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A view from the Hill on health benefits.

A View from the Hill On Health Benefits

Employee benefits issues currently facing Congress present a rather thorny dilemma. Such questions as whether to mandate health care coverage and how to finance retiree benefits are debated according to partisan politics and conflicting ideologies set against a backdrop of colossal health care costs that makes a timely resolution of these issues imperative. Just how and when they will be resolved was the subject of a special session, "Employee Benefits Issues--The Next Four Years."

According to David Walker, assistant secretary of labor for pension and welfare benefits, former President Reagan probably summed it up best when he said, "Washington is an island surrounded by a sea of reality." You have to get beyond the beltway to really see what is happening, Mr. Walker said, but as far as benefits issues are concerned, he advised that "issues must be considered in the `sunshine' from a balanced short- and long-term approach. They must not be subordinated to other policy decisions."

"We must develop a national retirement income policy," Mr. Walker said. "In addition, we must stabilize and simplify private pension systems, asset reversions and takeovers. It's a critically important area, and we can mold the debate about how such policies are carried out. Through involvement, we can thwart undesirable policies."

Frank McArdle, a consultant and manager of Hewitt Associates, agreed that retiree health benefits will probably be the most active area in the next four years. He believes that under the impetus of the Financial Accounting Standards Board, many private employers may restructure some of their promises. According to Mr. McArdle, that restructuring could include differentiating between retirees 65 years old and over and those under 65.

On the subject of mandated health care coverage, Mr. Walker said that President Bush strongly believes in a voluntary system by which employers design plans that meet their fiscal desires and the needs of their workers. Echoing that sentiment, Win Froelich, minority staff member of the Senate Committee on Labor and Human Resources, said most people who look to the future also see the "shift" in control from employers to their employees. "How different the president's vision is from Ted Kennedy's vision," Mr. Froelich said, referring to the senator's proposal to require employers to offer health care plans meeting minimum standards.

According to Mr. Froelich, after the passage of the Gramm-Rudman Act, which effectively blocked the government from allotting funds to combat health care costs in favor of reducing the deficit, Sen. Kennedy said the onus was on employers to "fix the problem."

In Mr. Froelich's view, the "biggest problem" is that Sen. Kennedy has failed to recognize the malignancy of high health care costs. "We can stem costs without affecting quality," he said.

Mr. McArdle said the reason for mandated health care coverage--the 35 million uninsured people in this country--allows little room for maneuver. "It was interesting for me to note, for example, that in one opinion poll, seven out of 10 people who were voting for George Bush, who was the candidate opposed to mandatory health insurance, nevertheless said that they wanted mandatory health insurance for all workers and their families," he said. "So this does not seem to me to be a truly partisan issue, as much as it is a grassroots issue."

It is hoped that the emergence of such issues as retiree benefits and mandated health insurance can focus a combined problem-solving effort that will cut across party lines and the demographics of who is and is not insured. In the words of Mr. McArdle, "The new diversity of interest in employee benefits also comes hand-in-hand with a responsibility to rethink these programs, and to ensure that they are not left on automatic pilot."

PHOTO : Win Froelich, Senate staffer, and David Walker, assistant secretary of labor, face-off

PHOTO : during the special benefits session. J.A. "Tony" Bridger, incoming vice-president

PHOTO : conference, exhorts attendees to be "Boston Bound" in 1990.
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No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1989 Gale, Cengage Learning. All rights reserved.

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Author:Johnson, Tom
Publication:Risk Management
Date:Jun 1, 1989
Words:657
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