Business lobby blasts new health insurance rules

The U.S. Chamber of Commerce is pushing back against new administration rules discouraging businesses from cutting employees’ health benefits or shifting new costs on to them. 

The powerful business lobbyist group says the rules — under which existing health plans exempted from certain provisions of the new health reform law could have their grandfather status revoked for slashing benefits or hiking costs — will force more than half of the country’s insured population out of their current plans. 

"Once grandfathered status is lost, employers will be forced to follow a number of expensive new insurance rules — which will increase costs for employers and employees, threatening the coverage Americans currently have," Randel K. Johnson, the chamber's expert on employee benefits, said in a statement Monday night.

Unveiled Monday by Health and Human Services Secretary Kathleen Sebelius, the new regulations will allow businesses to tweak existing plans with "routine and modest" adjustments to their premium, co-pay and deductible requirements. But "significant" cost and coverage changes, if they have negative effects on employees, will cost the plans their grandfather status and subject them to all the consumer protection provisions of the health reform law. The White House says the rules offer a sound balance between protecting employees and allowing businesses to adjust their plans according to market fluctuations — a message echoed by leading Democrats.

Republicans disagree, arguing that the new regulations are too strict on employers, and will likely force millions of people out of their current health plans. And they have the backing of the business community. 

"The Administration used rosy scenarios, assuming in their analyses a sum of only 4% medical inflation, and that employers will not need to make the kind of changes in the coming years that they needed to make in the last few," Johnson said. "In the real world employers will be under greater pressure, meaning that affording these rules will be even tougher — and that even more than 51% of people will not be able to keep their plans.”