Copyright 1999 Federal News Service, Inc.
Federal News Service
MAY 6, 1999, THURSDAY
SECTION: IN THE NEWS
LENGTH:
10797 words
HEADLINE: PREPARED TESTIMONY OF
JAMES
S. RAY
NATIONAL COORDINATING COMMITTEE FOR MULTIEMPLOYER PLANS
BEFORE
THE HOUSE EDUCATION AND THE WORKFORCE COMMITTEE
SUBCOMMITTEE ON EMPLOYER-EMPLOYEE RELATIONS
SUBJECT - THE IMPACT OF
EXTERNAL REVIEW ON HEALTH CARE QUALITY
BODY:
Mr. Chairman and Members of the Subcommittee:
My name is James S.
Ray. On behalf of the National Coordinating Committee for Multiemployer Plans
(NCCMP) and its Chairman, Robert A. Georgine, I thank you for this opportunity
to participate in the Subcommittee's bipartisan hearings on
health care reform issues. We congratulate Chairman Boehner,
Ranking Member Andrews, and all Members of the Subcommittee on your efforts to
examine these vitally important issues.
Health care policy
issues are a major concern of the NCCMP, as reflected in Bob Georgine's service
as a member of President Clinton's Advisory Commission on Consumer Protection
and Quality in the Health Care Industry.
We are
particularly pleased to be invited to describe the essential role in our
Nation's health care system played by joint labor- management,
multiemployer health and welfare plans, commonly referred to as
"Taft-Hartley funds." Tens of millions of American workers, retirees and family
members depend on multiemployer health and welfare plans for
health care coverage. But for these plans, many, if not most,
of these working families would lack health coverage because of
the transient employment patterns and small size of employers in covered
industries.
Multiemployer health and welfare plans are a
success story of the health care system largely because, over
several decades, they have been responsive and adaptable -- e.g., to the
employment patterns and economics of a particular industry, and to the
particular needs and wants of the covered workers. A key to this responsiveness
and adaptability is the composition and authority of a plan's joint labor
management board of trustees, including the essential role played by the board
in resolving benefit claims disputes. That dispute resolution process is
particularly relevant to today's Subcommittee hearing on external review of
benefit claims disputes.
THE NCCMP
The NCCMP is a nonpartisan, national,
non-profit organization of multiemployer pension, health and
welfare plans and their labor- management sponsors. The NCCMP was established in
1975, shortly after enactment of the Employee Retirement Income Security Act
(ERISA), to represent the interests of the multiemployer plan community before
Congress, the various Federal agencies that regulate employee benefit plans, and
the courts. The organization's primary mission is to educate policymakers about
the special nature and needs of multiemployer plans so that employee benefits
legislation and regulation can reflect the best interests of the many millions
of American workers and dependents who support and benefit from these plans. As
declared by Congress, national policy recognizes that the retirement,
health and income security of millions of Americans depend on
the continued existence and well-being of multiemployer plans and encourages the
creation, maintenance, and sound funding of these plans.1 Care must be taken to
protect and nurture multiemployer plans. A well-intentioned legislative or
regulatory change that might seem good policy as applied to some portion of the
health care system could have devastatingly bad, uninhibited
consequences for multiemployer plans and for their participants and
beneficiaries.
The NCCMP's membership includes national, regional and local
benefit plans covering workers in industries such as building and construction,
service, transportation, clothing and textiles, food and commercial, maritime,
and entertainment.
THE SPECIAL NATURE OF MULTIEMPLOYER
HEALTH & WELFARE PLANS
Among the proudest achievements
of collective bargaining is the decades-old, nationwide system of joint
labor-management, multiemployer health and welfare plans that
provide tens of millions of American workers, retirees, and dependents with
medical, hospital, sickness, disability, death and related benefits.
Workers
covered by multiemployer plans are employed throughout the Nation in industries
as diverse as building and construction, retail, food, clothing and textiles,
transportation, mining, services, entertainment, longshoring, maritime, hotel
and restaurant, and manufacturing. But for multiemployer plans, many, if not
most, of these millions of Americans would lack employment-based
health care coverage and would be dependent upon government
programs for their medical treatment or face financial ruin in the event of
accident or illness in the family. The intermittent and mobile employment
patterns of most of these industries would prevent the workers from obtaining
health benefit coverage absent a central pooled trust fund
through which portable coverage is provided to workers as they move from
employer to employer. Moreover, most employers in these industries are small and
would not maintain their own employee health plans,
particularly for transient workers. Workers' Trust Fund
The hallmark of a
multiemployer plan is the involvement of the worker's representatives in the
creation and operation of the plan. The mere fact that multiple employers create
or contribute to a single plan does not make the plan a multiemployer plan. For
example, a "multiple employer welfare arrangement" or "MEWA" is not a
multiemployer plan.2 The unifying force of a multiemployer plan is the labor
union which sponsors the plan and represents the covered workers.
Because a
multiemployer plan is co-sponsored by a labor union, the plan can accept
employer contributions only if it complies with the structural requirements of
the Labor Management Relations ("Taft- Hartley") Act of 1947 3, a federal
statute that predated ERISA by more than 25 years. That is why multiemployer
plans are often referred to as "Taft-Hartley plans" or "Taft-Hartley funds."4
The Taft-Hartley Act requires that a multiemployer plan:
- be
established and maintained in the form of a trust fund, legally distinct from
the sponsoring union and the contributing employers, for the sole and exclusive
benefit of the covered employees, retirees, and their families;
- provide
for equal representation of the covered employees and the contributing employers
in the trust fund's administration (i.e., a joint board of labor and management
trustees must govern the plan);
- not commingle pension and
health plan assets in a single trust;
- be maintained
pursuant to a detailed written agreement with the employers specifying the basis
for contributions;
- provide only certain types of benefits (which include
medical and other health care benefits);
- provide for
arbitration of disputes between labor and management trustees; and
- undergo
an annual financial audit and disclose the audit results to interested parties.
5
These statutory mandates are enforceable under civil and criminal
provisions of the Taft-Hartley Act.6 Contributions to plans that do not comply
with these statutory requirements may constitute a federal crime and are
enjoinable by the federal district courts. 7
As a practical matter, a
multiemployer health plan is established normally by a labor
union and employers of the employees represented by the union agreeing to
establish such a plan to provide health benefits to the
employees and their families. The union, the employers, and individuals
designated as labor and management trustees enter into an "agreement and
declaration of trust" or "trust indenture" which creates the trust fund and
defines the rights and responsibilities of the trustees with regard to the
management of the fund. The union and the employers also enter into one or more
collective bargaining agreements obligating the employers to contribute to the
plan for all employees in the bargaining unit at certain rates for a set period
of time (usually the term of the agreement, which may be one to three years or
longer).8
Over the years that follow the plan's founding, the union and the
original employers periodically renegotiate and enter into new collective
bargaining agreements requiring contributions to the plan. Additional employers
may be negotiated into the plan under the same or different collective
bargaining agreements. A single employer may be obligated to contribute to the
plan pursuant to multiple collective bargaining agreements (e.g., separate
agreements cover employees at different plants or project sites). An employer
may be permitted to obtain coverage under the plan for its nonbargaining unit
(i.e., not union-represented) employees as well as its unionrepresented
employees.9
Some plans have grown to include hundreds of employers
contributing pursuant to hundreds of different collective bargaining agreements
on behalf of thousands of workers in multiple States. Some plans are national in
coverage. Some cover workers in multiple States in a region. Some are statewide.
Some cover the workers of relatively few employers in a local area.
In some
cases, more than one union representing workers in the same industry will
jointly establish a multiemployer plan with a group of employers (e.g., various
building and construction trades unions in an area may form a multi-union,
multiemployer plan covering workers represented by all of those unions in the
area).
Pooled Fund: Portability & Economies of Scale
All of the
collectively bargained employer contributions to the multiemployer
health plan are pooled and invested. It is from this pool that
all of the plan's expenses of operation are paid. It is also from this pool that
benefits are paid to covered workers, retirees and their dependents
("participants" and "beneficiaries," as defined in ERISA 10) to the extent that
the plan is self-funded, and from which premiums are paid to the extent that the
plan's benefits are insured through contracts with insurance companies or (in
the unusual case) benefits are delivered through managed care organizations.
This pooling characteristic of multiemployer plans provides workers with
true portability of health coverage. A covered worker who
changes jobs from one contributing employer to another maintains seamless
coverage under the plan despite frequent changes in employment. The plan
continues to receive contributions for the worker, just from a different
employer.
This portability is essential for workers in industries
characterized by mobile and intermittent patterns of employment, such as
building and construction, entertainment, clothing, and longshoring. For
example, a building tradesman may be employed by a particular employer for only
a day, a week, a month, or a few months to work on a specific project, and then
move on to work on another employer's project for a time, and then another, etc.
Between jobs, the worker might be off work for a day, a week, a month, or
longer, depending on the availability of work. A building tradesman might work
for scores of different employers over his working life, with varying periods of
unemployment in between. In another industry, a longshoreman may work for
several employers in a single day.
Moreover, many multiemployer plan
industries are characterized by small employers 11 which would not maintain a
separate health plan for their employees, particularly
transient workers, because of the costs involved. Participation in a
multiemployer health plan enables these employers to provide
benefit coverage for their workers by simply making contributions and without
the burdens of administering or designing a plan.12
For several decades,
multiemployer plans have been accommodating these employment patterns by
providing a central fund through which portable coverage is provided to workers
as they move from one contributing employer to another. In effect, all of the
contributing employers -- scores, hundreds, or even thousands of employers --
are treated as a single employer for purposes of providing
health and welfare benefits coverage to workers and their
families.
Beyond this internal plan portability, many multiemployer
health plans have reciprocal arrangements with other
multiemployer plans sponsored by affiliates of the same union(s). Reciprocal
arrangements help workers who take employment outside of the geographic area of
one multiemployer plan to maintain health plan coverage if
their new jobs are with employers which contribute to another multiemployer plan
covering workers represented by affiliates of the same union(s). So, for
example, a laborer who participates in a Laborers Union health
fund covering the Northern California-Nevada area may maintain
health plan coverage even if he accepts a job in Albany, New
York with an employer which contributes to the Laborers' multiemployer plan that
covers the Albany area, depending on the terms of the reciprocal arrangement
between the plans.
Even in the absence of a formal reciprocal agreement,
arrangements are made by many plans to accept contributions on behalf of
participants working outside of the plan's jurisdiction. Through these
arrangements, "traveling" participants can maintain coverage for themselves and
their families under their "home plans."
Multiemployer plans also enjoy
economies of scale in administration and enhanced purchasing power with
health care providers, insurers and managed care organizations
not available to individual employers, particularly small employers.
Multiemployer plans are prototype purchasing cooperatives.
Workers' Money
Multiemployer plans are financed by the covered workers through their labor;
that is, through collectively-bargained contributions. While the law considers
these to be "employer contributions," the workplace reality is that these
collectively bargained contributions are substitute wages for labor received.
Instead of putting this money into the workers' paychecks, the employer agrees
to pay it into the multiemployer health plan to finance
coverage for the workers and their families.
The basis for the collectively
bargained contributions varies by industry according to the nature of employment
patterns, cash flow, and financial structures of the industry. In many
industries, like building and construction, the contribution is
dollars-and-cents per hour of work or pay. In other industries, the contribution
is based on units of production, weeks of covered work, or earnings. Who is
responsible for making these contributions (i.e., who is the "employer") is the
subject of special industry rules designed to maximize the collection of
contributions. For example, in building and construction, a general contractor
is often responsible for guaranteeing payment of plan contributions owed by
subcontractors. In the garment industry, manufacturers or jobbers, who have
greater financial stability, typically are required to make the contributions
even though separate firms (contractors) are the covered workers' direct
employers.
In a single employer plan setting, it is common to distinguish
between the employer's share and the employee's share of the
health insurance or plan premium. Cost-sharing and
cost-shifting from employers to their employees are matters of concern. In
contrast, multiemployer plans normally do not think in terms of employer's share
versus employee's share. All of the contributions are workers' money. Employers
do not pay anymore than they would otherwise pay in wages.
Because they pay
the full cost, the workers are well aware of the cost of health
care coverage. The nature of collective bargaining in most multiemployer plan
industries is that the union and the employers negotiate total compensation
package cost; a total per hour labor cost. The workers, through their union,
decide how to allocate the total monetary rate among cash wages, pensions,
health and welfare,apprenticeship and training, and other
benefits programs.
There is an express tradeoff between cash and
benefits. Given the fixed compensation pie, an increase in the contribution rate
needed to finance the health plan means lower cash wages, or a
reduction in the pension plan contribution rate or in some other benefit.
During the mid-1980s to early 1990s, many workers did not receive increases
in their cash wages because health care cost inflation had
driven health plans to demand higher contribution rates to
maintain benefits.
From the plan's perspective, collectively bargained
contributions are the lifeblood; plans cannot pay benefits unless they receive
contributions to finance the coverage.13 Financing depends primarily on two
factors: the amount of covered work that generates the contributions and the
contribution rate. A plan generally receives contributions only for work that is
covered by a collective bargaining agreement requiring contributions to the
plan. If the level of covered work declines, plan income declines. So, for
example, if union construction work in the area of a carpenters
health plan is slower than expected, the plan will receive less
in contributions because the covered carpenters will not be working as many
hours in covered employment.
On the expense side of a plan's budget are
benefit payments (e.g., hospital and doctor bills) for participants and
beneficiaries, or premium payments, and costs of administering the plan. These
expenses are affected by a variety of factors including health
care costs, utilization of plan benefits and regulatory costs.
Over the
years, the labor-management boards of trustees 14, with professional assistance
15, have designed health and welfare programs that balance the
benefit needs and wants of the covered workers with the financing that can be
provided by the collectively bargained contributions. In so balancing the income
and expense sides of the budget, trustees have developed various eligibility
rules, benefit packages, and operational practices for the particular
circumstances of the plan, its participants, and the industry.
For example,
plans have developed various systems for benefit eligibility that are designed
to maximize coverage given the employment patterns in the industry and the
financing needs of the plan. Some systems require a worker to work a minimum
number of hours in a period (e.g., month or quarter) to earn eligibility for the
following period (e.g., the next month or quarter). Some systems include "hours
banks" arrangements under which a worker's covered work hours in excess of a set
level are "banked" and used to obtain benefit eligibility during future periods
of unemployment or underemployment.
So, too, do the benefit packages vary
from plan-to-plan according to circumstances. Given that the plan is financed by
the workers and that one-half of the plan's board of trustees are labor
representatives (usually elected union officers), the tendency is for a board to
adopt the most generous benefit package that the plan can reasonably afford. The
trustees are accountable to the covered workers.
A number of plans offer
multiple levels of benefit packages at different contribution rates. These plans
enable the bargaining parties to select a specific benefit package at a cost
that fits their financial circumstances, and to obtain better benefits over time
as they are able to negotiate increases in contribution rates.
The trustees'
budget balancing may be upset by unexpected declines in contribution income or
increases in cost. At times, a plan may experience both; for example, an
economic recession in the industry may cause a reduction in covered work and,
therefore, contribution income, and may also cause an increase in benefits
utilization by the idled workers. Plans normally take steps to protect against
economic adversity, such as maintaining reserves, obtaining stop-loss insurance,
or insuring some or all of the plan's benefits.
However, these protective
devices may not be appropriate or sufficient in some circumstances such as
hyper-inflation of health care costs or prolonged economic
recession. Trustees have traditionally relied upon other tools to maintain the
plan's viability in times of economic adversity. These tools include adjusting
eligibility rules (e.g., requiring more covered employment for benefit
eligibility), reducing benefit levels, increasing out-of-pocket charges, and
eliminating types of benefits.
Trustees may also request the bargaining
parties to negotiate an increase in the collectively bargained contribution
rate. It may take months or even years to effectuate such an increase,
particularly where the contribution rate is fixed for the term of the collective
bargaining agreement and where the plan receives contributions pursuant to many
collective bargaining agreements with differing expiration dates and terms. Some
bargaining agreements provide for mid-term adjustments in the allocation of the
compensation package so that the union and employer(s) may agree to reallocate a
portion of the wage rate to increase the rate of contribution to the
health plan. Or, they may agree to reduce the rate of
contributions to the pension plan and redirect the amount of the reduction to
the health plan. Or, they may agree that a scheduled wage
increase will be foregone in favor of an increase in the health
plan contribution rate.
In short, unlike a single employer corporate-type
plan, a multiemployer plan cannot simply dip into the corporate treasury when
funding falls short of, or expenses exceed, expectations. The trustees need
flexibility to use a combination of tools to innovatively adapt to changing
circumstances and maintain the plan's financial soundness. Multiemployer plans
have been successfully doing so for decades.
Delivery of Benefits
A
plan's board of trustees, typically, is authorized by the plan's trust agreement
to decide all questions regarding the types and levels of benefits that the plan
will provide, how the plan will provide the benefits, and the eligibility
requirements for benefits. And, as noted, these decisions are based on the
balance between available funding and the needs and wants of the covered workers
and their families.
Among these decisions is whether the plan will
"self-fund" some or all of the benefits, will insure all or some of the
benefits, or will contract with a managed care organization (e.g.,
health maintenance organization) to provide all or some of the
benefits.
Most multiemployer plans, and virtually all large plans, are
"self- funded" in whole or in part. That is, the benefits -- e.g., payment of
hospital and doctor bills -- are paid directly from the plan's assets in the
trust fund, whether paid to the provider or reimbursed to the participant or
beneficiary. Some plans are fully insured; that is, the trustees purchase
policies of insurance from insurers which pay the benefits due under the
policies to or for the plan's participants and beneficiaries. The cost of the
insurance policies (the premium) is paid by the plan from its trust fund. Some
plans self-fund part of their benefits and contract with insurers to provide
other benefits (particularly "welfare" benefits like life and disability
insurance. And, some plans may contract with managed care organizations to
provide some or all of their health benefits.
Whatever the
arrangement for providing the benefits, the plan is the trust fund entity
governed by the board of trustees. An insurer or managed care organization with
which the plan contracts are merely means by which the plan delivers its
benefits to participants and beneficiaries.
The benefits provided by a plan
are set forth in plan documents adopted by the board of trustees and distributed
to participants. To the extent that a plan insures benefits, the contract or
policy issued to the plan by the insurer will reflect the terms of the plan
documents and may be incorporated into those documents. To the extent that a
plan contracts with a managed care organization, the contract will reflect the
terms of the plan. The terms of these contracts and policies with insurers and
managed care organizations are subject to renegotiation by the board of
trustees. For example, if the board wishes to make improvements in the insured
benefits, it so advises the insurer and negotiates with the insurer over the
amount, if any, that the improvement will increase the plan's premium cost. For
the insurer's part, it may negotiate with the board to increase premiums for the
current benefit levels if the claims payment experience has been worse than
anticipated.
Self-funded plans often control the risk of unexpected benefit
claims experience by purchasing "stop-loss" insurance for the plan. Such
coverage typically requires the insurer to compensate the plan if the benefit
claims submitted to the plan in a particular period of time exceed a certain
amount, or if a particular claim exceeds a certain amount. The stop-loss carrier
has no obligation to pay benefits to participants and beneficiaries; rather, its
obligation is to reimburse the plan upon certain events. Accordingly, it is not
considered "health insurance.
" The cost of this
stop-loss coverage is paid by the plan.
Administration
As noted above,
all multiemployer plans are governed by labor- management boards of trustees.16
The individuals who serve as labor trustees and management trustees on these
boards are typically unpaid volunteers.17 Yet, the performance of their
plan-related duties is subject to the standards of fiduciary conduct set by
ERISA, which are among the highest standards known to the law. Violations of
these standards may subject the offending trustees to personal liability for any
losses to the plan, as well as to the removal from his plan position, among
other penalties. Indeed, a plan trustee can be held personally liable for plan
losses caused by another trustee or plan fiduciary under certain circumstances
(e.g., failure to take reasonable steps to correct a breach of fiduciary duty by
another trustee).18
ERISA prohibits plans from indemnifying trustees against
personal liability for breaches of fiduciary duty.19 Plans are permitted to
purchase errors and omissions liability insurance for the trustees, provided
that the insurer has recourse against any trustee for whom it pays a claim.20
However, insurance policies available on the market provide limited coverage in
terms of their liability limits and their exclusions of certain types of
liability.
Attracting and retaining responsible, competent individuals to
serve as trustees, particularly employer representatives, has become more
difficult in the fact of increased regulatory burdens and legal responsibility.
Many are concerned about good faith judgments resulting in personal liability
based on retrospective application of vague legal standards. Yet, multiemployer
plans cannot legally exist without management as well as labor trustees. If
responsible employer representatives are no longer willing to volunteer was plan
trustees, the plans will die.
While the board of trustees is ultimately
responsibility for the plan's management, the plans hire administrators to
conduct the plan's day-to-day operations. Some plans, particularly large plans,
establish their own administrative offices and hire a staff (which arrangement
is referred to as in-house administration or self-administration). Other plans
contract with administrative services companies which perform the plan's
day-to-day administrative functions through the company's (or insurer's) offices
(which arrangements are referred to as third-party administration). And, there
are variations and combinations of these two general types of administrative
arrangements.
Whatever the administrative arrangements, the administrator is
required to perform its functions in accordance with the plan's governing
documents and with the rules and policies set by the board of trustees. The
administrator is responsible to and overseen by the board. Typically, the board
meets periodically to receive and review reports from the administrator (and the
plan's other professional service providers) concerning the plan's operations.
The reports include matters such as contributions received, delinquent
contributions, reserves, investments, benefit payments, benefit denials, and
appeals from benefit denials.
In the case of a plan whose
health benefits are insured, a representative of the insurer
will report to the board of trustees on the benefit claims received, paid, and
denied by the insurer. So, too, where the plan contracts with a managed care
organization to provide some or all of the health benefits, a
representative of that organization will report to the plan's board of trustees
on care provided and care denied, among other matters regarding implementation
of their contract with the plan.
Benefit claims are submitted to the plan's
administrative office, as are eligibility questions. To the extent that the plan
is self-funded and self-administered, claims and questions are handled in the
first instance (and, often, for reconsideration) by the administrative staff.
Appeals from the administrative staff's decisions are taken to the board of
trustees in accordance with procedures set forth in the plan documents. The
board may, as appropriate, use medical advisors when considering appeals based
on medical issues rather than issues of plan interpretation or application.
To the extent that a plan is insured, it may rely on the insurer to make the
initial decision on benefit claims and eligibility, or the plan's administrative
staff and the insurer may jointly make the initial determinations. So, too, the
managed care organization with which the plan has contracted may make the
initial determination on a questions of eligibility or a benefit claim, or may
make the determination jointly with the plan's administrative staff. But,
generally, appeals from these determinations are made to the labor- management
board of trustees. Even where a managed care organization may have an internal
appeals or grievance procedure, the multiemployer plan's board of trustees
retains authority to review the organization's conduct.
These "internal"
claims and appeals procedures are described in more detail below.
Retiree
Coverage
Many multiemployer plans provide health benefits
coverage for workers and retire from covered employment, particularly if the
retiree is receiving retirement benefits from a multiemployer pension plan
sponsored by the same union and group of employers. This retiree coverage
reflects a philosophy on the part of plan trustees and the bargaining parties
that the workers have earned a secure retirement without fear of financial ruin
if they become sick or injured without health benefits
coverage.
Retiree coverage is particularly important for workers who retire
before the Medicare eligibility age of 65 years. In several multiemployer plan
industries, preMedicare eligibility age retirements are the norm. Many covered
workers are engaged in heavy physical labor that wears down their bodies and
drives them from the workforce earlier than the average worker. But for their
multiemployer plan coverage, these workers would be without
health care coverage for 5, 10, or even more years before
becoming eligible for Medicare.
Most plans require the retirees to pay for
plan coverage, but the charge is typically less than the plan's true cost of
providing the coverage. In other words, the plans subsidize the retirees'
coverage from the contribution income generated by the labor of the active
workers covered by the plan.
Accordingly, a plan's ability to provide
affordable retiree coverage is affected by fluctuations in the covered work that
generates the collectively bargained contributions. Retiree coverage is also
dependent upon the continued willingness of the active workers to allow a
portion of the contributions they generate to be used to subsidize the retirees.
Health care for retirees is generally more costly. The cost
pressures on the plan are increased by various factors including earlier
retirements, longer life expectancy, and cost-shifting by the Medicare program
to private sector plans.
CONCERNS OF THE MULTIEMPLOYER
HEALTH PLAN COMMUNITY
Multiemployer health
and welfare plans are models of collective selfdetermination by workers who
responsibly choose to provide for their families' health care
needs. Multiemployer plan participants and beneficiaries like their plans, which
are custom-designed for the particular circumstances of the covered group and
responsive to their concerns.
The multiemployer plan community's core
concerns about the current health care system and any proposals
for change in the regulatory scheme are three-fold: first, the cost of
health care and plan administration; second, maintaining
trustee flexibility with regard to plan design and operations to address changes
in circumstances; and third, attracting and retaining responsible, qualified
labor and management representatives to serve as plan trustees. Policymakers
must be mindful that the Nation's employment-based health plans
are a voluntary system. Employers are not required by law to establish or
maintain employee health plans. In the multiemployer plan
universe, plans depend for their existence on collective bargaining, which is
also a voluntary system. At some point, costs, including regulatory costs,
discourage the creation and maintenance of plans. As recalled by the Supreme
Court on several occasions, ERISA reflects a policy balance struck by Congress
between protecting the rights of plan participants and beneficiaries on the one
hand, and encouraging the voluntary creation and maintenance of plans on the
other.
As observed by the Court:
Thus, unless an employer
contractually cedes its freedom, it is "generally free under ERISA, for any
reason at any time, to adopt, modify,or terminate (its) welfare plan." The
flexibility an employer enjoys to amend or eliminate its welfare plan is not an
accident; Congress recognized that "requiring the vesting of these ancillary
benefits would seriously complicate the administration and increase the cost of
plans." Giving employers this flexibility also encourages them to offer more
generous benefits at the outset, since they are free to reduce benefits should
economic conditions sour. If employers were locked into the plans they initially
offered, "they would err initially on the side of omission."21
Importance of
an Exclusive, Uniform Federal Regulatory Scheme
The multiemployer plan
community strongly supports the uniform, federal regulatory scheme for all
employee benefit plans that Congress intended in enacting ERISA in 1974. The
regulation of multiemployer plans must be the exclusive province of federal law.
State regulation of multiemployer plans would impose unbearable costs and
unworkable administrative burdens on plans that have been successfully providing
health care coverage to millions of Americans for decades.
Moreover, adding State regulation to the already extensive federal regulatory
scheme would crush multiemployer plans.
Many multiemployer plans cover
workers, retirees and dependents in multiple States; some on a regional basis,
some on a national basis. And, the workers covered by multiemployer plans tend
to be highly mobile, crossing State borders to follow the covered employment
opportunities. Even plans that primarily cover local areas have participants and
beneficiaries who work and/or live in other States (e.g., workers who live
across the border from a State where the plan is administered, college students
who go to school in another State, retirees who move to Florida). As recently
observed by U.S. Senator Bob Bennett in explaining his new
health records privacy proposal, Federal regulation of employee
health plans is a must because 50% of Americans live on or near
State lines and States have varying, often conflicting law.22
How could
these plans comply with the varying, conflicting laws, regulations, and
regulatory agency demands of multiple States? And, what would be the cost of
trying to comply? Beyond the additional administrative and professional costs,
plans would be required to conform to State mandates regarding the benefit
packages and other features of plans. Such State mandates burden plans with
unwanted, additional benefit costs. They also deprive plan trustees of
flexibility to meet the benefit needs of the participants and beneficiaries and
the financial needs of the plan. State regulation substitutes the whim of State
legislators and provider group lobbyists for the needs and wants of plan
participants and beneficiaries.
And, then there is the added cost of State
taxation of plans, directly or indirectly. States tax insurers, and they want to
tax multiemployer health plans, too.
The added, unnecessary
cost of State regulation is the main reason why multiemployer plans, like many
single employer plans, have dropped their insurance and become self-funded over
the past 10-15 years.23 In 1985, the Supreme Court opened a loophole in the
federal regulatory scheme by interpreting ERISA's State law preemption
provisions as allowing States to control the content of insurance policies sold
to ERiSA-covered health plans.24 As a consequence, plans that
purchase policies are burdened by a wide range of benefits and other content
mandated by the States 25, as well as by the premium taxes and other charges
imposed by States on insurance products. Only by self-funding can plans avoid
these State-imposed costs because self-funded employee health
plans remain protected by ERISA's preemption provisions.
Unfortunately, the
Supreme Court has opened another loophole in ERISA's scheme that enables States
to, in effect, tax even self-funded multiemployer health plans
by taxing the health care provided to plan participants and
beneficiaries by hospitals and other providers; costs that get added to the
bills paid by plans.26
Such State taxes inflate the cost of creating and
operating a multiemployer health plan. And, in so doing,
discourage health plan coverage. Taxing those, and only those,
who have health plan coverage is counterproductive if our
Nation's goal is universal health plan coverage.
The 1974
Congress that designed ERISA's federal regulatory scheme for employee benefit
plans was quite conscious of and concerned about the counterproductive burden of
State regulation and taxation. As observed by the Supreme Court about Congress'
intent:
"(T)he basic thrust of (ERISA) preemption clause, then, was to avoid
a multiplicity of regulation in order to permit the nationally uniform
administration of employee benefit plans.
(Congress intended) to ensure that
plans and plan sponsors would be subject to a uniform body of benefits law; the
goal was to minimize the administrative and financial burden of complying with
conflicting directives among States or between States and the Federal Government
to prevent the potential for conflict in substantive law requiring the tailoring
of plans and employee conduct to the peculiarities of the law of each
jurisdiction..."27
To require plan providers to design their programs in an
environment of differing state regulations would complicate the administration
of nationwide plans, providing inefficiencies that employers might offset with
decreased benefits.28
Statements by ERISA's sponsors in the House and Senate
clearly disclose the problem that the pre-emption provision was intended to
address. In the House, Representative Dent stated that "with the preemption of
the field (of employee benefit plans), we round out the protection afforded
participants by eliminating the threat of conflicting and inconsistent State and
local regulation." Similarly, Senator Williams declared: "It should be stressed
that with the narrow exceptions specified in the bill, the substantive and
enforcement provisions of the conference substitute are intended to preempt the
field for Federal regulations, thus eliminating the threat of conflicting or
inconsistent State and local regulations of employee benefit plans."
These
statements reflect recognition of the administrative realities of employee
benefit plans. An employer that makes a commitment systematically to pay certain
benefits undertakes a host of obligations, such as determining the eligibility
of claimants, calculating benefit levels, making disbursements, monitoring the
availability of funds for benefit payments, and keeping appropriate records in
order to comply with applicable reporting requirements. The most efficient way
to meet these responsibilities is to establish a uniform administrative scheme,
which provides a set of standard procedures to guide processing of claims and
disbursement of benefits. Such a system is difficult to achieve, however, if a
benefit plan is subject to differing regulatory requirements in differing
States. A plan would be required to keep certain records in some States but not
in others; to make certain benefits available in some States but not in others;
to process claims in a certain way in some States but not in others; and to
comply with certain fiduciary standards in some States but not in others.29
Plainly, the product of the 1974 Congress contained more detailed
regulations of the content of pension plans than it did for
health and welfare plans. For example, ERISA's participation,
vesting, benefit accrual, and funding standards apply only to pension plans.30
However, many other, important protections in ERISA were made applicable to
health and welfare, as well as pension, plans, including the
reporting and disclosure, fiduciary standards, prohibited transactions
provisions, bonding requirements, and enforcement provisions. And, in ERISA,
Congress created a federal statutory vehicle through which additional regulation
of all employee health plans -whether insured or self-funded 31
-- could be imposed if and when Congress deemed necessary or appropriate, as the
health legislation passed by Congress since ERISA's enactment,
including the Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA,
PUBLIC LAW No. 99-272), the Health Insurance Portability and
Accountability Act of 1996 (HIPPA, PUBLIC LAW NO. 104-191 ), the Mental
Health Parity Act of 1996 (PUBLIC LAW NO. 104-204), and the
Newborns' and Mothers' Health Protection Act of 1996 (PUBLIC
LAW NO. 104-204). Critics who discount ERISA's substantive regulation of
employee health plans do not understand the statute.
If
additional regulation of employee health plans is necessary or
appropriate, ERISA, and not State law, is the proper vehicle. It ensures
application to all employee health plans on a nationally
uniform basis.
Cost Shifting Concerns
Multiemployer plans are
concerned about cost because, it is the covered workers who pay these costs and
it can be very difficult for plans to increase their incomes, particularly on
short notice. Boards of trustees have been compelled by cost pressures to
cutback benefits, tighten eligibility rules, and introduce or increase
out-ofpocket payments by participants, among other actions.
Regulatory costs
are particularly controversial because every dollar spent on compliance and
administration is a dollar not available to pay benefits to participants and
beneficiaries.
Importantly, increases in plan costs also exacerbate a
vicious cycle of unfair competition against union employers and workers who
support the plans. In most multiemployer plan industries, the competition among
employers is tight. Non-union employers whose not maintain employee
health plans gain a significant labor cost advantage over
employers which the collective bargaining agreements require contributions to
multiemployer health plans.
This unfair competitive
advantage is multiplied by the shifting to multiemployer plans of the
uncompensated cost of health care provided to
uninsured workers and their families. This cost-shifting is
accomplished through higher hospital and doctor bills for multiemployer plan
participants, as well as through State uncompensated care taxes and assessments.
In effect, multiemployer plan participants are compelled by the system to pay
twice for health care: once for themselves and their families,
and a second time for the uninsured non-union workers who
compete for their jobs.
Imposing additional costs on multiemployer plans
worsens the competitive situation of those workers and employers who are
responsible enough to maintain multiemployer health plans. And,
this causes the loss of covered jobs, which causes a reduction in the
collectively bargained contributions that are the life-blood of multiemployer
plans. This can cause a downward spiral of health plan
coverage.
The Federal Government, too, plays a major role in
health care cost- shifting, particularly through the Medicare
and Medicaid programs. Congress has a record of achieving cost savings in these
public programs by shifting a portion of their costs to employment-based
health plans. Reductions in payment rates for Medicare and
Medicaid providers tend to be recouped by the providers from their privately
"insured"patients. The Medicare Secondary Payor program shifts costs by
requiring employment-based health plans, including
multiemployer plans, to provide primary coverage for Medicare eligible workers.
Government cost-shifting, like unnecessary plan regulation, taxes only those
who have health plan coverage and drives more people into the
ranks of the uninsured whose health care costs are shifted to
the shrinking pool of those with health plan coverage. Given
that our Nation's system of employment-based health care plans
is voluntary, a balance needs to be struck between protections and cost.
Managed Care Reforms
All legislative proposals relating to
health plans trigger the concerns of the multiemployer plan
community. Would the proposal, if enacted into law, increase the benefit or
administrative cost of plans? Would it restrict trustee flexibility that is
essential to adapt a plan to changing economic circumstances? Would it
discourage responsible, competent labor and management representatives from
serving as plan trustees? Would it interfere with the uniform federal regulatory
scheme for multiemployer plans?
Proposals to expand the regulation of
managed care raise these same critical issues.
The threshold point, that is
essential to understanding multiemployer plan concerns regarding managed care
reform proposals, is the difference between a multiemployer
health plan and a managed care organization. The terminology is
critical, but is often confused by policy-makers.
HMOs and other managed
care organizations are commonly referred to as "health plans."
Whatever the appropriateness of this characterization in other contexts, it
causes confusion in the multiemployer plan context. As described above, a
multiemployer plan is distinct from a managed care organization. The plan is the
trust fund governed by the board of trustees which decides what benefit programs
will be provided and how.32
Traditional fee-for-service, indemnity plans and
discounted fee preferred provider networks still predominate in the
multiemployer plan community. It is unusual to see HMOs as the sole or primary
coverage format for a multiemployer plan. However, a plan's trustees may decide
to provide benefits to its participants and beneficiaries through an HMO, a PPO,
or some other managed care organization. To do so, the trustees would normally
follow a prudent decision-making process involving the development of
specifications, the solicitation of candidates, and the selection of the most
appropriate organization. The plan negotiates and enters into a contract with
the selected organization to provide care to the plan's participants and
beneficiaries in accordance with the benefit design and other terms of the plan
set by the trustees.
In shod, the multiemployer plan is a purchaser of the
managed care organization's services.
As a purchaser, a plan's board of
trustees is concerned about the cost of the managed care organization's services
-- to the plan and to its participants and beneficiaries. It is also concerned
about a variety of other issues, such as ability to service the plan's
participants and beneficiaries (e.g., number and location of providers,
including specialists); access to care (e,g., gatekeeper functions); reporting
and communications capabilities; and financial responsibility (e.g., stability
of the organization and arrangements with providers).
If the participants
and beneficiaries of a multiemployer plan are unhappy with the care, other
services, or operations of a managed care organization selected by the plan's
trustees, the trustees will be well aware of this dissatisfaction --
particularly the labor trustees who may be held responsible at the ballot box
for union officer elections.
From this purchaser's perspective, regulation
of managed care organizations to correct abuses or to make those organizations
more responsible and responsive to their customers (multiemployer plans and
their participants and beneficiaries) can be appropriate and helpful. This is
why the NCCMP has expressed support for the Patients' Bill of Rights as
recommended by the President's Advisory Commission on Consumer Protection and
Quality in the Health Care Industry. The rights described
therein are rights that multiemployer plan trustees want, and already
voluntarily provide in large measure, for the participants and beneficiaries of
their plans.
But, policymakers should not confuse multiemployer plans with
HMOs and other managed care organizations.
DISPUTE RESOLUTION
The horror
stories of mistreatment that have driven the campaign for patients' rights
legislation do not involve multiemployer health and welfare
plans. The workers, retirees and family members covered by multiemployer plans
are generally very satisfied with their coverage. Multiemployer plans experience
very few benefit disputes, and most of the disputes that do arise relate to a
claimant's eligibility for coverage by the plan and not to medical issues.
The plans are responsive and accountable to their participants and
beneficiaries for the structural reasons described above. This responsiveness
and accountability is reflected in the procedures used by the plans to handle
benefit claims and resolve disputes.
In the case of the typical self-funded
multiemployer health and welfare plan, claims for benefits are
received from participants or their health care providers by
the plan's administrator. The administrator may be a staff employee of the plan
or a thirdparty administrator (TPA) under contract to the plan. The benefit
claim is examined to determine under the terms of the plan's benefit program
whether the patient is eligible for coverage, whether the service or treatment
received by the patient is covered by the plan, and how much is payable to the
participant or provider. The administer may consult with a medical consultant
retained by the plan or, in the case of third-party administration, the TPA may
consult with its medical consultant, as appropriate for the particular claim.
Payments determined to be due are made. If the claim is denied in whole
or in part, a notice of benefit denial (complying with ERISA's claims procedure
requirements) is sent to the participant.
The participant is entitled to
appeal a benefit denial by submitting a request to the administrator. If the
administrator finds that the denial was erroneous under established rules and
guidelines, the correction is made and the appropriate payment is issued without
further review. Otherwise, the administrator prepares the claim for review by
the plan's board of trustees. The claim review file will include all
documentation received from the patient and care provider, an explanation of the
denial, and all documents on which the administrator relied in denying the
claim.
The board of trustees, as a whole or through a committee of trustees,
reviews the appeal de novo. The trustees have the authority to reverse or affirm
the benefit denial by the administrator, in whole or in part. In reaching that
decision, there are various actions that trustees can and do take, including the
following:
- request further information from the administrator;
-
request further information from the patient or provider;
- request a
qualified medical professional to review medical issues involved in a claim and
provide advice to the trustees;
- reverse the administrator's interpretation
of the plan's rules or guidelines; and
- amend the plan's rules or
guidelines.
At least two aspects of this procedure are unique to
multiemployer plans. First, one-half of the decision-makers -- the trustees --
are patient advocates. The labor trustees are typically elected union
representatives whose interest lies in making the plan as responsive to the
needs and wants of his constituent members as possible consistent with
maintaining the plan's financial soundness.
Second, the board of trustees
has the authority to interpret and amend the plan's rules and guidelines. Where
a claims appeal brings to light a flaw, inadequacy, or inequity in the plan's
coverage, design or operations, the board of trustees can make an immediate
correction that will benefit the claimant as well as all other similarly
situated participants.
In situations where a plan's board of trustees has
contracted with an insurance company to insure some or all of the benefits
provided under the plan, the board may rely on the insurer to alone, or jointly
with the plan's staff, make an initial determination on claims for insured
benefits and to perform the reconsideration function. Similarly, in situations
where a board of trustees contracts with a utilization review firm, a PPO, or an
HMO, those organizations may alone, or jointly with the Plan's staff, conduct
the initial claims determination and the reconsideration function. But,
generally, but the plan's board of trustees remains the body to which claimants
can appeal for review of the insurer's managed care organizations' decisions.
The trustees, in addition to their above-described authority, may reserve by
contract the right to modify the contract or guidelines under which the insurer
or managed care organization is performing its function. And, of course, the
board of trustees can terminate the contract with the insurer or managed care
organization in accordance with its terms.
In short, the board of trustees
or a multiemployer plan plays an essential, positive role in minimizing and
resolving disputes and in promoting participant satisfaction. Legislation that
impedes this well-functioning role of boards of trustees would be
counterproductive for patients' rights.
EXTERNAL APPEALS
Prompt, fair
benefit claims decisions should be the objective of any patients' rights
legislation. The timely reversal of an incorrect benefit claims decision that
enables a patient to obtain or pay for treatment is a better policy result than
timeconsuming, costly litigation that may produce a result long after the need
for treatment has passed.
In concept, "external review" of final plan
decisions by independent, qualified medical professionals would benefit both the
patient and the plan, at least where the decision is based on medical
considerations. The patient would obtain timely review by an independent,
qualified professional. The plan could avoid unnecessary, expensive litigation.
However, as is often the case with good ideas, the devil is in the details.
The multiemployer plan community ha substantial experience with alternative
means of dispute resolution. For example, the Taft- Hartley Act provides for the
resolution of disputes among labor and management trustees through binding
arbitration.33 ERISA, as amended in 1980, provides for the arbitration of
disputes between multiemployer pension plans and employers over withdrawal
liability.34 And, the collective bargaining agreements, pursuant to which
multiemployer plans are established and maintained, commonly provide for the
arbitration of various types of grievances and other contractual disputes as an
alternative to strikes and litigation. However, as often is the case with good
ideas, the devil is in the details of "external review." Many issues have to be
addressed, including:
- Would plans (as well as insurers and managed care
organizations) be required to maintain external review procedures?
- Would
claimants be required to exhaust their external review rights as a precondition
to litigation?
- What types of plan decisions would be appealable to
external review? (Medical as well as non-medical, eligibility decisions?)
-
Would a claimant be required to first exhaust the plan's internal review process
before appealing to external review?
- How many reviewers would be needed
for any particular case?
- Who would select the external reviewer?
- Who
would pay the fees of the external reviewer and the other costs of the process?
- Who would determine whether the external reviewer is independent and
qualified, and under what standards?
What standard of review would the
external reviewer exercise over plan decisions (including whether the reviewer
could interpret or change plan rules)?
- What decision-making procedures
would the external reviewer use? (What procedural rights would the claimant and
plan have?)
- What time limits would apply to the external reviewer? (Would
they be different for retrospective versus prospective or concurrent payment
decisions?)
- Would the decision by an external reviewer be binding? If so,
would it bind both the claimant and the plan?
- Would the decision by an
external reviewer be subject to judicial review? If so, would the review be
limited and differential to the external reviewer (e.g., like court review of
arbitration decisions) or would the court review the claim de novo?
- What
relief could the external reviewer grant if he finds the plan's decision wrong?
- Would the decisions by an external reviewer be precedential (binding as to
future similar claims)?
- Would the external reviewer be subject to personal
liability as a plan fiduciary under ERISA?
The NCCMP would be pleased to
work with your Subcommittee to develop an effective and efficient external
review procedure that addresses all of these and other issues. However, I must
stress that any external review requirement must be Federal, not State. ERISA
Section 503 35, which already regulates internal appeals procedures, would be
the appropriate situs for any external review requirement.
External
review we can live with. We cannot live with monetary damages and wipe out the
health care coverage of the thousands of workers, retirees and
family members who depend on, and finance, the plan.
Thank you.
FOOTNOTES:
1 See Multiemployer Pension Plan Amendments Act of 1980
amendments to ERISA, PUBLIC LAW 96-364, Section 3(a). "Multiemployer plan" is a
term of art, defined in federal statutes, as a pension, health
or welfare plan (1) to which more than one employer is required to contribute,
and (2) which is maintained pursuant to one or more collective bargaining
agreements between one or more labor organizations and more than one employer.
See, ERISA Section 3(37) ,29 U.S.C. Section1002(37); Section 414(f) of the
Internal Revenue Code, 26 U.S.C. Section414(f).
2 See ERISA Section
3(40)(A); 29 U.S.C. Section1002(40)(A)(excluding collectively bargained plans
from the MEWA definition).
3 Section 302(c) of the Act (29 U.S.C.
Section186) prohibits employer payments to unions and to organizations in whose
administration union representatives participate, with certain specified
exceptions. Among the exceptions are pension and health care
plans that meet the structural requirements described herein.
4 A single
employer plan may also be subject to the mandates of the Taft-Hartley Act if a
labor union or its representative participates in the plan's administration.
However, single employer TaftHartley health plans are rare. An
employer may collectively bargain with its employees' union over the content and
operation of the company's employee health plan, but rarely
does an employer agree to involve the union's representatives in the
administration and control of the plan. In contrast, multiemployer plans
typically are established at the request of a union.
5 Taft-Hartley Act
Section 302(c)(5), 29 U.S.C. Section186(c)(5).
6 Taft-Hartley Act Section
302(d), 29 U.S.C. Section186(d).
7 Id.; Local 144 Nursing Home Pension Fund
v. Demisay, 508 U.S. 581 (1993).
8 Multiemployer plans accept all employees
covered by the collective bargaining agreement as they are, subject to uniform
eligibility rules. They do not "cherry pick" the good risks in a bargaining unit
and exclude the bad risks.
9 Coverage of non-bargaining unit employees is
often in response to an employer's concerns that cost-effective
health plan coverage would not be available for these employees
if they are separated from the union-represented group.
10 ERISA Sections
3(7), (8); 29 U.S.C. SectionSection1002(7), (8).
11 For example, in the
construction industry, 82% of contractors have fewer than ten employees. The
Construction Chart Book: The U.S. Construction Industry & Its Workers,
Center to Protect Workers' Rights, February 1997.
12 In the construction
industry, virtually all union-represented workers have health
coverage through multiemployer plans. In contrast, few non-union workers receive
health care coverage through their employment.
13 This
essential link between multiemployer health plan coverage and
receipt of contributions has been recognized by Congress in formulating
legislation affecting plans. See, e.g., Report on the Family and Medical Leave
Act of 1993, Committee on Labor and Human Resources, U.S. Senate, S. Rep. No.
103-3, 103d Cong., 1st Sess. 32-34 (1993).
14 In a few situations, like the
mining industry, the bargaining parties, rather than the trustees, design the
plan.
15 Boards of trustees typically hire actuaries and consultants,
attorneys, auditors, and investment advisors among other professionals.
16
Under ERISA, the board of trustees of a multiemployer plan is typically
the"named fiduciary," "plan administrator," and "plan sponsor." See, ERISA
Sections 3(16)(A), (B), 402(a)(2); 29 U.S.C. SectionSection1002(16)(A), (B),
1102(a)(2).
17 ERISA prohibits use of plan assets to compensate trustees who
are full-time employees of the sponsoring union or contributing employers. See
ERISA Sections 406(a) and 408(c)(2); 29 U.S.C. SectionSection1106(a),
1108(c)(2).
18 ERISA Section405; 29 U.S.C. Section 1105 (co-fiduciary
liability).
19 ERISA Section 410, 29 U.S.C. Section 1110.
20 Id.
21
Inter-Modal Rail Employees Assn. v. Atchison, Topeka & Santa Fe Railway Co.,
520 U.S. 510, 515 (1997), citations omitted.
22 How Can Congress Protect The
Privacy of Personal Medical Information, Health Care Policy
Briefing, ROLL CALL, April 12, 1999.
23 See generally Employer-Based
Health Plans: Issues, Trends, and Challenges Posed by ERISA,
General Accounting Office Testimony, July 25, 1995 (GAO/T-HEHS-95-223);
Self-lnsurance Is Working, 142 Cong. Rec. E237 (daily ed., February 28, 1996).
24 Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724 (1985).
25
Reportedly, there are more than 1,000 State mandated benefit laws applicable to
health insurance policies.
26 New York State Conference of
Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645 (1995)
(ERISA not preempt State law requiring hospitals to collect surcharges from
patients covered by commercial insurers and ERISA-covered plans); DeBuono v.
NYSA-ILA Medical & Clinical Services Fund, 117 S.Ct. 1747 (1997) (State tax
on gross receipts for patient services at hospitals and other
health care facilities not preempted by ERISA as applied to
medical centers operated by selffunded multiemployer health
plans).
27 Travelers, supra, 514 U.S. at 650.
28 FMC Corp. v. Holliday,
498 U.S. 52, 60 (1990).
29 Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 9
(1987) (citations to Congressional Record omitted).
30 ERISA Sections 201
and 301; 29 U.S.C. SectionSection1021, 1031.
31 ERISA generally covers all
employee welfare benefit plans without regard to whether they are insured or
self-funded. See ERISA Sections 3(1), 4; 29 U.S.C. SectionSection1002(1), 1003.
32 This distinction is similar to the distinction between employee benefit
plans and insurers made in ERISA as originally enacted (see, ERISA Section
514(b)(2), 29 U.S.C. Section1144(b)(2)) and in the 1996 HIPPA amendments to
ERISA (see, ERISA Sections 701(a), 731; 29 U.S.C. SectionSection1181(a), 1191,
distinguishing "group health plan" from
"health insurance issuer").
33 29 U.S.C. Section186(c)(5).
34 ERISA Section 4221; 29 U.S.C. Section1401. 35 29 U.S.C. ,(,1133.
END
LOAD-DATE: May 8, 1999