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Wye River Group On Healthcare Releases Report

News Release

For Immediate Release October 17, 2001		Contact: Jon Comola

(Wye River Group on Healthcare)

(512) 472-2005
Consumer Directed Health Care Would Help Laid Off Workers
 
 WASHINGTON, D.C. (October. 17, 2001) - Prior to the terrorist attacks of September 11, Congress was engulfed in a debate over the so-called "Patients' Bill of Rights." Now Congress is debating how it can prevent those who lost their jobs in the aftermath of the attack from falling into the ranks of the uninsured. The bipartisan Wye River Group on Healthcare (WRGH) today released a groundbreaking report that advocates giving employees even more choices and more security than Congressional leaders have been contemplating.
"Our approach would provide employees the option of exerting more control over their healthcare decisions," said Jon Comola, president of the group. "We want to reduce the number of uninsured and give those who are insured more options."

 According to the WRGH report, employers can make a contribution to each employee's health insurance and give the employee a wide range of insurance choices. The concept traditionally known as "defined contribution" is redefined in this report. Our approach creates a partnership between the employee and their employer and it is increasingly popular among the nation's largest companies. However, government regulations currently impede the growth of the approach:
  • "Under current law, employer-created Flexible Spending Accounts (FSAs) allow employees to pay medical expenses with pre-tax funds. However, any FSA funds not used at the end of the year are forfeited. This "use or it lose it" rule perversely encourages wasteful end-of-the-year spending, and prevents employees from building up funds for future use. The report says the FSA money should roll over to fund health expenses in future years.
  • "Under current law, employers can use their FSA funds to pay for health expenses, but not insurance premiums. The report says workers who leave an employer should be able to take their FSA with them and use the funds for COBRA payments or other insurance.
"These changes would empower employees and give them more choices," said Jon Comola.

 The report, "The Employers Guide," is a roadmap for employers who are looking for the next viable generation of healthcare benefit strategies.

 For Executive Summary: http://www.ncpa.org/extra/health/wye.pdf Get Adobe Acrobat Reader
 For Full Text: http://www.ncpa.org/extra/health/wye_full.pdf Get Adobe Acrobat Reader

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Copyright © 2001 National Center for Policy Analysis - All rights reserved.