Health Care
Health care costs and coverage remain a concern for the U.S. lodging industry. Both large and small hotels offer health care benefits for their employees, but the costs of these benefits are rising each year.
- Health care costs for lodging employers are rising each year. Congress’ plans should strengthen the current employer-based health care system and expand alternatives for individuals.
- Health savings accounts are becoming increasingly popular for individuals and businesses and should be expanded through increasing the deductible amounts allowed.
- Small business health care plans make coverage available to more small lodging businesses because they spread the risk and strengthen negotiating power with insurance providers.
Now that President Obama has signed the healthcare bill, what does this mean to the industry? AH&LA and other industry members are currently analyzing the 2,000+ page bill to insure that the industry is able to properly interpret the changes taking affect this year and over the next four years as the bill is slowly implemented. We will post information about the new law and further industry guidance on these pages and elsewhere on the AH&LA Website.
While no formal estimated cost to the industry has yet been released, one industry leader expressed at the March Legislative Action Summit that the new law could cost "$50 million or more" in additional healthcare expenses for industry members.
This March 22 AH&LA Advisory gives a quick overview of the law's immediate effect on lodging industry businesses.
The subject of health care reform is a leading national issue in today’s Washington policy environment. The new Obama Administration and the 111th Congress have made it one of their top priorities.
Hotel workers - unionized and non-unionized alike - enjoy quality, affordable healthcare and a comprehensive benefits package. A 2002 survey of almost 1,900 AH&LA-member properties found that 78 percent of non-unionized, non-management employees were offered medical coverage in some capacity, while 79 percent of unionized, non-management employees were offered the same benefit. About half of those surveyed offered vision insurance, and about one-third offered an Employee Assistance Program.
The 111th Congress is moving forward on healthcare reform. As these debates are scheduled for floor time, there are key ideas that should claim Congress’ focus:
Employer Mandates. Patterned after the program now in place in Massachusetts, employers over a certain size will be required to provide comprehensive health benefits to their employees. In some proposals, employees below a certain level of taxable income would get tax credits to pay their portion of the cost.
Individual Mandate. For those compelled to reduce the number of uninsured, there are proposals for an individual mandate where each person is required to have insurance. The tax credits still apply in these proposals and the other major “pay for” is to eliminate the deductibility of the employer expense. Sen. Ron Wyden (D-OR) and a bipartisan group of about 12 other Senators were opting for this approach in the 110th Congress.
Small businesses are pursuing with Rep. Nydia Velasquez (D-NY), chairwoman of the House Small Business Committee, a proposal that would allow small businesses to form health care cooperatives that would function similarly to high risk pools. They would provide insurance against high cost or catastrophic claims, allowing them to get general coverage at lower premiums. Tax credits for this coverage would also be available.
HSAs and Consumer Driven Health Plans (CDHP). Combining a tax deductible account from which members pay their normal medical costs combined with a “High Deductible Health Policy,” many individual and companies have been drawn to HSAs.
Small Business Health Plans. To make health care more affordable and accessible for small businesses, Congress should consider legislation that would create federally regulated small business heath plans, also known as association health plans (AHPs). AHPs would allow small businesses to join together to purchase health insurance for their workers at a lower cost. This would increase small businesses' bargaining power with health care providers and would give greater freedom in choosing benefit packages. This could lower a small business' health care overhead costs by as much as 30 percent.
Both the House and Senate introduced different versions of their healthcare insurance reform bills: H.R. 3962 in the House, and H.R. 3590 in the Senate.
House: Three House committees -- Energy and Commerce, Ways and Means, and Education and Labor -- held hearings over the summer and early fall. The Democrat's goal is to pass a final bill by the end of the year. Since the early summer, the bills ran into growing opposition by business groups and Blue Dog House Democrats, both of whom are concerned about the bill's massive $1 trillion cost. The House healthcare bill (H.R. 3200, which became H.R. 3962) was released October 29. It faced a full House vote on Saturday, November 7, and narrowly passed 220-215.
Senate: There were two major Democratic health care bills in the Senate. One bill (S. 1796) by Sen. Baucus, chairman of the Senate Finance Committee, would pay for the bill, while the other bill (S. 1679) by Sen. Harkin, chairman of the Senate Health, Education, Labor and Pensions (HELP) Committee, would authorize the government to carry out its provisions. While some provisions, such as a health "exchange" for private insurance options, have found bipartisand support, the most contentious option of a government-run public healthcare insurance option remained in spirited dispute until it was dropped in the final bill. Both bills were voted out of committee and were combined to face a full Senate vote as a single bill (H.R. 3590).
Senate Majority Leader Harry Reid (D-NV) started debate on the Senate's version (H.R. 3590) with a barely successful 60-39 cloture vote on November 22. Given the contentiousness, complexity, and size of the bill, the bill took up most of the Senate's time in December 2009, culminating in a successful 60-39 vote on Christmas Eve, December 24. Many in Washington thought healthcare reform was finished for the session when Massachusetts elected in January 2010 Sen. Scott Brown (R-MA), restoring the filibuster power to Republicans and blocking further action in the Senate.
In an effort to pass healthcare reform and chalk up a legislative victory, Democratic House leaders scheduled action on the already passed Senate bill (H.R. 3590) on March 21 to avoid a Senate filibuster, narrowly passing the bill 219-212 amid rancourous accusations and debate. The bill was signed by President Obama on March 22. In order to make the Senate bill more acceptable to the House, a reconciliation package taking out some of the Senate's provisions was passed the same day by the House and sent to the Senate, which changed it slighly and sent it back to the House on March 25 on a 56-43 vote. The reconciliation bill passed the House March 25 on a 220-207 vote, with President Obama signing this bill into law in late March.
AH&LA is not opposed to healthcare reform, but it has stated it opposes a government-run insurance plan and employer mandates for coverage linked to heavy penalities. The association opposed H.R. 3962, the House healthcare bill, because of its mandates on employers and its high costs. AH&LA has made a vote on this House bill a "Key Vote" in deciding support of candidates in the 2010 election cycle. While AH&LA expressed concern with several key provisions, the association did not take a formal position on the Senate bill in December 2009. AH&LA did oppose the final bill, as stated below.
The conservative Heritage Foundation's coverage on this year's health care legislation can be read here, while the Obama Administration's HealthReform.gov analysis provides statistics on health care spending and what the President's plan proposed to address.
AH&LA Lobbying and Grassroots Outreach
Early in the session, AH&LA asked Congress that these reform principles be included into any healthcare insurance reform legislation:
- Congress needs to ensure reform is bi-partisan;
- Congress should address fraud, abuse and litigation that raises the cost for everyone but does little to improve the health of Americans;
- Congress should allow small business to pool resources across state lines to secure affordable health care coverage for its employees;
- Health care reforms should reduce paper work and duplication of procedures while increasing access to information and technology for patients;
- Reform should be deficit-neutral;
- Reform should support wellness programs and preventative measures;
- Reform should support employer-sponsored insurance;
- Businesses should be encouraged through tax credits and incentives to offer coverage to its employees; and
- Employers should not be discouraged from hiring seasonal, temporary and part-time employees that might trigger disproportionate health care costs.
AH&LA is a member of the Small Business Coalition for Affordable Healthcare. A letter sent to President Obama on April 1, 2009, outlined the coalition's goals. AH&LA issued a memberwide Advisory on July 29, asking its members to contact their lawmakers during the August recess and express their concerns over the existing proposals and their funding sources.
In August 2009, AH&LA sent a letter to the House and Senate stating its support for health care reform, but with reservations about how the package will be financed. The letters archived below stated AH&LA's goals in any health care bill, and at the same time stated its concerns about certain aspects of the proposed healthcare bills, as they currently stand.
House Letter, August 5, 2009 (PDF)
Senate Letter, August 5, 2009 (PDF)
On September 9, AH&LA and 3,700 business organizations, companies, and associations signed a joint letter to Congress asking them to continue to reform their healthcare reform legislation. The letter continued to emphasize AH&LA's oppostion to a government-run insurance plan and mandates for employers to provide health insurance or face hefty fines or taxes.
As part of the lobbying effort against H.R. 3962, the massive $1.2 trillion House health care package, AH&LA and other concerned trade associations as part of the Small Business Coalition for Affordable Healthcare sent a "Key Vote" letter on November 5, 2009, to all House members opposing the bill.
AH&LA opposed the final bill voted on by the House on March 21. The association opposed both H.R. 3590, the "Patient Protection and Affordable Care Act," and its accompanying reconciliation package H.R. 4872, the "Reconciliation Act of 2010." AH&LA sent an Advisory to its membership March 19, opposing the legislation for these reasons:
- Does not allow small business pooling across state lines
- The $2,000 per employee penalty if employer does not cover every employee, including most seasonal employees
- Raises taxes on drug importers and manufacturers that will be passed on to consumers
- Costly and burdensome paperwork and regulatory requirements
- Provides no meaningful tort reform
- Does not provide bipartisan solutions for reform
With President Obama's signature on March 23, the healthcare reform bill is now the law of the land (Public Law 111-148). There is no call to action at this time.
AH&LA continues to actively lobbying Congress and the regulatory agencies to ensure that their member's concerns about healthcare costs and coverage are being addressed in any final legislation. AH&LA has been lobbying on several related industry healthcare issues, calling for healthcare reform to include 1) a 1,000 hour exemption for seasonal employees to not be covered by any employer mandate; 2) an exemption or lighter treatment for part-time employees; and 3) a 90-day waiting period before employees could be covered by employer plans. This is significant for industries such as lodging, which have high turnover rates.
For more information, contact Kevin Maher, AH&LA senior vice president for Governmental Affairs, at (202) 289-3147, kmaher@ahla.com.
(Updated March 2010)