Retail Leaders Express Concerns with Senate Health Care Legislation 

In a letter to Senate Majority Leader Harry Reid (D-NV), the Retail Industry Leaders Association (RILA) expressed deep concern that health care reform legislation under consideration in the Senate would exacerbate many of the problems Congress has sought to correct, while also driving beneficiaries from the plans they know and like.

RILA and its member companies are committed to health care reform efforts that control overall costs, preserve the bedrock of employer-based health care, the Employee Retirement Income Security Act (ERISA), and protect employers’ ability to design benefit plans to meet their unique workforce needs. In the letter RILA urges practical changes to the Senate legislation that would protect the quality and affordable benefits RILA members provide.

“Today, as throughout the process, we remain committed to providing key legislative solutions for addressing these significant challenges and hope to work with you to resolve them,” said John Emling, senior vice president for government affairs in the letter sent today.  

RILA members currently provide benefits to millions of employees and their families. However, costly burdens, such as those imposed by the health care reform legislation passed in the U.S. House of Representatives, and the legislation currently under consideration in the U.S. Senate, could undermine economic recovery, cost more jobs for the retail industry and drive employees from the health care plans they currently know and like.

Of concern to RILA and its members are provisions within the Senate bill that would shift costs on to employers to pay for a public plan, reduce benefit design flexibility and innovation, force employers to enroll new employees within 30 days of hire, a provision that would be particularly harmful to high turnover industries, and the bill’s lack of a clear definition for full-time employees.

“Specifically, we believe that the inclusion of any public plan option, placing constraints on self-insured plan design and a lack of recognition for the transient nature of the retail workforce will increase costs for our industry by hundreds of millions of dollars, threatening employer-sponsored coverage in our industry,” said Emling.

RILA will continue to work closely with lawmakers to craft meaningful reform legislation that will protect the retail industry’s ability to continue to offer their employees quality and affordable health care benefits.

RILA is the trade association of the world’s largest and most innovative retail companies.  RILA members include more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales, millions of American jobs and operate more than 100,000 stores, manufacturing facilities and distribution centers domestically and abroad.

Full Letter Text Below

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December 7, 2009


The Honorable Harry Reid         
Senate Majority Leader            
United State Senate             
S-221 Capitol Building     
Washington, DC 20510     

Dear Majority Leader Reid:

I write on behalf of the Retail Industry Leaders Association (RILA), the premiere trade association for the nation’s largest and most innovative retailers, to provide our views on the ongoing efforts to reform our nation’s health care delivery system.  RILA members currently provide benefits to millions of employees and their families, and we remain committed to health care reform efforts that will help control overall costs, preserve ERISA preemption and maintain employers’ ability to craft health benefits to meet the specific needs of their workforces.  In this regard, we are deeply concerned that, far from addressing these issues, The Patient Protection and Affordable Care Act as currently drafted will actually exacerbate many problems beyond the status quo.  

Covering the uninsured and lowering the cost of care for everyone are urgently needed, especially at this time of 10 percent unemployment. Congress simply should not undertake major initiatives that could add significantly to the costs faced by businesses, thus providing a disincentive to the hiring and investment critical to our ongoing economic recovery efforts. We remain open to any options that will bend the cost curve and help more Americans access the care they so urgently need and urge that you consider the proposals outlined in this letter. However, if our concerns are not met, we will be left with no choice but to oppose the legislation and urge that you and your colleagues go back to the drawing board.  

Today, as throughout the process, we remain committed to providing key legislative solutions for addressing these significant challenges and hope to work with you to resolve them. Specifically, we believe that the inclusion of any public plan option, placing constraints on self-insured plan design and a lack of recognition for the transient nature of the retail workforce, will increase costs for our industry by hundreds of millions of dollars, threatening employer-sponsored coverage in our industry. We strongly urge you to consider the following options for reform:

•Public Option. No federal or state public health plan can operate as a fair competitor with the private market because of the government’s distinct advantage as both regulator and provider of care. Further, the medical provider payment rates prescribed in this legislation are lower than market value and, much like we have seen with Medicare and Medicaid will force providers to increase rates on private market plans. These two forces combined could ultimately eradicate the employer-based system of health benefits that has proven to reduce systemic costs and ensure quality, affordable care for millions of Americans.

•ERISA Preservation. Because of the Employee Retirement and Income Security Act (ERISA), all RILA member companies are able to voluntarily offer health care coverage to millions of hard working Americans. We do so to recruit and retain the best talent and to ensure a healthy, productive workforce. ERISA also enables our companies to offer benefits at the lowest possible price, meaning we are able to hire more workers and keep our economy growing. For these reasons, we have concerns about the number of new mandates that would erode or impede upon the existing provisions of ERISA as well as a requirement to offer employees “vouchers” if they opt-out of our health plans, even if those plans meet arbitrary federal standards for quality.

•Part-Time, Temporary and Seasonal Workers. The retail industry proudly employs nearly 15 million Americans, many of whom are from low-income households, or working part-time, temporary or seasonal jobs, and each of whom will be directly impacted by any health reform measure signed into law. RILA has long advocated that special care be taken to address the health needs of persons from low-income households. Health insurance subsidies, targeted wellness programs and other solutions are ways to tackle this very challenge. But, while retailers are willing to continue doing their share to ensure that all our employees have access to affordable health benefits, we are opposed to any unforgiving mandate which levies a penalty applicable to the entire workforce should even one employee fall below an arbitrary threshold.

• 390 Hours of Service to Define Full-Time Work. We applaud you for not requiring employers to offer benefits to part-time employees, many of whom come to work in our stores for discounts, extra spending money, and other perks—not for health benefits. As such, we are vigorously opposed to the House-passed efforts to mandate coverage of part-time employees. However, defining full-time employment as an average of 30 or more hours of service per week will make it difficult to determine which employees truly are part-time or full-time as many work varying hours each week. Additional clarification to define a full-time worker as someone who works 390 hours in a quarter (30 hours per week for 13 weeks) will eliminate any ambiguity about who is considered full-time.
• 90-Day Waiting Period before Auto Enrollment. Many employees enter the workforce for just a few weeks or months, with no intention of staying at a company to make a career. Without a waiting period of 90 days before full-time employees must be enrolled automatically into our companies’ health benefits plans, the resources spent to cover seasonal and other short-term hires will drastically increase the cost of benefits available to those who do stay as well as create a “revolving door” effect of employees going between employer-sponsored and exchange-based plans.  While we appreciate the inclusion of a 30-day waiting period, it is simply neither practical nor workable for our industry.

Thank you for considering these changes to the legislation. We hope that you will work with us to make these important corrections so that we may be in a better position to support a final health reform bill.

Sincerely,

John G. Emling
Senior Vice President, Government Affairs