With news of Republican Scott Brown’s victory in a special election held to fill the late Senator Ted Kennedy’s term, many employers are wondering what the future holds for health care reform. The answer is, it’s still coming.
Last year, the Senate and House each passed their own health care reform bills with significant differences. Typically, the next step would be for the House and Senate to reconcile their two bills. Although Brown supports the 2006 Massachusetts Health Care Reform Act, he opposes both the House and Senate health care reform bills and is expected to become the crucial 41st Republican vote, enabling the minority party to filibuster any reconciled bill that comes before the Senate. Earlier Wednesday, the President announced that the Senate won’t rush to pass a reconciled bill before Brown is seated. However, despite reports to the contrary, health care reform clearly isn’t dead. Democrats are still weighing a number of options.
One option is that Senate Democrats could attempt to negotiate with one or both of the moderate Maine Republican Senators, Olympia Snowe and Susan Collins, to gain their approval of a reconciled bill. That approach is unlikely, however, as both joined a Republican filibuster — and refused to even allow cloture on a vote on the Senate Bill. Minority Leader Mitch McConnell has been very effective at maintaining party discipline in the use of the filibuster, and Tuesday’s electoral results aren’t likely to change that.
A second option is for the House to agree to the bill already passed by the Senate. By passing the Senate’s bill verbatim, that version of the bill could be sent directly to the President’s desk for signature rather than back to the Senate for approval. While some Democratic members of the House, such as Congressman Bart Stupak, have indicated they won’t support that approach, it may come to fruition.
The Senate bill, titled the Patient Protection and Affordable Care Act, (H.R. 3590), is arguably the more flawed and less ambitious of the two bills, but was already widely expected to provide the framework for any reconciled bill, because of the de-facto super majority requirement created by the minority party’s use of the filibuster. The Senate bill shares some similarities with the Massachusetts Health Care Reform Act, most notably the imposition of a “free rider” penalty on certain employers that don’t offer an adequate and affordable health insurance plan to their employees.
The Senate bill also has some significant differences from the Massachusetts reform model, including a 40% excise tax on employers who offer so-called “Cadillac” plans. Passing the Senate bill verbatim would mean that certain agreements already reached as part of the reconciliation process, such as exempting unionized employers from the excise tax, would not be included.
Another option is for Congress to pursue reform through the budget reconciliation process. This was the method used to pass the “Jobs and Growth Tax Relief Reconciliation Act of 2003,” commonly known as the 2003 tax cuts enacted by former President Bush. Like the 2003 tax cuts, a health care reform bill passed through the reconciliation process would require the votes of only 50 senators. There are currently 57 Democratic senators and two Independents. Also like the 2003 tax cuts, a health care reform bill passed through reconciliation would expire in 10 years, meaning that the reforms wouldn’t be permanent.
A spokesman for Majority Leader Harry Reid recently told the Boston Globe that this approach is “well within the scope of the rules of the Senate.” Without the need to harness every single Democratic vote, a bill that emerges from the budget reconciliation process could take many different forms, ranging from expansion of Medicare and Medicaid eligibility to imposition of significant tax burdens on employers.
Although the passage of a health care reform bill will be complicated by the Massachusetts election results, employers should stay tuned. Reform is still on the way, albeit with less predictable results.
Michael Leahy is an Associate at Skoler, Abbott and Presser in Springfield, MA. His practice includes matters involving employment discrimination and retaliation, wrongful discharge, separation and severance agreements, noncompetition and trade secret litigation, employee investigations and discipline, wage and hour issues, unfair labor practice charges, and collective bargaining negotiations.