Perry Braun Archives - Benefit Advisors Network

The 10th Amendment’s Impact on Employee Benefits Today

Posted on July 12, 2019July 12, 2019 by Perry Braun

Written by Perry Braun, Executive Director, Benefit Advisors Network. Published July 11, 2019 on ThinkAdvisor.com.

Maybe, over the next few years, states will have more influence over how your world works.

Remember that civics class you had to take in high school? If so, you might recall that the federal government possesses only those powers delegated to it by the U.S. Constitution. All remaining powers are reserved for the states or the people.

This is the main principle of the 10th Amendment to the Constitution. And for approximately 240 years, there has been a healthy tension between the states and federal government with respect to the authority and role of each.

A review of history teaches us that the founding fathers struggled with the tension that exists between states’ rights and a federal government. James Madison and Thomas Jefferson were both advocates for small and limited federal government. Both feared that a large central government would be too close to a monarchy. Alexander Hamilton, whom many suspected of being a monarchist at heart, favored a larger central government. Hamilton feared local democracy because it would allow control by the “masses.”

Since its ratification in 1791 there has always been issues between states’ rights and federal authority. However, over the past 10 years, the tension between the states and federal government has risen dramatically. We are now witnessing the impact of this tension on many policy issues, from sanctuary cities and immigration to health policy (Medicaid, Affordable Care Act) and pro-life/pro-choice policies.

How is this relevant to the employee benefits industry?

The Affordable Care Act (ACA) is illustrative. The federal government enacted a broad law imposing many new requirements on both individuals and states. Many states resisted the implementation of key elements of the ACA and sued in federal courts to either stop or limit the implementation. On one key issue the states were successful: the Medicaid expansion provisions of the ACA, which punished states for not adopting the federal rule by reducing other federal money.

Ruling with the 10th Amendment in mind, the U.S. Supreme Court noted that the federal government is not permitted to “put a gun to the head” of the states to achieve federally mandated results.

The Supreme Court held that states could elect to participate in Medicaid expansion but could not be forced to do so. As a result of that decision (and other similar decisions), during the 10 years that have passed since the law was enacted, the ACA has been, in some observers’ eyes, significantly watered down, resulting in a divergence in implementing (or not implementing) key components of the law at the state level. For example, some states have refused to implement the Medicaid expansion requirements, and some have expanded the eligibility of individuals to participate in Medicaid. Other states took an active interest in the development and introduction of insurance exchanges, while others participated at the absolute bare minimum.

When signed into law, the ACA represented a significant expansion of the federal government into areas that have traditionally been left to… [Read the full article]

Employee Benefit Plan Review

Posted on March 4, 2019July 15, 2019 by Perry Braun

Written by Perry S. Braun, Benefit Advisors Network’s Executive Director. Published in Employee Benefit Plan Review, March/April 2019 issue.

What Can Employer Sponsored Benefit Plans Expect from a Divided Federal Government?

While much of the focus in 2018 came down to the elections, we now have those results and can begin moving forward. But, with a divided Congress what will the impact be on the insurance marketplace, the healthcare delivery system, the advisors and employers that interact (plan, strategize, implement, and execute) and most importantly, the employees that participate in the employer sponsored benefit plan?

Policies: What to Expect
Following the Kavanaugh hearing Senator Jeff Flake commented that he would have voted differently regarding the Federal Bureau of Investigation inquiry if he was running for re-election. This comment paints a picture that our representatives to Congress are concerned with advancing policies that secure their re-election rather than the wellbeing of the constituents they represent. With that backdrop, the status quo will be the likely outcome with regard to the current state of the Affordable Care Act (ACA) and America’s Health Insurance Plans (AHIP) until the 2020 election.

Are there policies/regulations that the parties could agree on? There are two observations assuming any policy change will support two goals – re-election and benefit to their constituents.

One, if there is any change in policy, it could be in a bipartisan approach to address prescription drug cost and the impact of prescription drugs on the health and safety of the community. The national discussion around opioids, the increase in drug prices on certain medications, as well as the lack of generic equivalents are issues that both parties wish to address from a policy perspective.

However, this represents a change on the margins and not a repeal of the program offered through President Obama or the alternative program offered by President Trump. Further, an incremental approach will not have any true and meaningful impact on the cost of healthcare – which is supposed to be the focus. Rather, the focus will be on insurance or premium reform.

The second observation is that while the focus has been on health and healthcare policy – which is really a tremendous amount of energy and no action – there is not an equal amount of attention being given to regulations for employers and advisors to meet, which come with real economic consequences, for example, fines and penalties.

The Next Two Years
So, with no one party in control of Congress and the executive branch, what does the next two years look like? Likely, the parties will be eyeing the 2020 presidential election and one of the key topics will be what the social contract with America looks like.

For example, the “crushing” national debt, cost of healthcare cost, the cost of tuition and the educational debt, and income disparity and burden this has on the vast majority of individuals in this country will push political parties to renew calls to address this situation, 2 March/April 2019 Employee Benefit Plan Review however, their energy to tackle this and their solutions will greatly differ.

The debate may focus on one or more of the following strategies to win over the hearts and minds of the voting public – raise tax revenues, cut government costs, or a combination of both.

If raising tax revenues is chosen, the impact on the individual is important. It is certain that all taxpayers will need to contribute some amount of tax revenue to buy down the debt. But, with the median household income hovering right around $60,000 and the average American household carrying $137,000 in debt, the problem becomes pretty clear: most people are not… [read more]

Industry Predictions for the New Year

Posted on February 4, 2019February 4, 2019 by Perry Braun

Written by Perry Braun, Benefit Advisors Network, and Lisa Allen, Relph Benefits, for America’s Benefit Specialist.

The tail end of 2018 saw the majority of the country focused on the mid-term elections, and with good reason. Those results will impact not only the political landscape, but also every business, organization and individual in the U.S. The impact will be felt in 2019 and beyond. The mid-term elections left us with a divided Congress, with many now asking, “What will the impact be on the insurance marketplace, the healthcare delivery system, the advisors and employers and—most important—the employees that participate in the employer-sponsored benefit plan?”