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News Image: Text decoration - bulletPublic Policy Image: Text decoration - bulletMarch 10, 2009

NRF Says Retailers Still Committed to Providing Employee Health Care But Asks Congress Not to Drive Up Costs
For Immediate Relief
Contact: J. Craig Shearman (202) 626-8134
shearmanc@nrf.com 

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NRF Says Retailers Still Committed to Providing Employee Health Care But Asks Congress Not to Drive Up Costs

WASHINGTON, March 10, 2009 – The National Retail Federation told a congressional committee today that merchants are still committed to providing health insurance to their employees, but asked lawmakers not to pass measures that would drive up already high costs for employer-provided coverage and instead adopt comprehensive health care reform initiatives that would reduce costs and expand access to coverage.

“I would like to focus on our shared goal of strengthening the employer-based health care system,” NRF Vice President and Employee Benefits Policy Counsel Neil Trautwein said. “Retailers by and large are still committed to this voluntary system, even in tough times like these. This mix of compensation – both wages and benefits – is a key element of how one employer distinguishes itself from another in attracting employees. But the high cost of care and coverage threatens our future commitment to sponsoring coverage. We agree with President Obama that the current cost trajectory is unsustainable. We must bring health care costs back down to earth.”

Balancing the benefits of providing health coverage to employees with the constantly rising cost “can be borderline impossible even in the best of times, and these are far from being the best of times,” Trautwein said.

Trautwein’s comments came this morning in testimony before the House Education and Labor Committee’s Subcommittee on Health, Employment, Labor and Pensions during a hearing on “Strengthening Employer-Based Health Care.”

Trautwein urged subcommittee members “to be wary of” three proposals for health care reform likely to be considered by Congress: employer mandates, limits on the Employee Retirement Income Security Act (ERISA), and elimination of or a limit on current federal law that exempts health care benefits from being taxed as employee income.

Mandates requiring employers to either provide health insurance or pay into a public health insurance fund would force companies to either reduce the size of their payrolls or cut wages in order to afford the added expenses, Trautwein said. “We can’t afford any new government mandates or minimums on the coverage we offer in the present economy,” he said. “Who will pay the doctor bills if people don’t have jobs?”

Trautwein said ERISA is “the crucial backbone of employer-based health coverage” that allows multistate employers to offer common benefit plans across state boundaries. “We specifically reject the idea that ERISA preemption should only be granted to plans that meet federal minimums on the composition of benefits or the size of employer contributions to plans,” he said. “Unraveling ERISA would take most of those employer dollars off the table, greatly increasing the cost of reform.”

Taxing health care benefits or limiting the amount of health care benefits excluded from taxation could create a public backlash against health care reform that would make reform that much more difficult to achieve, he said.

While NRF opposes employer mandates, retailers would support a mandate requiring individuals to obtain health insurance if it included government subsidies to help workers pay the employee share of premiums for employer-provided plans, Trautwein said. Such subsidies would leverage employers’ current voluntary contributions by encouraging a maximum number of workers to participate. Greater participation – particularly by young, healthy workers – would, in turn, hold down the average spent per employee and reduce employers’ costs.

Trautwein said lowering the underlying costs of health care is the key to making coverage more affordable and reaching the ultimate goal of universal coverage. He urged Congress to consider proposals such as those outlined in the NRF Vision for Health Care Reform that encourage health care providers to compete on cost and quality.

The National Retail Federation is the world's largest retail trade association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet, independent stores, chain restaurants, drug stores and grocery stores as well as the industry's key trading partners of retail goods and services. NRF represents an industry with more than 1.6 million U.S. retail establishments, more than 24 million employees - about one in five American workers - and 2008 sales of $4.6 trillion. As the industry umbrella group, NRF also represents more than 100 state, national and international retail associations. www.nrf.com. 

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