A proposal from a large employers group to institute universal coverage for retirement and health security benefits has some experts wondering if its a ploy to allow employers to rid themselves of the responsibility of providing benefits.
Last weeks unveiling of a proposal from the Employee Retirement Income Security Act, or ERISA, Industry Committeea not-for-profit organization that represents large employersoutlined a plan for employee benefits to be provided through independent benefits administrators rather than through employers. The idea, its proponents say, is to create a more portable benefit that can remain with an employee through job changes.
However, its unclear how the proposal from the committee, called ERIC, would address fundamental issues such as rising medical expenditures or helping the uninsured, said Mila Kofman, an assistant research professor at Georgetown Universitys Health Policy Institute. In her view, the plan will save employers money but will do little for workers and their families.
Under its new proposed structure, benefits would be provided through independent benefit administrators who would compete with each other based on quality, use of information technology, plan design and cost. At a news briefing to release the plan, Michael Stapley, the president and chief executive officer of Deseret Mutual Insurance Company and Deseret Mutual Benefit Administrators, said the administrators could either have a background as a consultant, or represent an institution such as Vanguard or Fidelity.
Each administrator would offer plans for a core set of lifetime security benefitshealth, retirement and short-term savings. Employers would have the option of keeping their current benefit structure or participating in the new system by selecting one or more benefit administrators for their employees and dependents. Since benefits would be separately administered, employees could move to new job opportunities while their benefits stay with the benefit administrator, allowing their new employers to make contributions, ERIC said in its summary of the plan.
Kofman thought this sounded like a way for employers to shed their responsibility to employees. Its similar to what happened with defined-benefit pensions disappearing and workers having defined-contribution pensions instead. Workers have to spend more under defined contribution, she said.
At the news briefing, Mark Ugoretz, ERICs president, said the plan may not come to fruition until after the 2008 presidential elections. By 2009 ... well be able to have a serious discussion on reforming the retiree benefit healthcare system, he said.