1. Government Affairs Update
Neil Reichenberg
Executive Director
IPMA-HR

2. Outline Overview Affordable Care Act (ACA) ACA Excise Tax
ACA Insurance Subsidies Litigation
FLSA Overtime Regulations Litigation
Regulatory Reform
FLSA Regular Rate Litigation
EEOC Wellness Regulations Litigation
Municipal Bond Tax Exemption

3. Overview
Republicans control the executive/legislative branches of the federal government but are short of the 60 vote majority needed in the US Senate to end filibusters
33 states have Republican governors
During the last 8 years, Democrats lost more than 1,000 seats at the state and national level

4. Overview Congress faces deadlines this year:
March 16th – debt ceiling suspension ends – Treasury Department can use “extraordinary measures” to delay the deadline until mid-summer
April 15th – deadline to pass a budget
April 28th – Continuing resolution funding the federal government for this fiscal year ends

5. ACA Repeal/Replace/Repair?
On January 20th, President Trump issued an executive order seeking the prompt repeal of the ACA
Order directs agencies to minimize the unwarranted economic and regulatory burdens of the law
Waive requirements imposing fiscal burden on states or tax/penalty on individuals/families

6. ACA Repeal/Replace/Repair?
Congress has begun the process of repealing the Affordable Care Act
Congress will use the budget reconciliation process, which only requires majority vote in the Senate rather than 60 votes
Limited to provisions having revenue impact
House and Senate passed measures directing the relevant Congressional committees to draft reconciliation legislation by January 27th which was not met

7. ACA Repeal/Repair/Replace?
Senator Schumer advised that Democrats will not engage in negotiations on a replacement bill if Republicans force its repeal under budgetary rules
So far, several plans have been introduced with no consensus on a replacement or repair plan
Growing concern with the potential impact of just repealing the ACA

8. ACA Repeal/Replace/Repair?
Congressional Budget Office report:
Repealing major provisions of the ACA, while leaving other parts in place, would cost 18 million people their insurance in the first year and could increase the number of uninsured Americans by 32 million in 10 years

9. ACA Gains Public Support
ACA is more popular than ever
For the 1st time, more people view the health law as a good idea rather than a bad one
Focus is shifting from what is wrong with the ACA to the possibility of 21 million people losing coverage, according to Robert Blendon, Health Policy Professor, Harvard University
Pew Research Center found for the 1st time since 2007 that a majority (60%) believe the federal government is responsible for making sure Americans have health insurance

10. ACA Gains Public Support
Commonwealth Fund report found that those purchasing health care through the marketplace (66%) or expanded Medicaid (77%) believed their coverage was good, very good, or excellent
Quinnipiac University poll found that 84% believe Congress should not repeal the ACA until a replacement plan is in place

11. ACA Repeal
2015 budget reconciliation bill vetoed by the President is likely to be a model for the reconciliation legislation and would have repealed:
Individual & employer mandates
Expansion of Medicaid
Premium & cost-sharing subsidies on the public insurance marketplace
Cadillac tax/medical device tax/increased Medicare taxes on high-earners

12. ACA Repeal/Replace/Repair?
House Republican leadership stated a repeal/replace bill will be introduced after the Presidents Day recess
Replace provisions could include:
Refundable tax credit
How to deal with the Medicaid expansion
Establishing high risk pools
Expanding access to health savings account

13. ACA Cadillac Tax
Bill (H.R. 173) introduced by Representative Courtney (D-CT) & Representative Kelly (R-PA) and would repeal the excise tax on employer-sponsored health care plans
80 cosponsors
Tax scheduled to go into effect in 2020
IPMA-HR supports this legislation

14. ACA Insurance Subsidies Litigation
US District Court ruled in favor of Republicans in the US House of Representatives who sued the Obama Administration claiming that only Congress could appropriate funds to provide subsidies to insurance companies
Appeals court agreed to delay the appeal until late February to give the new administration a chance to decide how to proceed
Two ACA recipients sought to intervene in the case, which was denied
If the appeal is dropped, insurance companies could withdraw from the exchanges unless Congress appropriates the funds

15. FLSA Overtime Regulations Litigation
District Court issued preliminary injunction preventing implementation of the revised overtime regulations on 12/1
Court concluded that “significant increase to the salary level creates essentially a de facto salary-only test” which was not the intent of Congress

16. FLSA Overtime Regulations Litigation
Case brought by 21 states
Court believed only Congress and not the Labor Department can decide that the salary requirement should “supplant the duties test”
Court rejected a request that the Garcia case be overturned so that the FLSA would not be applicable to state/local governments

17. FLSA Overtime Regulations Litigation
Next steps:
Appeal pending before the 5th Circuit – unclear how the Trump Administration will handle the appeal – they have until early March to decide
Texas AFL-CIO requested to intervene as a party in the case – motion pending before the District Court

18. Regulatory Reform
White House Chief of Staff Reince Priebus issued a memorandum to all executive departments and agencies to freeze new or pending regulations -- giving the new administration time to review them
President Trump announced that 75% of regulations will be eliminated

19. Regulatory Reform
Executive Order directs that for every new regulation, agencies need to identify at least two existing regulations to be repealed
Total incremental cost of all new regulations during this fiscal year shall be no greater than zero
Regulations concerning military, national security, or foreign affairs are not covered

20. Regulatory Reform
Three advocacy groups filed a lawsuit challenging President Trump’s executive order requiring that 2 federal regulations be repealed for every new one added
The groups contend that the order usurps the Congressional authority to enact laws to protect public health, safety and the environment

21. Regulatory Reform
Under the Administrative Procedures Act, the repeal of existing regulations requires the same process as the adoption of new regulations with agency analysis, legal review, public notice and comment

22. Regulatory Reform
Congressional Republicans are using the Congressional Review Act to pass resolutions disapproving recently finalized regulations
Members of Congress have a specified time in which to act on joint resolution disapproving the rule
If passed, the President can either sign or veto the resolution
Prior to this year, in the 20 years since its passage, it had been used only once

23. FLSA Regular Rate
9th Circuit ruled in City of San Gabriel v. Flores that unspent dollars paid to employees as part of a bona fide flexible benefit program should be included in the regular rate calculation for determining FLSA overtime
City provided a flat dollar amount every month to be used towards the purchase of medical, dental, & vision insurance
Any unspent dollars were returned to the employee as taxable income

24. FLSA Regular Rate
9th Circuit stated that since about 40-50% of the monthly amount is cashed out to employees, that the plan was not a bona fide plan resulting in the entire amount having to be included in the regular rate
City is appealing the decision to the US Supreme Court
IPMA-HR is joining an amicus brief in support of the city’s petition for Supreme Court review

25. EEOC Wellness Regulations Litigation
AARP sued the EEOC seeking an injunction to prevent the implementation of the wellness regulations
AARP argued that the 30% wellness program participation incentives would render the program involuntary

26. EEOC Wellness Regulations Litigation
District Court for the District of Columbia denied the request since an injunction is “an extraordinary and drastic remedy”
Judge believed that nothing in the ADA or GINA foreclosed the EEOC’s interpretation

27. EEOC Wellness Regulations Litigation
Rules were finalized in May 2016, but EEOC lawsuit wasn’t filed until October
Court stated that “enjoining the rules now will cause uncertainty for employers as to the lawfulness of their wellness programs – and uncertainty for employees as to the terms and cost of their health insurance”
AARP will continue to pursue the case

28. Municipal Bond Tax Exemption
IPMA-HR joined with almost 30 organizations urging Congress to continue the federal tax exemption for municipal bonds
Tax-exempt municipal bonds have financed more than $2 trillion in new infrastructure investments in the last 10 years
47 members of the House of Representatives have signed a letter expressing support for tax-exempt municipal bonds

29. Government Affairs Taskforce
IPMA-HR has a Government Affairs Taskforce
Taskforce has monthly conference calls during most of the months when Congress is in session
IPMA-HR members interested in joining the taskforce, should contact Neil Reichenberg,

30. Additional Information
For additional information, please contact:
Neil Reichenberg
Executive Director
IPMA-HR