make a
quick buck by getting into the association health plan market,
this is about taking care of our members and our members'
employees. We have a fiduciary responsibility, we care about
our brand. We would never do anything to hurt our brand. So
when I hear accusations that it's fly-by-night, that we're just
going to put something together to make a quick buck, nothing
could be further from the truth. And in that survey of our
members, 100 percent say they would be looking forward to
offering that quality, affordable health care coverage through
an AHP.
Mr. Smucker. Thank you.
Chairman Walberg. I thank the gentleman and I recognize my
friend from Connecticut, Mr. Courtney.
Mr. Courtney. Thank you, Mr. Chairman. And as long as we
are all doing homework around here, I just would note that the
letter that was submitted from the National Association of
Insurance Commissioners that made a forceful argument for
retaining regaining state authority over the operation of MEWAs
and these association health plans was actually a very
bipartisan letter. We have the Commissioner of the Tennessee
Department of Insurance, as well as the South Carolina
Department of Insurance who signed this letter. And, again, I
would ask that it be added to the record.
Chairman Walberg. It has been already, and duly noted, and
Mr. Mitchell and Dr. Roe will probably want to discuss that
with you.
Mr. Courtney. Well, again, I think, you know, these are the
folks who are closest to this issue on the ground. And they
talk about the fact that, you know, these plans have been
plagued by insolvencies. That is quote, unquote in terms of the
letter that they submitted. And, again, they raised a whole
series of questions because, frankly, the Department has been
very kind of slippery in terms of just, you know, what is going
to be the lines of authority here, as was stated by some of the
other witnesses. And because of that, they say at a minimum
this rule should be put off until 2020, until we get to a
really clear understanding of this.
I would just say, you know, to Mr. Condeluci, that, you
know, the track record of U.S. DOL in terms of enforcing
pension problems that, again, is their jurisdiction since ERISA
was passed, is very, very spotty. And we have had casework in
my office where we have struggled, even under the Obama
administration, in getting actually help for people in terms of
pensions. So the notion that, you know, not to worry, you know,
that the U.S. Department of Labor is going to have jurisdiction
over 311 million people in this country with, you know, all the
other authorities that they have to do and take it away from
the folks in the attorneys general's offices or the insurance
commissioner's office, in my opinion is really a very risky
proposition. And, again, we have amply experience to show that
really is not, in my opinion, the way to go given, again, the
real empirical history that we know about in terms of
association health plans.
Now, we have heard some conversations here about the fact
that, you know, we really should give people the option for the
catastrophic coverage. Mr. Lewis talked about that earlier.
Again, Mr. Arensmeyer, you know, I actually just had a hip
surgery eight weeks ago and, you know, after one night in the
hospital it was, you know, get out of here, because, as we
know, health care has shifted outside of hospitals now. I mean
the notion that the old days of catastrophic coverage--
actually, that was where the majority of health care was
delivered, you know, back in the '60s and the '70s, in the
heyday of catastrophic coverage. The essential health benefits,
which was part of the Affordable Care Act, was grounded in the
Institute of Medicine going out and analyzing, you know, what
is health care, you know, where is it delivered. And that is
really what was sort of the structure in terms of making sure
that people are going to get the necessary care that they need.
And catastrophic plans, which just take care of
hospitalization, that doesn't work in the 21st century. And I
was wondering if you could comment on that.
Mr. Arensmeyer. Well, absolutely. And I want to echo what
the Ranking Member said, that the way we're going to--first of
all, the ACA needs some fixes. I mean we're the first to argue
that. But we need to do this on a common ground, working
together with a common risk pool, with common rules of the
road. And if you start to sort of Balkanize or break off
different pieces of the market it makes it much harder.
Essential health benefits not only were put in place to
cover, you know, what was generally perceived among
professionals to be stuff that should be covered, there also
was a common set of rules. And, again, to say it again, Mr.
Condeluci said the small group market as a result doesn't have
a lot of price differences in it because of that. So we would
absolutely--we want to see more competition, we want to see
fixes made to the Affordable Care Act, but we want that done
with a common set of rules.
Mr. Courtney. Thank you. And, again, as a small employer
myself before I was elected to Congress ten years ago, and saw
what was happening to age rating pre-Affordable Care Act, I
mean every time I had an employee who hit the age of 50 their
rates went through the roof because age rating was about six to
one back then under the market. The ACA contracted that down to
three to one. And, again, I wasn't here earlier, but I just
want to reinforce that point. We are opening the door here now
to age rating, which I have a lot of realtor friends back home,
I mean they tend to be, you know, folks in their 50s and up and
they tend to be frankly more women. And, you know, gender
rating and age rating, you are reintroducing that. You know,
careful what you ask for.
And I would just note again, lastly, that there are 652
operating association health plans in this country right now,
so this is not like the ACA posed some existential threat to
association health plans, they are out there and they are
working. The question is how are they going to be organized.
And we want to make sure that people get the care that they
need in 21st century terms, not 20th century terms. And we also
want to make sure that the benefits are going to be fair in
terms of how they are allocated.
With that, I yield back.
Chairman Walberg. I thank the gentleman. And now I am
privileged to recognize the gentleman and hero from South
Carolina, Mr. Wilson.
Mr. Wilson South Carolina. And thank you very much,
Chairman, Tim Walberg. I appreciate your leadership to promote
positive health care, to address that Obamacare has destroyed
300,000 business jobs and forced 10,000 small businesses to
close.
And, Mr. McGrew, thank you for your testimony on behalf of
the National Association of Realtors. As a former real estate
attorney myself and a grateful dad of a realtor, I appreciate
your service on the executive committee and board of directors
of the Association.
You mentioned in your testimony that many of your real
estate agents serve as independent contractors. Can you explain
the system in the real estate industry and elaborate on the
advantages that operating as an independent contractor provides
for real estate agents and for the agencies they work?
Mr. McGrew. Thank you, Mr. Congressman. Yes, independent
contractors are a notion that not everyone understands. When
you have the opportunity to make a living with the least number
of restrictions on the way that you do your business, that is
the spirit that most independent contractors, certainly realtor
independent contractors bring. They want that opportunity to
build their own brand within the confines of the required
supervision that companies like mine provide for them, but they
can build their own business with a minimum of interference.
And that's the good news.
The bad news is, as I mentioned in my testimony, it's an
eat what you kill business. They have to have something to hunt
and we do not guarantee them a paycheck.
Mr. Wilson South Carolina. Well, I just want to point out,
too, as Mr. Courtney, that we appreciate realtors in our
community. They are leaders in the Chamber, the Rotary Club,
the Lions Club, wherever you need a volunteer, there are
realtors. So thank you very much for such professionals.
Mr. McGrew. Thank you.
Mr. Wilson South Carolina. And, Ms. Monson, I want to thank
you for being here today too on behalf of the International
Franchise Association. Your organization is appreciated for
providing entry-level jobs leading to extraordinary achievement
for workers. What a great opportunity to provide for young
people in particular to achieve.
You mentioned that the recently proposed rule to allow
small businesses to band together to help lower cost, create
greater flexibility, increase access, and reduce administrative
expenses. You noted that many of the same principles have
allowed the franchise model to be successful, having
franchising especially suitable to the formation of association
health plans. You say ``franchising is perfectly built for
AHPs.'' Can you explain how the franchise model utilizes its
distribution communication and business practices that would
complement an association health plan?
Ms. Monson. Yes. Thank you very much. So if we take a look
at just what FASTSIGNS International does for its franchisees,
with over 600 locations in the United States and then another
30 in Canada, and in other countries as well, when we look at
the supplies that they use every day, we negotiate with
vendors. Because of the volume purchases, we get lower prices.
Even for services like payroll processing, we have an amazing
rate with some of the payroll processing companies, giving our
franchisees lower cost compared to their independent
competitors. And we do that with equipment, supplies, services,
everything that a franchisee in our business would need. We
have that expertise, we have a supply chain group that focuses
just on lowering costs for franchisees through negotiating.
Likewise, the International Franchise Association could do
the same, bringing that same knowledge and expertise of
franchising, of group buying power, and negotiating. And so we
are very confident that we can bring the cost down and compete
for the same quality coverage that large companies and unions
have, at a lesser price using that supply chain negotiating
skill and experience.
Mr. Wilson South Carolina. And, again, I appreciate
franchises. On Sunday, I was at a Wendy's and I couldn't
believe how hardworking the people were as they were confronted
with a baseball tournament at a next door park. A line as far
as you could see. And then a bus full of Chinese tourists in
West Columbia, South Carolina. And the people behind the
counter had a smile the whole time, which was startling.
And then, Mr. Condeluci, in your written references to the
2011 guidance by the Department of Health and Human Services
prohibiting forming a fully insured large group plan. What
impact did this have on association health plans?
Mr. Condeluci. I first want to set the record straight that
when I said that small group plans typically have uniform
prices, that's based on the fact that there are uniform rules
within a particular market. But different state, small group
markets vary widely, so costs vary widely. And relative to the
large group market, small group market costs are much higher.
So I just want to set the record straight because Mr.
Arensmeyer continues to point out the point that I had made
earlier. So I just want to clarify that point.
Sir, to your question, thank you very much for that. The
2011 guidance had an adverse effect on employer-run
organizations like local chambers of commerce and otherwise who
are offering fully-insured association health plans. It
essentially blew up their plan. They had a choice to either
discontinue their plan or shift to a self-insured plan because
the guidance required the insurance company to look through the
association, the underlying size of the group, to apply the
ACA's new market reforms. And that had an adverse impact and
discouraged these employer-run organizations offering these
plans. And that is the adverse effect that the 2011 guidance
had on those fully insured arrangements.
Mr. Wilson South Carolina. And thank you all for being here
today.
Chairman Walberg. I thank the gentleman. I want to at this
time thank the panel for your competency and your commitment to
presenting your case in the real worlds that you live in. So
thank you for taking the time to be with us today.
So at this point I would ask my friend and colleague from
Delaware, Ms. Blunt Rochester, for your closing comments.
Ms. Blunt Rochester. Thank you, Mr. Chairman. I want to
first thank the Chairman and the witnesses for your testimony.
Ms. Monson made a comment about caring about the brand and also
about our people. And that is evident by the fact that you are
all here on this panel. I think one of the challenges that we
face as lawmakers, and the same with our attorneys general
across the country, and our insurance commissioners, is that we
are protecting folks because of folks that are not in this
room, that do not care as much as you do, which reminds me of a
clarification that we would like to share on the letter that
Mr. Courtney referenced. It was not a duplicate, it was
actually from the National Association of Insurance
Commissioners. So we would like to submit that letter on his
behalf.
Chairman Walberg. Without objection, I hear none, it will
be submitted.
Ms. Blunt Rochester. Thank you. And I opened this hearing
by noting the eighth anniversary of the ACA, and just a
reminder of the progress that we have made in ensuring that
more Americans have access to affordable, comprehensive
coverage. This anniversary also serves as a call to action to
strengthen the ACA and to do more to increase access to
coverage. Instead, it feels like we are again defending the
health care system. And at the latest, we are now attacking
this from the small business owners and their employers'
perspective, their employees.
I just want to be clear that I fully support small business
owners, both in my home state of Delaware and across the
country. Small businesses are the driving force of our economy
and it is critical that we work to ensure that owners have the
resources they need to build thriving businesses of their own.
That is why I am deeply concerned about the potential
impact of this proposed rule on small businesses and their
workers. There is no doubt that the expansion of the
association health plans as proposed under the rule would
needlessly expose hardworking small business owners and their
workers to inadequate coverage and out of pocket expenses. Many
of the over 900 comment letters from legal experts and consumer
advocates that were submitted to the Department have been
mentioned here today, and many of these comments raised
concerns that the proposed rule could destabilize the state
regulated individual and small group markets, leaving consumers
with less comprehensive coverage, undermining state's authority
to regulate health insurance markets and protect consumers, and
exposing small businesses and workers to fraud and
insolvencies.
As you are aware, there are serious doubts as to the
Department of Labor's legal authority to make the policy
changes envisioned in this proposed rule. Mr. Condeluci in his
testimony characterized the rule as changes to the law.
If we want to help small businesses and their employees we
should not advance a rule that would leave them with
insufficient coverage that renders them unable to access vital
health services, such as mental health treatment, maternity
care, and substance use disorder treatment.
I do think the Committee would benefit from the opportunity
to hear from the Department of Labor on this rule and I will
look forward to working with Chairman Walberg to make that
happen.
In the meantime, I think our time would be better spent
talking about efforts to strengthen the Affordable Care Act and
increase access to affordable, comprehensive health coverage.
I yield the remainder of my time.
Chairman Walberg. I thank the gentlelady. And, again, this
hearing has been just that, a hearing opportunity to have ideas
and concerns raised to give us a better opportunity to address.
Yes, eight years of the Affordable Care Act is coming to
fruition. During the course of all of those eight years since
the Affordable Care Act was passed in a non-bipartisan fashion
and pushed through, we have had to deal with it. And multiple
times, in fact, we have reformed portions, repealed portions
that didn't work in the Affordable Care Act, and have done that
to a great degree in a bipartisan fashion, with even President
Obama signing some of those changes. We did pass in the House
very significant comprehensive reform, to a great extent to
repeal. We did our work on that. We continue to address
concerns, and this indeed is one of those areas that we have to
work toward.
As I listened today to the panel, it just reinforced my
memory on the fundamental strength of this country that was
developed as a result of small businesses, entrepreneurial
efforts, people who took risks to provide goods and services to
our developing nation that brought about a financial system, a
finance system that was enabled to assist businesses, small
businesses, entrepreneurs, in starting out their life and the
opportunity to succeed in this great new formed country, which
had an idea never before tried in the world. Doggonit, we have
been pretty successful, haven't we? And I think our process is
to continue that and to find means by which we can encourage,
not simply corporations--and we love that, certainly in
Michigan--but the auto industry and many other large
corporations that have helped this country be what it is. We
still go back to those small businesses, business men and women
who take that risk and want to move forward, who don't want to
be a part of a large corporation necessarily, but I would also
state, want to acquire a workforce that makes them successful.
And in this day and age, unlike not all that far back, there
are communication abilities that allow individuals to know what
is working and what will work better for them in another
business opportunity. And so the competition has been ramped
up.
And I think it is a moral obligation for us to be as least
restrictive as possible with the basic preventative and
protection requirements still put in place, yes, but least
restrictive to allow these entities as well, small businesses,
to compete on as level of a playing field as we can make it, by
allowing them to offer and afford to their employees an equal
opportunity to have the most important care that they feel for
themselves, and that is health care, brought to them in a least
restrictive way, in the fullest possible way.
And so that is the purpose of this hearing today. I think
the issue will go on. I think we will continue to discuss it.
We certainly want to hear from the Department of Labor. We want
to know that they are doing good work to make sure that our
people back in our Districts have that good work made available
to them to continue to advance, to care for their employees,
and to do it in the best way possible.
So, again, I thank you for our Committee's efforts, I thank
the panel for being here today. But with no further agenda
before the Subcommittee today, it stands adjourned.
[Additional submission by Ms. Blunt Rochester follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
[Whereupon, at 11:55 a.m., the Subcommittee was adjourned.]
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