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And The Hits Just Keep On Coming

Never before in U.S. history have the tentacles of the federal government reached so deeply into our free-market economy as they do today. Car companies. Banks. Insurance companies. Pretty big deal in a capitalist country where the national government is constitutionally one of enumerated powers. Trouble is no one seems able to cite the provision of the U.S. Constitution that empowers the federal government to manufacture cars, issue certificates of deposit, or cover your life, house, car and boat.
 
So now that our Constitution is in shreds, what’s next on the big-government “hit parade” of the Obama Administration and the 111th Congress of Speaker Nancy Pelosi and Senate Majority Leader Harry Reid? As our last column pointed out, health care is in the queue. Committees of both houses of Congress are hustling to write and report comprehensive reform bills as quickly as possible; the Senate Health, Education, Labor, and Pensions (HELP) Committee by the rapidly-approaching fourth of July recess and the Senate Finance Committee and the three House committees of jurisdiction as soon as possible thereafter, get them passed in their respective houses by the August/Labor Day recess, and reconciled and on the President’s desk for his signature this fall. The health care sector, at $2.3 trillion per year, is about 16% of the economy. So this is a big deal too … a mega-deal in fact … and one would think getting it done right would trump getting it done quickly. And it’s not just that they want government to have an even larger hand in effecting how health care works … they want the government to be a full-fledged “competitor” in the health insurance business, with a federally-run “public plan option” challenging private health plans in the marketplace.
 
It doesn’t end there … not by a long shot. It sure looks like comprehensive health care reform legislation will include an employer “pay or play” mandate, which is a short-hand way of saying all employers covered by the mandate will either have to provide and help pay for a certain level of health benefits for their employees or pay some sort of penalty or tax. The recently-unveiled draft of the House bill contains an employer mandate; key Senate Democrats in the health care reform debate want to do this and the President’s on board.
 
Senate Republican Leader Mitch McConnell (R-KY) summarized very well the goings on under the Capitol dome and in the White House in a recent speech on the Senate floor: “Over the last few months, we’ve seen government getting involved in virtually every aspect of our economy. Washington is suddenly running the banks and the auto companies. Now it’s thinking about running Americans’ health care.” Hey … how have the postal service, Fannie and Freddie worked for ya?
 
NAW has been aggressive in bringing the hopes and concerns of the wholesale distribution industry to policy makers on both sides of the partisan divide on Capitol Hill throughout this process and will continue to do so going forward. But this one’s ultimately going to be decided by the “folks back home” and given these dynamics and what’s at stake in the health care reform debate for employers, now would be a very good time to contact the U.S. Senators and Representatives from every state and district in which your company has a facility to express your support for comprehensive health care reform legislation that controls costs, expands coverage and improves quality within a reformed free-market health care system. To do so, click on the “TELL CONGRESS” button in the top right corner of your screen. You will be linked to our “Take Action” E-Alert Program. Click on “Contact Congress: Get Healthcare Reform Right.” Easy to follow instructions, including talking points, will take you through the rest of the very quick process.
 
Regrettably it doesn’t stop with the 5 M’s … Mail, Mortgages, Money, Motown and Medicine. Nope … now the feds want to dig a little deeper into a sixth; the Management of just about every employer in America. The latest is the pleasantly-named “Healthy Families Act,” or “HFA” for short. HFA is a federal paid sick leave mandate on employers of 15 or more workers. And yes, that is smaller trigger than the Family and Medical Leave (a/k/a Parental Leave) Act which has a 50-employee cut-off. Why the difference? No one can say.
 
If your company already offers paid sick leave to your employees you may think that’s not so bad. And according to NAW’s 2008 Employee Compensation Survey, virtually all wholesaler-distributors offer both salaried and hourly full-time employees five days of paid sick leave. But if the HFA becomes federal law, that won’t be good enough. HFA requires covered employers to allow all of their employees to accrue one hour of job-protected paid sick leave for every 30 hours worked, up to 56 paid sick leave hours – 7 days. Workers begin accruing paid sick immediately, can begin taking it after 60 days on the job and as it’s accrued after that. Employees could take paid sick leave intermittently, and unused leave is carried over. How do these features of the HFA square with your paid leave policy? What will a 40% increase in paid sick leave cost your company, and how will it affect productivity?
 
It doesn’t stop there. Eligible workers can draw on their paid sick leave for a wide range of conditions involving not only themselves, but a broad cast of other people (certain close family members or “any other person related by blood or affinity whose close association with the employee is the equivalent of a family relationship”). It should come as no surprise that the ability of employers to regulate the use of paid sick leave is pretty limited.
 
The HFA could be on a fast track in the House. Congresswoman Rosa DeLauro (D-CT-3) introduced the bill (H.R. 2460) on May 18th with 101 Democratic cosponsors (it now has 105), and the Education and Labor Committee’s Workforce Protections Subcommittee held a hearing on the bill on June 11th. All of the subcommittee’s Democrats are among the 17 of the full committee’s 29 majority Democratic members who are cosponsors of the bill. Ms. DeLauro has even hinted that she’d like to see the measure included in comprehensive health care reform. Senator Edward M. Kennedy (D-MA), Chairman of the HELP Committee is the sponsor of the Senate bill (S. 1152). 20 Senate Democrats are cosponsors, including seven of his 11 majority HELP colleagues. This is known to be one of the Chairman’s favorites, so we can expect the HELP Committee to soon give serious attention to the HFA.
 
NAW strongly opposes the Healthy Families Act and has joined with our colleagues in the National Coalition for the Protection of Family Leave (NCPFL) in a letter to the chairmen and ranking Republican members of the Senate HELP and House Education and Labor Committees expressing our opposition and outlining key concerns with the legislation. While this issue is certain to be the subject of an intense lobbying effort by NAW and our business community allies, Senators and Representatives will need to hear loud and clear from employers in their states and districts if we are to have any chance of prevailing on this one.
 
Health care reform and the HFA are two employee benefits issues likely to see serious action and even enactment this year; they are not, however, the only benefits-related bills of which employers should be aware. Among the others are bills to create a paid FMLA leave program, to expand the coverage of the FMLA to employers with 25 employees and to extend FMLA benefits to part-time employees. And last but not least, our favorite is a bill authored by first-term Rep. Alan Grayson (D-FL-8) to establish a paid vacation mandate. It shouldn’t surprise you to learn that the vacation mandate is sponsored by the Congressman from … where else … Disney World! After all, as the late Speaker of the House Tip O’Neill was fond of saying, “All politics is local.” This one ought to be a hit in the “Magic Kingdom.” And for the rest of us, the “hits” just keep on coming.