Construction Legislative Week in Review
www.agc.orgAugust 27, 2009
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On the Inside
Politics
Passing of Ted Kennedy Impacts Senate Schedule
Project Labor Agreements
Comment Period for Proposed Rule Governing Project Labor Agreements Extended
Highway Trust Fund
FHWA Issues Order to Rescind $8.7 Billion in State Highway Funds
Card Check
Supporters Still Pushing for “So-Called” Employee Free Choice Act (EFCA)
Health Care
Is Your Company’s Health Plan “Qualified”?
 
Politics
Passing of Ted Kennedy Impacts Senate Schedule
 

The passing of Sen. Ted Kennedy (D-MA) will not just impact the health care debate he so passionately was a part of for half a century, but will reverberate to other issues as well. The loss of Kennedy leaves the Democrats with 59 votes in the Senate, one short of a filibuster-proof majority, until a special election is held in January.  Prior to his death, Democrat leaders had threatened to use a seldom-used procedural maneuver to pass health care reform without Republican support. It is not yet clear how the loss of Kennedy will play into the possibility of leaders using this procedure or if Democrats will work on getting bipartisan support.

Kennedy had chaired the Senate Health, Education, and Labor Committee which will be responsible for crafting much of the health care legislation in the Senate. Kennedy was the lead sponsor of the Employee Free Choice Act which had stalled in the Senate because it was unable to attract the 60 votes needed for cloture.  Among other major issues that he worked on were education and immigration. Return to Top

Project Labor Agreements
Comment Period for Proposed Rule Governing Project Labor Agreements Extended
 

The comment period on the proposed rule relating to project labor agreements, which had expired August 13, was extended for 30 days, with a new deadline of September 23. The proposed rule would implement President Obama’s executive order encouraging (but not requiring) agencies to consider requiring PLAs on projects over $25 million.  Read more about the rule and find AGC’s comments here. Return to Top

Highway Trust Fund
FHWA Issues Order to Rescind $8.7 Billion in State Highway Funds
 

The Federal Highway Administration (FHWA) has notified states that, as required by SAFETEA-LU, $8.7 billion in budget authority will be rescinded from their unobligated Federal-aid highway balances on September 30, 2009. While for some states this will not have a direct effect, in many states this will result in an actual cut in funding for highway construction projects.

Each state will lose budget authority in a proportion that matches its percent of the total highway funds that were provided over the six year life of SAFETEA-LU (FY 2004-2009). Senator Kit Bond (R-MO) attempted to remedy this situation with an amendment in July when Congress was taking action to keep the Highway Trust Fund solvent by transferring $7 billion from the general fund. While there was significant support to correct the rescission problem, it was not acted on and, therefore, FHWA is required to take this action. AGC is working to have this rescission corrected when Congress returns from its summer recess. Return to Top

Card Check
Supporters Still Pushing for “So-Called” Employee Free Choice Act (EFCA)
 

EFCA remains in a holding pattern on Capitol Hill at this time.  Right before the August break there were rumors that some movement had been made in finding a potential compromise to EFCA by removing the card check portion of the bill.  The group of Senators seeking to find a compromise are all past EFCA supporters and despite a New York Times article saying that card check had been dropped, no agreements have been reached. 

While the House has the votes to pass EFCA as is at any time, the barrier remains 60 Senators voting to end cloture to move the bill to the Senate floor.  It is important to continue to communicate to Capitol Hill about opposition to EFCA. 

AGC of America has said that compromise is not an option.  There remains deep concerns that even well intended compromise proposal could become a “Trojan horse” that EFCA’s proponents would simply use to sneak EFCA past cloture. Unless and until EFCA’s proponents completely and irreversibly abandon that legislation, the risk of a compromise becoming a “Trojan horse” for EFCA will remain too great for this industry to entertain any discussion of compromise. Return to Top

Health Care
Is Your Company’s Health Plan “Qualified”?
 

As many construction employers are trying to figure out exactly what health care reform will mean for them, one issue that raises questions for employers, insurers and employees alike is that of a “qualified health benefits” plan.  As mentioned in AGC’s What Does a Health Insurance Mandate Mean for Construction Industry Employers, employers will be required to provide a "qualified health benefits" plan for all employees and their dependents or face stiff penalties.  That is, if H.R. 3200, the much-debated proposed bill known as America's Affordable Health Choices Act of 2009, is passed by Congress.

According to H.R. 3200, employers must provide health benefits plans deemed “qualified” by the federal government, or face penalties of up to $100 per day, per employee.  A newly appointed Commissioner of the Health Choices Administration would set many of the standards that would be designed to:

  • Prohibit coverage exclusions of pre-existing health conditions;
  • Require premiums to be determined using adjusted community rating rules, which prohibit insurers from pricing health insurance policies based on health factors;
  • Require coverage to be offered on both a guaranteed issue and guaranteed renewal basis;
  • Impose new, non-discrimination rules; and
  • Comply with a medical loss ratio – the portion of health plan revenue that does not cover administrative or marketing expenses, taxes and profits.

Once deemed qualified, health plans will be able to participate in a newly created, state-run Health Insurance Exchange, similar to Travelocity for the travel industry, which will help individuals and small businesses comparison shop for health insurance.   The Exchange would be regulated by the Commissioner so that insurance companies cannot charge wildly different amounts for similar health coverage.  They will, however, be able to set rates based on age.  Uninsured individuals and employers with 10 or fewer employees would be able to participate in the exchange during year one (2013), while employers with 20 or fewer employees will be able to participate in year 2014.   The Commissioner would have the authority to allow larger employers to participate during subsequent years. 

Although the commissioner would be responsible for setting many of the standards required for qualified health plans, H.R. 3200 specifically details minimum requirements that must be included in each plan before the additional standards are imposed.  These standards would form an “essential benefits package” and would be required to cover:

  • Hospitalization;
  • Outpatient hospital and clinic services, including emergency room services;
  • Services of physicians and other health professionals;
  • Services, equipment and supplies necessary to the services of a physician or health professional in appropriate settings;
  • Prescription drugs;
  • Rehabilitative and “habilitative” services (i.e., services to maintain the physical, intellectual, emotional and social functioning of developmentally delayed individuals);
  • Mental health and substance use disorder services;
  • Certain preventive services (with no-cost-sharing permitted) and vaccines;
  • Maternity care;
  • Well-baby, well-childcare, oral health, vision, hearing services, equipment and supplies for those under age 21.

In addition to the requirement that each plan must cover at least 70 percent of the full value of benefits in the essential benefits package, employers must also contribute a minimum of 72.5% of the premium for the lowest cost qualified plan offered by the employer for individual coverage, and at least 65% for families.  This contribution would be prorated for part-time employees, based on the employee’s weekly hours worked, and out of pocket maximums will be capped at $5,000 for individuals and $10,000 for families.

For employers who currently provide health insurance to their employees, there is a 5-year grace period (beginning 2013) for which employment-based plans could keep their existing coverage and not have to comply with the minimum requirements of the bill.  Upon expiration of the grace period, the plan would have to meet the minimum essential benefits requirements or face all required penalties.  The only exception is for health plans that are subject to collective bargaining agreements (CBA), which are exempted from providing the minimum essential benefits as defined in the bill through the expiration of the CBA or one year after enactment of the legislation, whichever is later.

While the final picture of health care reform is vague, it is likely that employers will have to comply with widespread changes over the next several years.   Before change is mandated, employers should take this time to review its current benefit structure and compare it with the requirement of the essential benefits plan including:

  • Compare actuarial rates and cost-sharing ratios to the proposed mandate;
  • Begin introducing wellness and prevention elements into current plans;
  • Check out what other employers have done to contain cost and partner your employees to do the same;
  • Gradually implement changes during your open enrollment periods now through 2012; and
  • Communicate honestly and often with employees.

Taking the next two years to get ready by gradually moving toward the minimum requirements of the essential benefits plan will soften the blow for employers and employees alike.

For a complete summary of H.R. 3200, read AGC's Facts about the Proposed Health Care Reform Legislation.  To easily contact your congressman with your company's concerns about H.R. 3200, visit AGC's Legislative Action Center today.

* This is one of many articles in AGC's Health Care Reform series. Return to Top

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