Author: Site Staff

Senate Finance Committee Chairman Max Baucus, D-Montana, said that a bipartisan team of negotiators have locked down “two major issues” that will be part of the broad framework for health care reform, but he declined to provide details.

“We’re making significant headway,” Baucus told reporters. “I’m probably more upbeat and optimistic now compared to where we were earlier.”

Emerging from a closed-door meeting, Baucus said the group focused on insurance issues, including cost and coverage questions that have arisen over individual and employer mandates.

Meanwhile, the committee is searching for ways to bridge a $100 billion to $200 billion gap in financing the legislative package, which likely will cost about $1 trillion over the next decade.

Sen. Kent Conrad, D-North Dakota, said that several tax options are being considered, two of which would focus on the subsidies for health care coverage.

“One discussion has been having some levy applied to plans that are worth more than $25,000 a year,” he said, adding that only about 1 percent of plans would apply under that benchmark. “Another option is to have a levy on companies that issue those kinds of plans.”

The latter proposal would not directly affect the individual who has that type of coverage, Conrad said.

The group plans to meet throughout the day on Wednesday, July 22, to review policy and financing options.

Filed by Matthew DoBias of Modern Healthcare, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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The Obama administration has not joined employers in seeking a Supreme Court review of a federal appeals court ruling that upheld San Francisco’s controversial health care spending law.

The administration let pass the July 10 deadline for friend-of-the-court briefs to be filed in the case.

In an e-mailed statement, the Labor Department said the government generally does not file unsolicited briefs at the petition stage.

“This does not mean the Department of Labor or the solicitor general has taken any position on the case. It just means that the government will see whether the Supreme Court asks for the government’s views or grants certiorari,” according to the statement.

However, only a year earlier, the Labor Department filed an amicus brief with the 9th U.S. Circuit Court of Appeals, arguing that the law is barred by a provision in the Employee Retirement Income Security Act that pre-empts state and local rules that relate to employee benefit plans.

“If this court were to uphold the city ordinance, it would expose plan sponsors to the potentially contradictory regimes of numerous states, cities and other localities, and it would require plan sponsors to design and administer ERISA-covered plans in accordance with the dictates of local officials,” the brief stated.

Such a result would “wholly undermine Congress’ evident intent to permit the uniform nationwide administration of employee benefit plans,” the brief concluded.

The brief was filed during the last full year of the Bush administration. Since then, President Obama has expressed support for the San Francisco law.

“Instead of talking about health care, mayors like Gavin Newsom in San Francisco have been ensuring that those in need receive it,” the president said during a February meeting with several dozen mayors.

“I hope that the administration’s failure to file a brief simply reflects its focus on national health reform instead of reduced support for ERISA pre-emption,” said Andy Anderson, partner-elect with Morgan, Lewis & Bockius in Chicago.

The Golden Gate Restaurant Association is challenging the law and several major employer benefits lobbying groups, including the American Benefits Council and the ERISA Industry Committee, have filed amicus briefs asking the high court to review the case and arguing that ERISA pre-empts the San Francisco law.

The San Francisco law that went into effect last year requires employers with at least 100 employees to make health care expenditures of $1.85 per hour for every employee working at least eight hours per week. For employers with 20 to 99 employees, the contribution is $1.23 per hour. Employers with fewer than 20 employees are exempt from the spending mandate.

Expenditures can include payment of group health insurance premiums as well as contributions to health savings accounts, health reimbursement arrangements or to a city fund.

Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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The New York governor’s office has released a key report that evaluates the cost and coverage implications of four health reform proposals.

The long-awaited report, written by the Urban Institute, was commissioned by New York state legislators to provide a road map to extending health coverage to the 16 percent of New York residents who are uninsured.

The report analyzed four choices: a single-payer option called Public Health Insurance for All; the New York Health Plus proposal by Assembly Health Committee Chairman Richard Gottfried; a public-private partnership that simplifies and expands existing public programs and reforms the commercial market; and the free-market Freedom Plan, which relies on regulatory flexibility and tax credits.

The report suggests that a single-payer option for New York might be one of the lowest-cost routes to universal coverage. A more incremental “building block” approach favored by New York Gov. David Paterson was not as economical.

Given the size of New York state and its large uninsured population, the report presents key data that officials from the Obama administration have eagerly awaited. Health care advocates said that there were good reasons why federal officials are said to have pressed New York state to release its overdue report.

“There are clearly important lessons New York has for the national conversation, and it is good this is out in time to be part of that debate,” said Elisabeth Benjamin, vice president of health initiatives at the Community Service Society of New York.

All New Yorkers would be covered by three of the proposals: Public Health Insurance for All, New York Health Plus and the public-private partnership. The Freedom Plan leaves 13.3 percent of New Yorkers uninsured, a small reduction from the current 15.8 percent uninsured.

Public health insurance programs, which currently cover 21.4 percent of the population, would continue to serve significant numbers of New Yorkers under all four proposals, ranging from 100 percent under Public Health Insurance for All to 21.7 percent under the Freedom Plan.

“The report shows how important publicly sponsored health coverage is for health care reform,” Gottfried said in a statement.

The Urban Institute analysis shows that government spending increases under all four plans: by 202 percent under the single-payer proposal (total $86.3 billion); 119 percent under New York Health Plus (total $62.5 billion); 25.3 percent under the public-private partnership model (total $35.8 billion); and 9.6 percent under the Freedom Plan (total $31.3 billion).

But the report also notes that a single-payer system achieves complete coverage with the lowest aggregate change in health care spending ($2.4 billion) and the greatest cost to government per newly insured ($21,287 annually).

The report notes that redistribution of health care spending is inherent in all health care reforms. Public Health Insurance for All and New York Health Plus would increase government spending while generating savings to individuals and employers.

Under the Public Health Insurance for All option, the state’s entire health care system would be funded through government spending.

Total government health care spending would increase by $57.7 billion. But employer spending on health care would be eliminated, saving employers $33.3 billion in aggregate. Individuals would save $22 billion.

Filed by Barbara Benson of Crain’s New York Business, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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Sun-Times Media Group Inc. has skipped paying its quarterly contribution into several employee pension plans.

The parent of the Chicago Sun-Times and dozens of suburban Chicago-area newspapers, which filed for Chapter 11 bankruptcy protection on March 31, failed to make more than $800,000 in required payments to its five pension plans, according to documents obtained by Crain’s Chicago Business, a sister publication of Workforce Management.

The missed contributions, which were due April 15, include:

• $456,185 for a plan covering Chicago’s newsroom employees.
• $284,581 for a plan covering Chicago office employees.
• $63,063 for a plan covering Pioneer Newspaper employees in the suburbs.

A Sun-Times spokeswoman would not confirm those numbers. She also declined to provide figures for missed payments to the company’s two other pension plans.

Companies in bankruptcy proceedings are still required to make contributions to pension plans unless a waiver is obtained from the Internal Revenue Service, said a spokesman for the Pension Benefit Guaranty Corp.

Asked whether Sun-Times Media had made such a request, a company spokeswoman said, “We have complied with all applicable laws in connection with our failure to make pension contributions.”

It’s imperative that Sun-Times Media polish its financials if it’s to woo a buyer; suspending pension payments preserves cash and improves its balance sheet. The company has taken other steps, including layoffs and pay cuts.

Last month, the company reported the moves had succeeded in slowing its burn rate and that its cash balance stood at $25 million.

The missed pension plan payments are not related to the media company’s request to pay its executives hefty bonuses if they succeed in selling the company. Any executive bonuses would be paid with “proceeds from the sale,” the spokeswoman said, and “not one single penny” would come from money that could be used to fund daily operations.

The company is in talks with the IRS to resolve a tax bill of more than $500 million left over from its days of being run by Conrad Black, its now-imprisoned former CEO who was convicted of fraud charges last year.

At a bankruptcy court hearing last week, the Chicago-based media company tabled its proposal to pay executive bonuses until the company comes closer to finding a buyer. CEO Jeremy Halbreich told employees last week that he is making progress on that front, but he did not provide further details.

Filed by Ann Saphir and Lorene Yue of Crain’s Chicago Business, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.