Benefits Execs Prefer Obama's Health-Care Plan

A survey shows that benefits officers aren't wild about either candidate's health proposal, but they see Obama's as doing less harm by Catherine Arnst

Corporate benefits executives by a wide margin prefer Senator Barack Obama's health-care reform proposal, which would compel all employers to offer health insurance, over Senator John McCain's proposed repeal of the tax exclusion for employer–based health coverage, according to a newly released survey. Bottom line, however: Benefits officers aren't wild about either option.

The Washington law firm Miller & Chevalier Chartered, together with the American Benefits Council, a trade association, surveyed 187 benefits officers this summer at large U.S. companies to determine their views on the direction of health-care policy in 2009. The respondents were asked their opinion of several health-care reform proposals, without identifying the reforms with any candidate or political party. When asked about "pay or play," the position favored by Obama that would require employers to either provide health care for employees (play) or pay a tax to the government, 46% of respondents said it would have a strong negative effect on their workforce. But 74% said a repeal of the employee tax exemption for employer-based health coverage—McCain's proposal—would have a strong negative effect.

Employers provide the bulk of nongovernment health insurance in the U.S., and corporations regularly complain about the high cost of this benefit. General Motors (GM), for example, estimates that employee health benefits add about $1,500 to the cost of every car it makes. But the survey found that few companies want to abandon this status quo: 87% of respondents said employees would prefer to receive health insurance through their employers, even if similarly priced options were available through other sources.

Companies Want a Say

James Klein, president of the Americans Benefits Council, says he hears this sentiment over and over from his members. "Companies know they are going to end up paying the bill anyway so they want to continue to have an influence on how those benefits are designed and who is held accountable," he says.

What they don't want, however, is a patchwork system of state reforms. Several states, led by Massachusetts and Maine, have enacted or are considering some form of universal coverage involving employers. But 81% of the respondents support maintaining federal standards, and 84% oppose regulation of employer-sponsored health plans at the state level.

Although most of the debate in the Presidential campaign has focused on extending coverage to the uninsured, this is not the issue that resonates with benefits officers. Instead, 74% would like to see more focus on improving quality, and 58% want more attention paid to reducing health-care costs. In fact, when respondents were asked to identify their company's single biggest health-care burden, 47% of respondents identified cost, more than any other category. "Survey respondents cited health-care costs over and over again," says Miller & Chevalier attorney Susan Relland. The entire survey can be found here.