Sheet Metal & Air Conditioning Contractors’ National Association


Pension and Health & Welfare Experts at the National Issues Conference

Pension Experts: Keep Pushing for Meaningful Pension Reform

Pension and health care experts discussed the status of pension and health care reform on the first day of the 2017 CEA National Issues Conference in Washington, May 2-4, and what changes would be beneficial to building trades contractors.

Pension experts, Cary Franklin, managing consultant and actuary with Horizon Actuarial Services, and Joshua Shapiro, senior advisor, Groom Law Group, stressed the importance of continuing to push Congress for meaningful pension reform.

“You want to solve the problem, which is the stability of the system,” Mr. Franklin said.

Mr. Franklin discussed the risks inherent in multiemployer retirement plans, which include employer liability for excise taxes, legacy costs, and withdrawal liability. Traditionally, employers bore most of the risk with their labor counterparts also bearing some of the burden because required increases can, in part at least, be allocated out of wages, he said.

However, the instability of unpredictable investment returns can increase multiemployer retirement plans’ risk and may imperil the whole system, he noted. “We must be prepared to deal with near-term downturns in the market,” he said.

Congress needs to give labor and management the tools to do that, agreed Josh Shapiro, by finishing what was started with MEPRA, the Multiemployer Pension Reform Act of 2014. Plans need to be able to “bank the gains” of a good market and not give all of it to benefit increases, he noted.

Proposed health-care bill could alter essential benefits

Carolyn Smith of the law offices of Alston and Bird, and Aruna Vohra, senior counsel and actuarial advisor with Horizon Actuarial Services, spoke about the proposed health care legislation, the American Health Care Act of 2017 (AHA), then pending before the U.S. House of Representatives.

The legislation would later be passed by the House and the proposed bill is now with the Senate. Ms. Vohra noted that to bring the House Freedom Caucus on board with the AHA, which was needed to get sufficient votes in the House, the AHA had to be modified in some significant ways.

Changes to the bill included altering provisions on the ten essential health benefits, which are currently mandated by the Affordable Care Act (ACA). The AHA would give states the flexibility to vary or waive the required essential health benefits.

Ms. Vohra said critics of the AHA have created a ruckus over the bill, which allows states to permit insurers to exclude pre-existing conditions. The AHA allows insurers to deny coverage for pre-existing conditions if an individual has a lapse in coverage of greater than 60 days. Insurers could also charge more for people with pre-existing conditions, possibly so much that coverage is going to be unaffordable for people, critics claim.

The AHA is expected to undergo significant changes in the Senate. Ms. Smith believes that what is missing in the current version of the AHA, as well as with the current ACA, are measures to bring the cost of care down. There is a real need to control the cost of prescription drugs and medical care, she said. Until that is addressed, affordable health insurance will remain difficult to achieve, she noted.