WASHINGTON – A coalition of large employers has proposed a standardized approach for delivering health and retirement benefits.
The ERISA Industry Committee unveiled its New Benefit Platform for Life Security in Washington last month, saying the current uncoordinated system is not achieving satisfactory results for employers or workers.
“The new benefit platform is designed to encourage a national discussion that will result in universal coverage for both retirement and health security,” said Mark Ugoretz, president of the ERISA Industry Committee.
Public and private employers spent a combined $628.4 billion for retirement benefits and $596.5 billion on health benefits in 2005, according to data from the Employee Benefit Research Institute.
The platform includes nine guiding principles and a new approach intended to complement the current voluntary employee benefit system. The platform was developed by a task force that spent two years on this approach.
The framework is intended to be more efficient, control costs and provide more transparency, leveraging information technology to empower consumers and ensure the delivery of high-quality retirement and health coverage.
The platform proposes a new structure for providing benefits through independent benefit administrators that would compete with each other based on quality, use of information technology, plan design and cost. Benefit administrators would be required to offer plans for a core set of “lifetime security” benefits, such as health, retirement and short-term savings.
Under the proposal, employers could either keep their current benefit structures or select one or more benefit administrators for their employees and dependents, or employers could give employees money to purchase benefits independently from local administrators in their markets.
Employees could change jobs in a market and still work with the same benefit administrator serving that area.
In terms of transparency and accountability, the new platform proposes to provide publicly available comparison tools for individuals to asses the quality and cost of providers and health plans. It also calls for a national framework and standards for electronic health information exchange, and it encourages the use of incentives to prod delivery of higher-quality care.
Consumers can participate by qualifying for premium reductions through showing a commitment to improve their health.
“Major restructuring is essential to create a foundation for meaningful change,” said Michael Stapley, president and CEO of Deseret Mutual and chairman of the task force that developed the benefit platform. “Mere tinkering, which has been the practice of the past, will not solve the problems in our retirement and healthcare benefit system.”
Current laws are very complex and contain a number of inherent inefficiencies, Stapley added. Benefit plans are unevenly offered, and health benefits don’t reward individuals who take care of their health.
“The big winner is the American public,” Stapley said. “At the end of the day, they wind up with a fair, equitable, guaranteed system to access health and retirement benefits. That’s a huge change from what we’re currently dealing with.”