-: Well, thanks so much Chelsea and welcome everybody.
I think it is pretty safe to say
that the last 48 hours had been quite a whirlwind.
Perhaps some of us have felt like it was less of a whirlwind
and sometimes kind of walking around
blindfolded in a big cave
and you don't quite know where the end is
but hopefully today's webinar will help bring some clarity
and some light to perhaps where there is some darkness
at least certainly with respect
to our employee benefits and HR industry.
So, we're so pleased that you could join us
and I promise that we will do our very best
to bring you some additional knowledge and insights
to help you think about how the last 48 hours
and the next few months may impact your organizations
and your plans.
To give us some light where
there may feel like there's a little bit of darkness
Segal partnered with the American Benefits Council
to bring you this post-election webinar.
And Jim will also be talking a little bit
about an election night poll that we'll be discussing
in a little bit as well,
that I think will hopefully
also add a little bit of insight.
And today in terms of our agenda
what we hope to do was first of course, welcome all of you,
which hopefully we've already done.
Talk a little bit about the election,
kind of where we are today,
what we think we can be expecting over the next few days,
few weeks, few months, and then gather some insights
on some of the issues that we may wanna be thinking
a little bit harder about in terms of the process piece
of the election.
Then Jim is gonna take out his lab coat
and talk a little bit about Congress
and sort of some of his formulas
for how we may see some legislation
that may or may not impact our industry
depending on how the numbers shake out.
Then we'll kinda pivot a little bit
and talk specifically about our health policy agenda
and our retirement policy agenda.
Again, depending on how the numbers shake out
ultimately in the election.
And then finally,
we're gonna answer your questions
of which we suspect there are plenty,
again, as Chelsea mentioned please feel free
to start putting your questions into the chat room
as quickly as you think of them.
I will hopefully be able to moderate a little bit.
We can get a little bit of discussion going on
so that we can get as many of your questions answered
as we can.
And we promise to save some time at the end to do so.
So, with that said
let's maybe turn our attention to the speakers for today.
And so the beacons of the light
that will guide us through all of this
starting from the left is Kathy Bakich
who is Segal's national health compliance practice leader
and certainly one of the country's leading experts
on employer sponsored health coverage
and someone I've had the pleasure of knowing
for over two decades.
And it's such a pleasure to work with you Kathy.
Next to Kathy on the slide is the inevitable Jim Klein
who is the president of the American Benefits Council.
Welcome Jim, and thank you again so much
for partnering with us.
For those of you that don't know Jim,
he joined the council back in 1988
and has held a variety of different roles
within the council and is currently president.
And really for those of us that are in the industry
we all know Jim, he's really widely regarded
as one of our industry's foremost public policy leaders.
And as always, we thank you for your leadership
and all of ABC
for being such an outstanding trade association
to plan sponsors across the United States.
And certainly finally we have Serena Simons.
No relation, although I feel like we are partners in crime.
Segal's national retirement compliance practice leader
and Serena really comes to us with unbelievable expertise
over 20 years of experience working with employers
and plan sponsors on all walks of life
related to pensions and other retirement plan issues.
So, as you can see,
we have an unbelievable action packed
and unbelievable group of experts.
In case I may not know you personally,
my name is Tami Simon
and I'm privileged to be the moderator for today's call.
I'm Segal's corporate consulting business leader.
And hopefully as most of you know,
Segal's been providing full service employee benefit
and HR consulting for over 80 years to plan sponsors
and employers of really all industries
including multiemployer funds, corporations, public sector,
higher education, nonprofits, and many, many others.
So, we really do welcome you and also welcome
all of American Benefit Councils members
who were able to join us today.
So without further ado,
I'd like to turn the mic over to Jim Klein
to get us started on the first issue,
where we are today in the election.
So, Jim.
-: Thank you so much, Tami,
and thanks, not just for inviting us
to partner with you on today's webinar
but for all the support that you, Kathy, Serena
and the whole team at Segal give us here in Washington
for our advocacy on behalf of plan sponsors.
Your expertise is absolutely invaluable.
With regard to the presidential race,
what more can I add beyond what we're all hearing 24/7?
I would only mention the following point that it's clear
that there are already many lawsuits being filed.
I would just say for those who have speculated to me
and to others that given the more conservative tilt
of the Supreme Court, and there is justice being confirmed
and all the rest of that,
people are thinking that
when it ultimately arrives at the Supreme Court
which it will, that it's gonna necessarily come out
in favor of the incumbent president.
I would only point out that I think
that the Supreme Court has indicated
with some of its preliminary rulings,
that's the last couple of weeks,
to say nothing of the Bush V Gore decision back in 2000
that they would give a lot of deference to the states.
So if a state, secretary of state
certifies Vice President Biden as the winner in that state,
I don't see the Supreme Court overturning that
absent some extenuating circumstances
such as there being election in Pennsylvania for example,
where they did not change the rules
according to what is prescribed
or at least it's alleged that way.
So, I think we can all sort of breathe easy
that I think the judicial process,
however it comes out will be fair.
I do wanna turn attention though
to the congressional elections
which are the real surprise here
and the fact that the Democrats really underperformed
in both the Senate and the House.
Of the 35 senate seats that were up for election this cycle,
the Republicans were defending 23 of them,
the Democrats just 12.
So, it looked at another way.
The Democrats had twice as many opportunities
as Republicans did to pick up a seat from the other side.
And the fact that they may pick up only one or two perhaps,
is clearly a disappointment to them
just as it was to the Republicans two years ago
when the roles were reversed.
You know, the House I think is the real surprise
because Democrats were certainly,
as were all the pundits expecting a pickup
for the Democrats.
And in fact the reverse is true.
And I think it's particularly interesting
given that when all the dust settles,
Vice President Biden will have probably gotten
three and a half to 4 million more popular votes than Trump.
And I think that probably speaks to the impact
of gerrymandered districts as much as anything else.
Last point I guess I would make is that
we need to keep in mind that there will be at least one
and possibly two runoff elections on January 5th
in the state of Georgia.
So, we really may not know the final composition
of the Senate until then.
Next slide.
So, Congress and chemistry,
and I mean, this sort of in a,
obviously in rather literal and figurative way,
Congress is gonna be coming back
for it's a traditional post-election
so-called lame duck session of Congress
within the next couple of weeks.
They also have to act by December the 11th
to continue funding for government operations.
That could be a big standoff
if Donald Trump decides to sort of once again make a stand
with respect to funding for the wall on the Southern border
and things of that nature.
I would say that the outcome of the election
with the Republicans apparently being in control
of the Senate,
gives a little more prospect
that there could be something substantive
taking place during the lame duck session
because they know that essentially
the alignment in Congress will be the same next year.
So why not dispense with certain things
that would be expensive to do or otherwise difficult to do?
Had there been a full Democrat
probably we would see no incentive on the part
certainly of the Democrats to act now,
but rather to wait till next year
when they would have the White House
and both houses of Congress.
Having said all of that, as you can imagine,
emotions are incredibly raw
and the path of least resistance
may be to simply get a funding bill over the finish line
for a few months to give them some breathing space
and not take up much of anything that's substantive.
I wouldn't expect obviously one big, big, big variable
in all of that is what might happen
either from a health perspective or economic perspective
with respect to the pandemic.
And God forbid that things get even much worse
that would perhaps put some more pressure
on Congress and the White House
to do some form of a COVID relief measure.
I don't think that we should expect in the next year,
assuming that Vice President Biden is the president,
things to act with great speed among other things,
it always takes a while to get a cabinet secretaries
and a host of other important political appointees confirmed
that is gonna take even longer
in a Republican led Senate
committees after it get organized
and so things just take awhile
at the beginning of an administration.
In terms of my chemical formula,
you can see it there so I won't read it,
but just to translate it,
what it is is a Democrat controlling the White House,
plus the Democrats controlling the House of Representatives
minus whatever the Republican controlled Senate
would take away from them,
leads to regulatory action to the 10th degree.
The same kind of gridlock that we have seen
these past couple of years with a split Congress
has resulted in an enormous amount of regulatory activity
because after all that's the way that the executive branch
can put their imprint on policy
in the face of legislative gridlock.
So, we should probably be expecting that to continue
through next year under a Democratic administration.
And obviously the corollary is true as well.
If you had a Republican in the White House
and split houses of Congress,
it happens that way as well.
Next slide.
-: One quick question for you, Jim,
while we're getting to the next slide.
In the situation where there's a democratic sweep,
and I know that some of the numbers
for the senators still coming
any comments on filibuster?
I know there's been a lot of conversation about that
in the news.
-: Yeah. So let me, I'm glad you asked that actually
'cause it reminded me of something else I wanted to share.
Well, we, let's assume things end up 51-49
for the Republicans as its strongly looking at Mike.
While we shouldn't expect there to be a change
over the course of the next couple of years,
it's important to keep in mind that over the last few years
we have seen changes in the Senate,
at least three senators that I can recall departed,
Senator Franken for reasons of a scandal,
Senator McCain passed away,
Senator Isakson had to resign for health reasons.
In all three of those instances,
either the governor of the state
from which they were was of the same party
or the state law required the replacement senator
to be of the same party
but that is not true everywhere in the country.
And so in a scenario like that,
where it all of a sudden becomes 50-50 a year from now
then the Democrats actually have a sweep.
So, the notion that we'll have this gridlock inevitably
does not necessarily hold true.
On your question about the filibuster.
This of course is the mechanism
by which the minority party
can block the majority parties agenda
because for most pieces of legislation
you need a super majority of 60 votes
in order to overcome this filibuster, this blocking effort.
Therefore, we have seen a lot of legislation
important legislation in the benefits arena and elsewhere
handled as part of a budget reconciliation bill
because a budget reconciliation bill,
there is special rules
that do not permit it to be filibustered.
Therefore, a simple majority is sufficient to get it
over the finish line.
Again, with a Republican-led Senate
they're gonna have trouble even with the filibuster,
even without the filibuster or with a budget reconciliation.
And then there's been a lot of speculation
that they might've changed the filibuster rule, lightened it
that probably won't be as much in the forefront,
obviously in the Senate
under the current alignment, shall we say.
But there is that prospect to change things in such a way
as to expand the exceptions from the filibuster
and that would be very important
should we end up with the scenario
whereby the, in fact the Democrats do control the Senate.
-: Got it, good.
So, we should be paying attention
when we hear the word filibuster on our new stations
not just because we're all teaching our kids civics
from our living rooms,
but because it's actually a really important point
for benefits legislation and other activities.
So I promised that at the head of the hour
that we were gonna be polling a little bit.
So here is your first opportunity to give us your opinion
and we would welcome your opinions.
Which one of the following sources
do you believe your participants or employees trust the most
to provide affordable high quality
health insurance coverage?
Plans provided by employers is number one,
plans provided by the federal government, number two,
plans provided by their state government
like the public exchanges,
and then finally plans purchased
in the individual health insurance market.
So, if you would please do us a favor and answer the poll
we will then be able to tell you how we've come out.
I always feel like we should have a little bit
of jeopardy music when these types of polls are happening.
-: While people are answering that,
let me share why we're asking this particular question.
American Benefits Council commissioned the polling
from public opinion strategies,
which does a lot of polling for NBC,
the Wall Street Journal and others.
They've been doing an election night poll since 1992.
And so we gave them some questions to ask
as part of that poll
and we have some preliminary results.
And I also wanna particularly do a shout out to Segal
for it's a generous support
to enable us to conduct that poll
which I think will be very, not only illuminating
but potentially very valuable for advocacy
on behalf of employer plan sponsors in the coming Congress.
-: Okay. So Jim, take a look at this.
It looks like in terms of who we think our participants
and employees trust,
apparently they trust us.
All of us on this call, so yay us.
But it looks like for purposes
of affordable high quality health insurance coverage,
they really do trust their employers.
Any reactions to that or how that might be--
-: Yeah, yeah, yeah, yeah, yeah.
So we asked sort of the parallel question,
this election night poll that I spoke about
is a poll of confirmed voters nationwide.
It's scientifically valid within appropriate margins
of errors and all the rest of that.
And we just ask them in a different way
sort of who do you trust most
as the source of this affordable high quality coverage
and the results were not as robust
as what we just saw from all of you.
But what's really interesting is that two years ago
when we asked this very same question
the voters were far more in the view
that they most trusted employers
that the benefits professionals who we polled believed
which I sort of told the benefits professionals
well, that's really a good sign
that the work that you're doing there
is even more appreciated than you think.
But the result from this year was a little different.
Among working men, 46% said employers,
16% said the federal government,
5% said the state government
and 21% said the individual market.
The statistics were a little bit different
for working women.
42% said the employer,
16%, the federal government,
14% said state government,
and 13% said the individual.
So, the most notable differences really
were between those who favored the states'
or the individual marketplace.
-: Hmm. That's interesting.
I wonder, do you think that that answer
might have something to do with the private exchanges
having taken up a little bit more headway
and being a little bit more well-known
and less of sort of a mystery to a lot of Americans
or any other insights on why that might've changed?
-: I would speculate on two things.
One is exactly that.
There has been some more in many places around the country,
not everywhere, obviously
a little bit more stabilization of the marketplaces.
But I also think that this result from voters
maybe a reflection of a more concerted effort
on the part of opponents, shall we say
of employer sponsored coverage
and people frankly pointing out that given the pandemic
and the millions of people who lost their jobs
and therefore lost coverage
that the idea of linking your healthcare coverage
with your job status is at greater risk.
And I think that we can't sort of ignore that reality
but of course there would be a great deal of concern
about throwing the baby out with the bath water
and rejecting or eroding the system
that still covers about 178 million Americans.
But those would be the two reasons that I would give
for the change from two years ago.
-: Interesting. All right.
Well, speaking of health insurance coverage,
can we get your insights on that,
along with Kathy's commentary?
-: Next slide.
I don't think that we can talk about the Affordable Care Act
without first noting the significant impact
that the Supreme Court's ultimate disposition
of the California versus Texas case
that it will hear the oral arguments on next week
will have on the direction
of any healthcare policy legislation in the new Congress.
For the third time now, since passage of the ACA,
the constitutionality of the law is being a questioned
because of the zeroing out of the individual mandate
as part of the 2017 tax reform measure.
Without going into great detail
because we don't have time,
I would just say that obviously
the Supreme Court could uphold the law
and send it back to the lower court.
It could strike down the law
or it could essentially affirm
what the Court of Appeals said,
which is they find the law,
portions of the law unconstitutional
but not necessarily the entire law.
And therefore they send it back again to the trial court
to figure out which portions of the ACA are still valid
even in the absence of the individual mandate.
And that of course will have a large bearing then
on the way Congress reacts to the Supreme Court's decision.
My guess is that the Supreme Court will actually
not try to rush a decision
but let the legislative process get underway
in the new Congress and new administration
before rendering its decision.
People could reasonably argue the other way
that they'd wanna get it out there
so that Congress and the new president would be able to know
sort of what they're dealing with
but we'll just have to see about that.
You know, if the law is upheld or most of it,
then I think Vice President Biden will move forward
on what he has promised to do
which is to simply build upon the current structure.
If significant portions are struck down,
I think there'll be enormous pressure
within the Democratic caucus in Congress
not to try to rebuild it
but to try to do something much broader
with a much larger government role
which presumably wouldn't pass muster
in a Republican-led Senate,
but nonetheless, the pressure will be there to do something.
I do hold out a little bit of hope here
that as partisan as things are generally
and as really partisan as they typically are on healthcare,
that there's been a little bit of a break in the dam
shall we say, for all of the efforts
that Republicans have tried over the past decade
to completely repeal the law.
When faced with the reality of it still being here
they actually have been open to other measures
to try to improve it somewhat
and we've seen this just the last few months
as we and others have been advocating
for COBRA subsidies to keep those who have been furloughed
or lost their jobs on their employer sponsored coverage.
And some of the interesting responses we've gotten
from some of the Republican congressional offices on that
is well, isn't that why we have the marketplaces?
Why not just have those individuals
go into the individual market
and some of the negotiations that were underway
between Speaker Pelosi and the White House
right before they sort of broke off,
were around various measures
to sort of bolster the individual marketplaces.
So, I wouldn't say that it's beyond the realm of possibility
that we could see some improvements there.
Kathy, you wanna comment a little bit
about the whole issue of the employer mandate
in the context of all of this?
-: Yes. We're looking at what the court's gonna do
in terms of how they deal with the ACA,
would they throw the whole case out?
Would they simply limit their decision
to just the individual mandate?
And if not, then how far into the act do they reach?
Do they reach the group health plan mandates
which may or may not be inside the scheme
of the individual mandate
which is the individual mandate guaranteed issue
and federal subsidies?
Do they reach the employer mandate
and see that as part the structure
that the individual mandate was within?
So, we're really curious as to how far they may go
and employers dealing with the group health plan mandate,
group health plans dealing with all of the other mandates
are going to be looking at that.
And it could be that all of that is left intact
even if they ruled that the mandate is unconstitutional.
-: I should also mention to be more specific
in terms of what kinds of things
we might be seeing coming forth
from a Biden administration around this,
increasing the people eligible for getting a subsidy
beyond those at 400% of the federal poverty level,
tying the subsidy, not to the silver plan,
but rather to the gold plan
and also sort of allowing reducing the level,
portion of one's income that one can be required
not to spend more than that level
in order to be eligible for a subsidy.
So, in other words,
making more people eligible for subsidies
by lowering the threshold of the amount of income
that they are required to contribute
in order to be eligible.
So, a lot of different things around bolstering up
the individual marketplace
and with what implications, therefore
to the employer sponsored system as a result of it.
-: Now, going to the next slide.
What about things beyond SCOTUS
and specifically the ACA, any other initiatives?
-: Yeah. So, here on this screen, we listed a few things
around which there is some bipartisan interest,
a lot of activity around the whole issue
of surprise billing,
the kind of bills that you get
from your out of network providers
even where you've had some services performed
at an in network hospital for example.
The differences here on this issue
this last Congress have been much more
between the House and the Senate
than it has been between the Republicans and the Democrats.
So, they might make another run at that.
A lot of interest in transparency
both from the current administration
as well as those in Congress.
I would absolutely expect that to continue,
obviously surprise billing and knowing what you're gonna owe
is a subset of transparency.
And prescription drugs,
something that really both parties would like to deal with.
It appears that Senator Chuck Grassley
is going to relinquish the chairmanship
of the Senate Finance Committee
where he has been sort of more of an advocate
of working with the Democrats
on controlling prescription drug costs.
His successor is not likely
to be as enthusiastic about that.
So, I wouldn't expect anything as sweeping
as what the House of Representatives passed last December
but I do see interest on the part of both
sort of again once the dust settles
and hopefully the raw feelings subside a bit
to see if there are some surgical things
that they might get done.
And one of them that does enjoy some bipartisan interest
at least over in the Senate is the idea
of permitting importation of drugs from Canada.
Kathy, I think you wanted to add a few points here as well.
-: Yes. We're continuing to see a lot of activity
in the Mental Health Parity area.
The Department of Labor,
and the Department of Health and Human Services
for governmental plans are very active in auditing plans.
Every audit we're seeing has significant
mental health sections of it.
And then just in general, improving mental health
particularly in light of the COVID pandemic
and making sure that,
plan sponsors are making sure that they're trying to provide
the kind of mental health benefits that their workers need
and really getting a lot of encouragement about that
from the federal government.
The other issue that we think is going to be significant
no matter what the administration is, is the Bostock case
which is the case that provided that Title VII
of the Civil Rights Act and other civil rights laws
that prohibit discrimination on the basis of sex
include gender identity and sex stereotyping.
That issue also is related to some of the 1557 regs
that are still being litigated.
And we expect to see a lot of activity
in the area of defining civil rights coverage
for gender identity, sex stereotyping
and treatment of gender dysphoria in health benefit plans.
-: Great. Thank you, Kathy.
Kathy: Thanks.
-: Shall we now move on to the next slide
which I believe is our next polling question.
So, everybody get ready.
Which one of the following sources do you believe,
oh, this is starting to sound familiar,
your participants or employees trust the most
to help them achieve a secure retirement.
First, the plans provided by employers,
through say, a pension plan or 401k type plan.
Second, plans provided by the federal government.
Third, plans provided by their state government
and finally forth, financial products
purchased by individuals.
If everyone would please enter
and we'll see if we trust ourselves
as much as we did the first time around.
And by the way as we're, oh, here we go, we do!
We do trust ourselves.
-: So, what's interesting about this one as it relates
because we asked the same question
in the election night poll of confirmed voters.
And if you recall the statistics I gave you
on the healthcare trust question
basically for men and women, working men and women,
three times as many trusted their employer
as the best source of healthcare coverage
than trusted the federal government.
But on the poll, as it relates to retirement,
even more trust the employer
than the federal government,
even though in the poll we just took now
trust in the employer, at least your belief
in terms of what your employees think about
that trust dropped from 93% to 80%.
So, in this instance,
it was about four to one among men,
those most trusting the employer, 51%, women 55%,
federal government, men, 12%, women, 10%,
state government, 2% from men, 6% from women
and the individually purchased product,
men, 32%, women, 21%.
So, bottom line of all of this is for purposes
of sort of understanding how some of this will play out
in terms of the public policy realm
is at least per this one national voter poll
still strong support for the notion
that employers are the most trusted source
for both health coverage as well as retirement security.
-: Yeah, I think that's a great takeaway
and it looks like the people that are in that industry
providing that coverage believe
that that's what their own plan participants think as well.
So, we've got some good consistency there, which is great.
Okay. Let's maybe pivot to retirement.
-: Right, and I'm not gonna go through all of these
except to say that as many of you may know,
retirement policy has traditionally enjoyed a great deal
more substantive bipartisanship
than has been the case with healthcare
and so many other issues.
And we're gonna see a continuation of that.
Many of you are familiar with the longtime partnership
of Senator Rob Portman, Republican of Ohio
and Senator Ben Cardin, Democrat of Maryland
really stretching back to when both of them served together
in the House of Representatives
and they continue to be interested in pursuing legislation
and they both serve on the relevant committee in the Senate
the Senate finance committee that has jurisdiction
over so many benefit issues.
Just last week, the chairman
of the House of Representatives Ways and Means committee,
the tax writing committee in the house
along with the ranking Republican in that committee
introduced legislation together.
And it includes many of the same ideas,
not entirely a matchup but many of the same ideas
that Portman and Cardin had been pursuing.
And there's another bipartisan partnership
between Congressman Kind and Kelly
over in the House as well.
So, you can see all of these things here.
Here's a list of the many many different things that,
and this is not by any means an exhaustive list
that are included as it relates
to defined contribution plans.
But if there is an appropriate vehicle
then this stuff can move forward.
In the face of the Democrats and Republicans
not being able to agree on a budget measure
or a tax measure,
then that becomes obviously more challenging.
I think, Serena, did you wanna add a little word here
about some other ideas related to savings vehicles?
You're on mute.
-: Thank you for that.
And thank you for asking about this.
There certainly if the Biden,
if there is a Biden administration
the Democratic platform for retirement
really focuses on both improving
and increasing savings opportunities
particularly for low-income workers.
And so I think they you're right
that this is a quite a lengthy list
but there even more little fixes, little options
just little things that can be done mostly
to help make it easier for people to save
and to give them more bang for their efforts to do that.
One of the many things that they're trying to do
is to figure out a way to equalize the benefit
that higher income workers get from the deduction
that they get from 401k savings.
Whereas if you don't have enough money
to get the benefit of that deduction,
you just don't get that benefit.
And is there a way to equalize that kind of problem?
So there will be, I think a lot of activity in that area
including the possibility of,
essentially if the Democrats prevailed,
a mandated savings vehicle
that employers would have to adopt
so that every employee had some opportunity
to have tax favored savings.
Obviously it wouldn't be difficult to guess
that the sticking issue on that
is not the savings opportunity,
but the question of the mandate
and the Democrats would prefer the mandate
the Republicans would not.
So, a lot of how this turns out
will depend on how the election shakes out
both for the presidency and the senate.
And I think--
-: Yeah, and if Serena notes,
the bipartisan bill introduced this past week
by the chairman and ranking member
of the Ways and Means Committee
as you can see from the second bullet on this slide
does include a requirement
for a mandatory offer of a retirement savings plan
but not a requirement for employers to contribute toward it.
-: Right, and that this list of options.
And as Jim said, this is just a few of,
they're like 34 different options
in that piece of legislation.
Everything in that piece has that bipartisan support.
So, they are likely to pass
if the opportunity ever presents itself.
They're even already working already on another list
of issues that don't quite have the bipartisan support yet
but if they can get people together
there may be even more of these little fixes coming along
in the not too distant future.
-: Next slide.
You know, for all of the substantive bi-partisan champion
on retirement policy, it's very, very rare
that retirement measures like most other things
don't really move on their own.
They have to be appended to some larger budget bill
or a comprehensive tax reform measure.
So once again, we shouldn't sort of look to the viability
of those bigger picture measures
as being the best chance
for any of this retirement related legislation
to move forward.
There are a couple of other items that have been proposed
and a part of the bipartisan legislation
that relate to both defined contribution
as well as defined benefit plans.
Kathy mentioned all of the audit activity
as it relates to Mental Health Parity
I think that most plan sponsors would say the biggest issue
in terms of their retirement plan,
audits has been the issue
of how they handle missing and unresponsive participants.
And so there is an effort here to create a data registry.
Maybe it's not including the legislation yet,
create a safe harbor that if employers do X, Y, and Z
they will have be deemed to do enough
to try to find these individuals of very small accounts
kind of hand that money over to the government
and people would have to get the money
by approaching it that way, as opposed to the employer
having to continue to try to search for these people.
Increasing the minimum required distribution age
is also something that is under discussion
that already changed as you know,
as part of last year SECURE Act.
On the defined benefit side,
by far the biggest issue relates to,
well, there are two issues
one having to do a single employer DB plans
and the other multiemployer DB plans.
On the single employer side,
the combination of extremely low interest rates
and various dips in the equity market has resulted,
and most importantly, the phasing out
of some of the reforms that were made a few years ago
in terms of the interest rate corridor
that can be used, must be used.
Basically all translates
into enormous additional funding obligations
on the part of many employer plan sponsors
of defined benefit pension plans.
And of course the worst possible moment
when so many of these companies
are taking a huge hit economically.
So there was efforts in the House passed measure back in May
to try to address this issue.
Basically, I think it's a fair generalization to say
that Republicans have been more receptive in the past
to proposals around defined contribution plans,
Democrats more receptive to proposals
around defined benefit plans.
Obviously getting either of them enacted
requires support from both,
but that issue I think maybe on the table again next year.
And it has the added virtue that
because of the way the scoring is done,
giving employers an opportunity
to make contributions more slowly
get scored as raising federal tax revenue.
Serena, say a few words, if you would
about the multiemployer side of things.
-: Yes. On the multiemployer side,
there's definitely a funding crisis and it's no secret.
And it's been around for a really, it started being,
people were concerned about starting,
about it starting at least a decade ago.
And it's just proven to be very difficult
to get agreement on.
Fortunately, there are two proposals out now,
a democratic proposal and a Republican proposal.
As you can imagine, they have their differences.
In both cases, the mechanism that's being proposed
is a special kind of partition
that would have the PBGC basically take liabilities
and form a distressed plan
and just take them and pay the benefits,
pay those liabilities for that partition piece
leaving the remaining piece financially healthy
and able to continue.
Both of the proposals that have been floated,
actually one of them there's it's in the Heroes Act
and its legislative language.
The Republican proposal is in the form
of a white paper at this point.
There's not the actual legislative language
but they have some significant differences.
And the democratic proposal is federally funded.
The money would go to the PBGC to pay the benefits
of the partitioned portion of the distress plan.
And the Republican proposal has funding
coming probably in part from the federal government
although being a white paper, it's sort of vague
but also increased premiums, just PBGC premiums
and also a new premium on the unions who contribute to the
or who sponsor plans and also on retirees.
And so that there's quite a bit of distance
that needs to be negotiated to get some kind of agreement
that would be needed for legislation to move.
Jim was saying earlier that this could be a time
where everybody with regard to a lame duck session
this could be a time that the parties wanna do
only what they have to do and leave town
because it's of the bitter environment
that we've had so recently
but the lame duck can also be a session when,
if there's some agreement on some key points
in particularly just on the need to do it,
the lame duck can be an opportunity for that to happen.
But in this case, there would be,
I'm sure in the background there's been a lot of work
on these things through all these years.
So, it's not starting on a blank slate
but the question would be would there be enough time
to get all the pieces together
and accurately put into language
and also would there be a vehicle
for that to go through on?
-: All right, good point.
Tami: Yup.
-: Next slide.
-: Oh, look at that.
Our last chance to get everybody's opinion.
So, let's see this final polling answer.
And for this one, please select all that apply.
So, you can select more than one answer.
Do you believe your plan participants or employees
would make contributions to any of the following benefits?
And if you do currently offer them,
please go ahead and click it.
And if you don't,
but you think they would be interested, also click it.
So, the first would be setting money aside for emergencies.
The second would be programs to pay down debt.
And when we're talking about every kind of debt
or any kind of debt, credit cards, student loans, et cetera.
We're hearing a lot about caregiver benefits
in particular elder care expenses,
transportation, medical coordination,
legal documents, et cetera.
And the final one are programs setting aside money
for down payments or other expenses to buy a home,
be it your first home or maybe even a second home
or even a retirement home.
So, let's see what you all think.
And while you're all answering those questions,
we've had several of you ask, as usual,
the number one question I always asked during webinar
can I get a copy of the slides?
The answer is, but of course.
We would never let you listen to all of this
without copies of the slide.
And if you are registered through the website
you will get a copy of the slides once the webinar's over.
Okay. So look at that.
This looks like there is a fair amount of interest
in many of these different benefits.
And I think that that's fascinating.
I know Jim, we asked one of those questions
during the election night poll, isn't that right?
-: Yeah. We asked a sort of a version of it.
We asked, we said, would you be more or less likely
to participate in your plan?
Because this was question was just asked
of those who confirmed that they had a 401k
or similar defined contribution plan
if the following things happened.
And so since the issue of student loans
has gotten a lot of attention, you know
there's this notion that a lot of,
particularly young employees are not able
to participate in the 401k either at all,
or as much as they would like to
and their employer would like them to
because they are loaded down
with all this student loan debt.
The idea is to allow employers to make a quote unquote
matching contribution into the K plan
if the employee demonstrates
that they've made a certain contribution,
or not contribution but a certain payment
of their student loan.
So the question was, would you be more or less likely
if your 401k plan included a program
to allow you to address debt including student loans.
And basically 65% said yes,
with 40% saying they'd be much more likely to participate.
And then really just 10% said
that they would be less likely to participate.
-: Interesting. Interesting.
And I think that the answer to these questions here,
you know, something that we're hearing a lot
from our clients and sort of plan sponsors of all ilks
is the talk about not just setting up individuals
for security in retirement
but also thinking about security throughout their career.
And certainly that's been a big issue
with the number of withdrawals, hardship
and otherwise coming out of some plans during the pandemic
and we certainly saw that same thing back in 2008
during the economic slowdown.
So, thinking about savings
and thinking about financial security
beyond simply just during retirement,
but also throughout an individual's career
is something that I think a lot of plan sponsors
are thinking about.
So, but you gotta pay for it, right, Jim?
And maybe that's what the next slide there
to start to thinking about. -: Yeah, yeah.
And that brings us to the very, very last slide.
So, we'll save some time still for a few more questions.
All of this as Tami was saying presupposes,
you know, are you gonna pay for it?
And if you are, how do you pay for it?
The two largest tax expenditures
in the entire federal budget,
that is to say provisions of the tax code
that account for lost revenue to the federal government
are employer sponsored health coverage
and employer sponsored retirement plans.
And you can see sort of $3.1 trillion, that's with a T,
over the next 10 years for health
and 2.1 trillion on the retirement side.
All I'll say about this is sort of a two things,
number one, they're gonna have to do
some kind of a tax bill.
And even if that, the main focus of that
is sort of, you know, Vice President Biden's
strong indication of what he wants to do
to undo portions of the 2017 law
there undoubtedly will be tax things
that some of the Republicans are gonna wanna do as well.
So the likelihood of a tax bill in some form
over the next year, year and a half, I think is pretty high.
And that means that these kinds of programs
are a source of revenue to pay for other initiatives
or to pay for some of the things
that we've been talking about this afternoon
on the healthcare front and the retirement front
that would otherwise cost money.
And so we can chat about it now or in a future occasion
in terms of how that might manifest itself,
but I would just say that we did
some really interesting research about two years ago
that said, even though we take issue
with the underlying assumptions
around these very high numbers,
assuming the government is right about those numbers
what are we getting for this enormous tax expenditure
that we as American taxpayers are making?
Well, as it turns out for every dollar
of lost federal revenue due to the tax-favored treatment
of employer sponsored health coverage,
you employers are spending $4.45 on healthcare coverage
for your employees and their family members.
For every dollar that we lose
because of the tax favored treatment of retirement plans
$7.15 are paid out from retirement plans.
In other words, this is a bargain to all of us as taxpayers
and to the federal treasury.
And I think that this point
must be repeatedly shared with policy makers
so they understand that it would cost vastly more
to provide the same level of financial support
and security for people
if it had to be done through more direct means.
And that's all I have for you this afternoon.
But again, we have time
for some questions? -: Great, thank you.
Absolutely.
First, I just wanna let you know
there are tons of questions coming in and don't let the fact
that we're running close to the end of the time stop you
because you're gonna have another bite at the apple,
actually two more bites on November 12th.
We'll be back and we're gonna be offering
a full hour on health, a full hour on retirement
and broader financial security issues.
So, if you haven't registered for those webinars, please do
because we're gonna get a lot more wonky
and a lot more detailed.
Some might even say geeky,
but I would never say that.
So, let's not waste any more time
and let's get to a few of the questions
'cause they've certainly been coming in fast and furious.
The first one I think is,
we've got a couple that are sort of similar.
Like what'll happen if so-and-so wins.
So, I'm gonna couple a couple of these.
The first one would be, if Biden wins,
you know, we just had some transparency rules
that came out that Kathy and Jim, you talked about,
what would happen to those?
I think that person might be wondering
do I have to read those 3000 pages
or can I just kinda blow it off until they go away.
And then also along those same lines
in terms of what will happen if,
what do we think might happen to HSAs,
in particular are we hearing any buzz
about any higher contribution limits
and let's sort of stick with those two.
So, HSAs and changes or tweaks
and then also the transparency rules.
-: Kathy, you go first,
'cause I've been doing most of the talking.
-: Well, on those transparency rules,
they are, we don't have to comply with them
for a couple of years
but there are really significant changes
in how fee schedules, fee prices,
negotiated rates are disclosed.
And it's all based on, funny, the Affordable Care Act
which provides the statutory structure for that.
It's not clear what's gonna happen with those
because while they were Trump administration rules,
the transparency goals of the Affordable Care Act
were enacted by the Obama administration.
So, we might see some tinkering with it,
but that goal of providing transparency
and pushing plan sponsors and hospitals
to disclose fees is not likely to go away.
On the HSA side, we have seen a lot of proposals
to try to make HSAs more attractive by increasing the,
or decreasing the deductible amounts,
increasing the out-of-pocket maximums, things like that.
And there have been some modifications to both HSAs
and to flexible spending accounts in some of the hero bills
and other COVID relief bills.
HSA relief, I don't think is necessarily on the top burner
but I'd love to hear what Jim says about that.
-: Yeah. I mean, traditionally there wasn't a whole lot
of democratic enthusiasm for HSAs
but they have warmed to that over the years
as more and more millions of people participate in them.
So I would put that one within the realm of possibility.
-: Yep. Okay.
Let's turn our attention to a retirement question.
We talked a little bit earlier about
maybe some mandatory enrollment or escalation rules
and one person asked, how would that work for states
that don't allow something like that
due to payroll garnishment laws, for example.
Do we think that federal law might overrule state law?
And of course the devil is absolutely in the detail
on these types of things.
And I'll remind you that although there might happen
to be a few JDs on the phone
this webinar does not constitute legal advice
and you should definitely be talking
to your legal counsel on that front.
But maybe say something about some of those state rules
and how it might apply to those proposals.
-: Serena?
You're on mute.
-: You know, I just get carried away.
Tami: There you go, you got it.
-: Well, I don't recall this particular provision.
This is in the legislation that came out last week,
the automatic enrollment and the automatic escalation.
And that was limited to 401k and I think also 403b plan.
Certainly there can be a governmental 403b plans
but you know through the years there have been other issues
that have arguably applied to governmental plans
but the application has,
like the non-discrimination testing in retirement plans.
The non-discrimination testing
just ultimately was abandoned for the governmental plans.
I don't know, without a specific reference,
I don't know how that would be handled really.
I think it would just sort of work itself out.
-: And Tami correct me if I'm wrong,
but I think the person asking the question,
almost getting not so much at state plans,
but rather state laws that might preclude
that automatic escalation in private sector sponsors.
-: I think that's exactly right.
Yep, I think that's exactly right.
And look, my suspicion is that, you know
while federal law usually, Trumps state law, obviously it,
the devil's in the details and it really depends,
you know, California we know has some very specific laws
related to some of these issues
and I think we'd have to figure out
sort of the details on that.
So, I don't know if there's a clear answer right now
I think a lot of people have been thinking about
what the conflict of law implications would be
if both existed.
Anything to add on that?
Or should we--
-: I don't think that's--
-: All right, why don't we, there were so many questions.
Let's just take a couple more.
If you can't continue with us, that is just fine
but I'm happy to stay a few minutes after the hour
just to try to get a couple more of your questions answered.
And for those of you that can't stay,
our November 12th webinars are posted on segalco.com
under our insights page,
just search for webinar and you'll find it,
or send us an email at the email link there
and we will get you that invite directly into your inbox.
Okay. So next question.
Can you compare the ACA employer responsibility perspectives
and whether they would change
depending on which individual wins the White House.
So, whether we've got a Biden versus a Trump administration
specifically related
to the employer responsibility provisions
which I know Kathy you've touched on a little bit
when we were speaking earlier.
-: I have some thoughts, but again, Kathy, go ahead.
You first.
-: Well on the employer responsibility issue,
and one of the things that we've tried
to get the agencies to do is to lighten up
on those disclosure rules
on the 1094 and 1095 with disclosures,
which really a lot of their utility was eliminated
when you got rid of the individual mandate.
So that's one thing we're looking at.
Also looking at the number of folks
who have to do the employer responsibility penalties
and also what the standards are.
You know, some folks would like to see a 40 hour standard.
Others would like to see a 20 hour standard.
So, there's certainly still be some discussions about that.
I don't know, you know,
that's a statutory fix, not a regulatory fix
so it may not be in the power of the president
and you maybe look for a legislative solution to that.
So, Jim, I don't know what you think about that.
-: Yeah, I guess I would just sort of repeat
an earlier point that how the Supreme Court dispenses
with the current case will have a huge impact on this
regardless of who's in the White House.
And if I say this,
if the Democrats would have the, sort of the clean sweep
you know, we've been sort of doing this whole presentation
on the notion that the Democrats hold the House,
the Republicans still hold the Senate
and Vice President Biden wins the presidency
which is sort of where the indications are at the moment,
what would happen, and if,
one of the big questions around the employer mandate
was that if as Biden was advocating
that there would be a public option
where employees would be able to choose the public option,
what implications would that have for the employer mandate?
It certainly wouldn't seem fair if they go in
and then they're eligible for a subsidy
to then trigger the mandate.
So, there would have to be a corresponding change.
Obviously the prospects of a public option
have seriously diminished
with the prospect of a Republican led Senate.
But that is something again, to keep in mind
should the balance of power change
during the course of the next couple of years.
And then in terms of the reporting requirements,
they of course sort of go hand in hand,
but you could see a scenario
whereby the Supreme Court uphold some portions of the ACA
but says that the provision
about no exclusions for preexisting conditions
and the employer mandate fall by the wayside
because after all the employer mandate is really called
and with a lot of the employer shared responsibility,
a penalty.
And so if it's a shared responsibility
the court might very well say,
well, the individual mandate is gone,
so should the employer mandate.
-: Right, no sharing, no sharing.
Okay. Final question.
This is the speed round.
So all of you get ready to get off mute
and then get back on mute.
But I know the last question everyone wants to hear
is take out your crystal ball,
if you had to predict when all of the election
specific related questions
are going to get wrapped up in a bow
and we're gonna have some answers and definitive results,
when would that be?
Okay, so no one will hold you to this.
Well, other than maybe your family members.
So Jim, what do you think?
When are we gonna know?
-: Before December 14th
which is when the Electoral College will meet
and possibly even before December 8th,
which is the deadline for the states
to put forward who the slate of electors will be.
-: Okay, Kathy?
-: Well, we've got a December 11th
continuing resolution deadline for the budget
for the lame duck Congress.
And then we've got the January 5th Georgia election
and we've got an inauguration at the end of January.
And we have the COVID pandemic, which increases daily
and is becoming more and more urgent.
So, I'm gonna say March 31st, which is my birthday.
(all laughs)
-: My goodness gracious.
That's kind of a pessimistic.
Okay. Serena let's hope you're more optimistic for us.
-: Well, I was thinking it would be probably the,
when the results of the any Georgia runoff were finalized,
when all of that was done.
-: When all of that was done, okay.
Well, I'm gonna put my bet on Thanksgiving
because I think all of us need
to feel a little bit more optimistic
and I hope that this Thanksgiving, we have a lot more
than just a really sad turkey to be grateful for.
So, that's what I'm gonna put my money on.
And with that, I just,
I genuinely wanna thank Kathy and Serena as always
for your incredible intelligent insights
and I can't wait to hear even more of them on the 12th
and Jim, huge thanks to you
and the entire American Benefits Council
for your leadership in our industry
and partnering with this webinar
and also on the election night polls.
And finally, to all of you left on the call,
thank you so much for participating.
We hope that you found this helpful.
Please stay on for a quick poll,
'cause we wanna know if we kinda hit the high points
that you wanted us to hit
and how we can constantly do better.
And we hope you can all join us on the 12th.
And in the meantime, give us a jingle if you have questions
and we look forward to continuing to partner with you.
Thanks so much and everybody stay safe.
-: Thank you.
Attendee: Thank you, bye bye.