During a Senate Health Education Labor and Pensions Committee hearing prior to the Congressional recess, Sen. Roger Marshall (R-KS) questioned witnesses about portable benefit plans and work benefits for independent workers.
00:07Under a portable benefit model, what protections do workers have if a benefit provider were to go under or misuse funds?
00:17Under a portable benefits plan, I mean, I think that there are protections in place to ensure that, you know,
00:22whatever investments have been made, whatever has been paid into it, that that would still be there and protected.
00:27There are some great companies that have those accounts and set those up to ensure that,
00:31and they're regulated to ensure that that happens.
00:33Have many of them failed, or has that happened very often?
00:36I have not seen any of them failed, sir.
00:39Okay.
00:39All right.
00:39Mr. Coleman, let's go to you next.
00:42I'm a big fan of association.
00:43Health care plans is something I fought for to help become a possibility.
00:48I've seen some acceptance of it.
00:51I'm surprised it's not more so, to be honest.
00:54What's keeping that from exploding in a good way, and what do we need to do to put wind beneath those cells?
01:05Senator, thank you very much for that question.
01:07A primary obstacle to association health plans underneath legacy regulation deals with the obstacles to be able to form a coalition of our association of businesses
01:23whose aggregate employee body can be seen as a single health plan.
01:28There is something known as the look-through doctrine, which says if you don't have the right affiliations among businesses,
01:34we're going to trade each individual business within an association as its own entity with respect to health insurance,
01:41and hence if they have three people, they're in the small group of health insurance.
01:45Got it.
01:45So is this a we need to change the law, or is it a regulatory issue?
01:50Ultimately, changing the law is best because not only do you have the benefit of a very clear statutory precedent,
01:59but you also have a situation where technologists like myself or my former self are going to make investments in that market
02:09to build platforms facilitating technology, et cetera.
02:12If it's a regulatory solution, there's more hesitation because there's the fear that the next administration may change regulation.
02:20Okay.
02:21Thanks.
02:21And I would just ask the committee staff, I'm sure you're looking at that,
02:24but we would love to kind of understand what we can do to improve that situation as well.
02:29We've seen some great success in Kansas with some of these plans, and again, I'm surprised there's not more people utilizing it.
02:36I'll go to Ms. Friedman next, and if you could just briefly explain that how under portable benefits can we be sure
02:45that employers are still providing benefits on par with many W-2 employees?
02:50I kind of messed it up.
02:51Let me say it again.
02:52How under portable benefits can we be sure that employers are still providing benefits on par with many of the W-2 employees?
03:02With portable benefits.
03:03Well, there's lots of, I mean, look, portability has been an intractable problem in the retirement space.
03:11There's lots of proposals that will address this.
03:14Senator Sanders' pensions for all would be portable.
03:18The state-facilitated auto IRAs has some portability.
03:23I think we have to ensure that we're looking at solutions.
03:27I mean, what we're trying to do is address a concern, which is portability, people changing jobs a lot and benefits going with them.
03:37We need to be exploring those options and make sure that they're options that both protect employees and also are getting...
03:46So I understand the problem.
03:47Now I'm looking for the solution.
03:48Ms. Unwuka, can you take a shot at that?
03:51How, under portable benefits, can we be sure that employers are still providing benefits on par with W-2 employees?
03:57Well, that can be negotiated between the independent contractor and their client, really, who's able to pay in, you know, just as in their contracts,
04:05they can define how much the employer is willing to pay this independent contractor on top of their negotiated rate,
04:11how much they're going to pay into that benefits plan.
04:13And they can match with whatever they're paying their W-2 employees in terms of the benefits that they're providing there.
04:19But let's not forget, these plans can be paid into by multiple different clients and different entities.
04:24So an independent contractor can really do well in terms of negotiating the kind of, you know, benefits package that works for them.
04:32Typically, if you were new to that negotiation and you have seven or ten clients or people you're working for,
04:39are you asking them to match like 10% or 20%?
04:43Is there kind of a range that you're looking for?
04:45It would be up to that independent contractor to decide, sir.
04:48Okay. All right. Thank you, Mr. Chairman. I yield back.
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