Reps. Nolan and McKinley Announce Bipartisan Bill to Save Health Care Costs for Businesses and Workers

[WASHINGTON, D.C.] –U.S Reps. Rick Nolan (D-MN-08) and David B. McKinley (R-WV-01) announced today new bipartisan legislation to save middle-class working families money by fixing a burdensome cost associated with the Affordable Care Act (ACA).

The bipartisan Health Care Fairness and Flexibility Act (H.R.4735) implements a 3-year delay in the ACA’s “transitional reinsurance program” that would have forced additional costs onto working families – up to $252 this year for a family of four – and subjected employers who self-insure to expensive insurance fees.

This reinsurance program, designed to run from 2014 until 2016, was intended to steady the cost of health care premiums for individuals. All insurance companies would be charged a yearly fee, repaid to only those insurers who cover people with very high medical bills.

However, businesses that are self-insured or have multi-employer health plans – such as large employers and unions – are required to pay the fee for each person they cover, even though their covered employees do not participate in the new health care exchange, and therefore do not benefit from the reinsurance program.

Furthermore, the reinsurance fee is entirely based upon estimated costs of the program, meaning these businesses may even be overcharged for a program that does not affect their employees. This year, the fee has been set at $63 per person. ALLETE, an Upper-Midwest energy provider headquartered in Duluth, MN, expects to pay at least $76,000 in fees this year.

H.R.4735 addresses this problem by delaying the fee, without delaying the program itself, giving employers more flexibility and time to comply with the law, and reducing the total cost of the program.

“The Affordable Care Act was the first step – not the last – in reforming our nation’s health care,” said Rep. Nolan. “Now we roll up our sleeves and fix what needs fixing. I’m proud to offer a bipartisan, common-sense solution to alleviate some of the concerns of businesses and workers in Minnesota and across the country – freeing employers to focus on hiring more people and putting money back in the pockets of hardworking, middle-class families.”

Said Rep. McKinley: “The ‘belly button’ tax unfairly punishes organizations that provide good health insurance. For a family of four the tax will cost more than $250 each year. Someone has to pay those costs, and it will either be passed on to employees or cause employers to drop insurance. Congress and the Administration have already delayed numerous harmful parts of the Affordable Care Act, and should do the same with this unfair tax.”

Dave McMillan, Senior Vice President of External Affairs at ALLETE, an Upper-Midwest energy provider employing 1,500 people headquartered in Duluth, MN, had this to say about H.R.4735:

“This bill addresses major flaws with the reinsurance program’s design, taking a common-sense approach to assure that the program is still funded while making sure that the fees collected are based on actual costs. ALLETE applauds Representative Nolan for introducing this bill with Representative McKinley and working in a bipartisan manner to move it through the House of Representatives.”

Paul Vitrano, Vice President of Global Government Relations at Polaris Industries Inc., a manufacturer of snowmobiles, ATV, neighborhood electric and defense vehicles, with a facility in Wyoming, MN, is supportive of the bill:

“While healthcare coverage for all Americans is an admirable goal, Polaris remains concerned that provisions of the ACA such as the transitional reinsurance program do not take appropriate accountability for the additional costs to employers who already seek to provide high-quality, low-cost health insurance options to their employees.  As a self-insuring employer, Polaris thanks Reps. Nolan and McKinley for proposing this important legislation.”

Jim Hynes, Chairman of the HealthWORKS Coalition, which represents employers and health plans that provide high-quality health care to more than 200,000 workers and their families in Minnesota, offered the following statement in support:

“On behalf of the hundreds of thousands Minnesota workers and families represented by the HealthWORKS Coalition, we want to thank Congressman Nolan and Congressman McKinley, not only for their bipartisan leadership on this issue, but also for working across legislative bodies to build on the bipartisan efforts already underway in the U.S. Senate to pass this bill. We proudly support the Nolan-McKinley bill as a common-sense solution to an expensive and unfair reinsurance fee that multi-employer health plans and self-insured employers will never benefit from. Thanks to Congressman Nolan and Congressman McKinley’s leadership, we have a bill that will allow us additional time to find ways to pay for the significant costs without putting the burden on working families.”

Sens. Al Franken (D-Minn.), Amy Klobuchar (D-Minn.), and Mark Kirk (R-Ill.) have introduced identical companion legislation in the Senate. More information about H.R.4735, the Health Care Fairness and Flexibility Act is here.