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FIVE YEARS OF BROKEN PROMISES: HOW THE 

PRESIDENT’S HEALTH CARE LAW IS AFFECTING 

AMERICA’S WORKPLACES 

HEARING 

BEFORE THE

SUBCOMMITTEE ON HEALTH, 

EMPLOYMENT, LABOR, AND PENSIONS 

COMMITTEE ON EDUCATION 

AND THE WORKFORCE 

U.S. HOUSE OF REPRESENTATIVES

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

HEARING HELD IN WASHINGTON, DC, APRIL 14, 2015 

Serial No. 114–8 

Printed for the use of the Committee on Education and the Workforce 

( 

Available via the World Wide Web: 

www.gpo.gov/fdsys/browse/committee.action?chamber=house&committee=education 

or 

Committee address: http://edworkforce.house.gov 

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(II) 

COMMITTEE ON EDUCATION AND THE WORKFORCE 

JOHN KLINE, Minnesota, Chairman 

Joe Wilson, South Carolina 

Virginia Foxx, North Carolina 

Duncan Hunter, California 

David P. Roe, Tennessee 

Glenn Thompson, Pennsylvania 

Tim Walberg, Michigan 

Matt Salmon, Arizona 

Brett Guthrie, Kentucky 

Todd Rokita, Indiana 

Lou Barletta, Pennsylvania 

Joseph J. Heck, Nevada 

Luke Messer, Indiana 

Bradley Byrne, Alabama 

David Brat, Virginia 

Buddy Carter, Georgia 

Michael D. Bishop, Michigan 

Glenn Grothman, Wisconsin 

Steve Russell, Oklahoma 

Carlos Curbelo, Florida 

Elise Stefanik, New York 

Rick Allen, Georgia 

Robert C. ‘‘Bobby’’ Scott, Virginia 

Ranking Member 

Rube ́n Hinojosa, Texas 

Susan A. Davis, California 

Rau ́l M. Grijalva, Arizona 

Joe Courtney, Connecticut 

Marcia L. Fudge, Ohio 

Jared Polis, Colorado 

Gregorio Kilili Camacho Sablan, 

Northern Mariana Islands 

Frederica S. Wilson, Florida 

Suzanne Bonamici, Oregon 

Mark Pocan, Wisconsin 

Mark Takano, California 

Hakeem S. Jeffries, New York 

Katherine M. Clark, Massachusetts 

Alma S. Adams, North Carolina 

Mark DeSaulnier, California 

Juliane Sullivan, Staff Director 

Denise Forte, Minority Staff Director 

SUBCOMMITTEE ON HEALTH, EMPLOYMENT, LABOR, AND PENSIONS 

DAVID P. ROE, Tennessee, Chairman 

Joe Wilson, South Carolina 

Virginia Foxx, North Carolina 

Tim Walberg, Michigan 

Matt Salmon, Arizona 

Brett Guthrie, Kentucky 

Lou Barletta, Pennsylvania 

Joseph J. Heck, Nevada 

Luke Messer, Indiana 

Bradley Byrne, Alabama 

Buddy Carter, Georgia 

Glenn Grothman, Wisconsin 

Rick Allen, Georgia 

Jared Polis, Colorado, 

Ranking Member 

Joe Courtney, Connecticut 

Mark Pocan, Wisconsin 

Rube ́n Hinojosa, Texas 

Gregorio Kilili Camacho Sablan, 

Northern Mariana Islands 

Frederica S. Wilson, Florida 

Suzanne Bonamici, Oregon 

Mark Takano, California 

Hakeem S. Jeffries, New York 

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(III) 

C O N T E N T S 

Page 

Hearing held on April 14, 2015 .............................................................................. 1 

Statement of Members: 

Roe, Hon. David P., Chairman, Subcommittee on Health, Employment, 

Labor, and Pensions ..................................................................................... 1 

Prepared statement of ............................................................................... 3 

Polis, Hon. Jared, Ranking Member, Subcommittee on Health, Employment, Labor, and Pensions ........................................................................... 4 

Prepared statement of ............................................................................... 6 

Statement of Witnesses: 

Troy, Hon. Tevi, Ph.D., President, American Health Policy Institute, 

Washington, DC ............................................................................................ 9 

Prepared statement of ............................................................................... 11 

Paal Jr., Mr. Rutland, President, Rutland Beard Floral Group, Scotch 

Plains, NJ ...................................................................................................... 17 

Prepared statement of ............................................................................... 19 

Brey, Mr. Michael, President, Brey Corporation t/a Hobby Works(R), 

WingTOTE Manufacturing, LLC, Laurel, MD ........................................... 26 

Prepared statement of ............................................................................... 28 

Roberts, Ms. Sally, Human Resources Director, Morris Communications 

Company, LLC, Augusta, GA ....................................................................... 30 

Prepared statement of ............................................................................... 32 

Additional Submissions: 

Dr. Roe: ..............................................................................................................

Prepared Statement of the National Coalition on Benefits ................... 76 

Courtney, Hon. Joe, a Representative in Congress from the State of 

Connecticut: 

Chart: 2014 Connecticut Insurance Rate Filings for On/Off Exchange 

2015 Policies ........................................................................................... 58 

Hinojosa, Hon. Rube ́n, a Representative in Congress from the State of 

Texas: 

Letter dated April 14, 2015, from Small Business Majority .................. 67 

Pocan, Hon. Mark, a Representative in Congress from the State of Wisconsin: 

Slide: Average Premiums for Employer-Based Family Coverage .......... 50 

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(1) 

FIVE YEARS OF BROKEN PROMISES: HOW 

THE PRESIDENT’S HEALTH CARE LAW IS 

AFFECTING AMERICA’S WORKPLACES 

Tuesday, April 14, 2015 

House of Representatives 

Subcommittee on 

Health, Employment, Labor, and Pensions 

Committee on Education and the Workforce 

Washington, D.C. 

The Subcommittee met, pursuant to call, at 10:03 a.m., in room 

2175, Rayburn House Office Building, Hon. David P. Roe [chairman 

of the subcommittee] presiding. 

Present: Representatives Roe, Wilson, Foxx, Walberg, Guthrie, 

Messer, Carter, Grothman, Allen, Polis, Courtney, Pocan, Hinojosa, 

Wilson, Bonamici, Takano. 

Also present: Representative Kline and Scott. 

Staff present: Andrew Banducci, Professional Staff Member; 

Janelle Belland, Coalitions and Members Services Coordinator; Ed 

Gilroy, Director of Workforce Policy; Christie Herman, Professional 

Staff Member; Nancy Locke, Chief Clerk; Zachary McHenry, Legislative Assistant; Michelle Neblett, Professional Staff Member; 

Brian Newell, Communications Director; Krisann Pearce, General 

Counsel; Lauren Reddington, Deputy Press Secretary; Alissa 

Strawcutter, Deputy Clerk; Juliane Sullivan, Staff Director; Alexa 

Turner, Legislative Assistant; Tylease Alli, Minority Clerk/Intern 

and Fellow Coordinator; Austin Barbera, Minority Staff Assistant; 

Melissa Greenberg, Minority Labor Policy Associate; Carolyn 

Hughes, Minority Senior Labor Policy Advisor; Brian Kennedy, Minority General Counsel; Amy Peake, Minority Labor Policy Advisor; 

Arika Trim, Minority Press Secretary. 

Chairman ROE. Thank you, all. A quorum being present, the 

Subcommittee on Health, Employment, Labor, and Pensions will 

come to order. 

As a practicing physician for more than 30 years, I have experienced firsthand the marvels of the United States health care system and how it has helped improve the lives of countless individuals. But I also saw the challenges of our health care system; one 

that was too bureaucratic, too costly, and leaves too many Americans without the coverage they need to care for themselves and 

their families. 

CEWDOCROOM with DISTILLER

2 

Health care reform should have been an opportunity to preserve 

and build on what works with common sense market-based reforms 

that would expand access to more affordable coverage. Instead, a 

costly government takeover of health care was imposed on the 

American people. And five years later, the law continues to wreak 

havoc on families, businesses, and even schools. 

It is hard to recall a time when supporters of a law promised so 

much and delivered so little. The American people were promised 

if they liked their health care plan, you could keep it. Not true. 

Millions of Americans have received letters notifying them that 

their health insurance coverage has been canceled because it 

doesn’t comply with the dictates of the health care law. Patients 

have learned in horror that their trusted doctors are no longer in 

their health insurance networks. And it will only get worse as the 

narrowing of networks is going to continue to help hold cost down, 

as we will hear later. 

The nonpartisan Congressional Budget Office projects seven million people will lose their employer-sponsored coverage over the 

next 10 years. The American people were promised that health care 

costs would go down. In fact, the President promised to lower premiums for the average family by $2,500, not true. 

According to the Kaiser Family Foundation, health care costs for 

the average family increased by 26 percent during the last five 

years. The average employee with an employer-sponsored insurance plan experienced a 7 percent increase in their share of health 

care costs. 

Finally, the American people were told that the health care law 

would boost the economy. Again, not true. More than 450 employers have publicly stated they are cutting hours or making other 

staffing changes to avoid the law’s punitive mandates, including 

the University of Colorado in Colorado Springs, Trig’s Supermarkets, Coach’s Fast Food in Wisconsin, Shari’s Restaurants in 

Oregon, and Henrico County School District, as well as other school 

districts across the Commonwealth of Virginia and including my 

home state of Tennessee. 

The Congressional Budget Office estimates that the law will result in two million fewer full-time workers. Many of these difficult 

changes are taking place in the service industry, which means 

lower wage workers are bearing the brunt of the Affordable Care 

Act’s burden. Schools are also cutting hours, undermining the quality of education for America’s students. 

We have heard time and again from the Administration that 

these are mere antidotes or, in the words of then-Secretary 

Sebelius, ‘‘speculation.’’ Yet, even those who supported the health 

care law have no choice but to recognize its harmful consequences. 

Members of the AFL–CIO endorsed a resolution that warned of an 

‘‘underclass of less than 30 hour workers,’’ as employers seek to 

avoid paying penalties under the health care law. 

The National Brotherhood of Teamsters and other union leaders 

said the law will, ‘‘shatter not only our hard-earned health benefits, 

but destroy the foundation of the 40-hour work week that is the 

backbone of the American middle-class.’’ 

CEWDOCROOM with DISTILLER

3 

Finally, the International Brotherhood of Electrical Workers lamented that the law, ‘‘imposes increased benefit costs, fees, and 

new taxes on our multiemployer health care plans.’’ 

Unfortunately, more pain is right around the corner. In just a 

few short years, nearly half of all large employers will be hit with 

the so-called ‘‘Cadillac tax’’. It is estimated the federal government 

will collect more than $85 billion through this tax over the next 

decade. That is money that could have been used to raise wages 

or create new jobs. Instead, it will go into the coffers of the federal 

government. And don’t forget, that right now, the Supreme Court 

is deciding a case resulting in millions of Americans being stuck 

with government-run health insurance they can’t afford. 

Remarkably, when it is all said and done, after all the broken 

promises, fewer jobs, lost wages, Web site glitches, and canceled 

health care plans, 35 million individuals will still be without health 

insurance. The American people can no longer afford this costly 

mistake. And it is time to move the country away from this government-run health care scheme toward a more patient-centered 

health care system. 

A key part of that effort is oversight hearings like the one we are 

holding here today. Congress must shine a light on the President’s 

fatally flawed law. We have a very distinguished panel of witnesses 

here today to help us do just that. I would note for my colleagues 

today that the panel includes three employers to share their perspectives on how the law is impacting their workplaces. I look forward to a robust discussion. 

And with that, I would like to congratulate the new ranking 

member, Jared Polis. Congressman Polis and I came in with the 

same class. He is an incredibly capable member of Congress. And 

I am really pleased to be serving with him today. And I will now 

yield for his opening remarks. 

[The statement of Chairman Roe follows:] 

Prepared Statement of Roe Hon. David P., Chairman, Subcommittee on 

Health, Employment, Labor, and Pensions 

As a practicing physician for more than 30 years, I experienced first-hand the 

marvels of the U.S. health care system and how it has helped improve the lives of 

countless individuals. But I also saw the challenges of our health care system, one 

that is too bureaucratic, too costly, and leaves too many Americans without the coverage they need to care for themselves and their loved ones. 

Health care reform should have been an opportunity to preserve and build on 

what works with commonsense, market-based reforms that would expand access to 

more affordable coverage. Instead, a costly government takeover of health care was 

imposed on the American people, and five years later the law continues wreaking 

havoc on families, businesses, and even schools. It’s hard to recall a time when supporters of a law promised so much and delivered so little. 

The American people were promised that if they liked their health care plan they 

could keep it. Not true. Millions of Americans have received letters notifying then 

that their health insurance is being cancelled because it doesn’t comply with the dictates of the health care law. Patients have learned in horror that their trusted doctors are no longer in their health insurance networks. And it will only get worse. 

The nonpartisan Congressional Budget Office projects seven million people will lose 

their employer-sponsored coverage over the next 10 years. 

The American people were promised health care costs would go down. In fact, the 

president promised to lower premiums for the average family by $2,500. Not true. 

According to the Kaiser Family Foundation, health care costs for the average family 

increased by 26 percent during the last five years. The average employee with an 

employer-sponsored insurance plan experienced a seven percent increase in their 

share of health care costs. 

CEWDOCROOM with DISTILLER

4 

Finally, the American people were told the health care law would boost the economy. Again, not true. More than 450 employers have publicly stated they are cutting 

hours or making other staffing changes to avoid the law’s punitive mandates, including the University of Colorado in Colorado Springs, Trig’s Supermarkets and 

Coach’s Fast Food in Wisconsin, Shari’s restaurants in Oregon, and the Henrico 

County School District – as well as other school districts – across the Commonwealth of Virginia. The Congressional Budget Office estimates the law will result 

in two million fewer full-time workers. 

Many of these difficult changes are taking place in the service industry, which 

means lower-wage workers are bearing the brunt of the ObamaCare burden. Schools 

are also cutting hours, undermining the quality of education America’s students deserve. We’ve heard time and again from the administration that these are mere 

anecdotes or, in the words of then-Secretary Sebelius, ‘‘speculation.’’ Yet even those 

who supported the health care law have no choice but to recognize its harmful consequences. 

Members of the AFL–CIO endorsed a resolution that warned of an ‘‘underclass of 

less than 30-hour-workers’’ as employers seek to avoid paying penalties under the 

health care law. The International Brotherhood of Teamsters and other union leaders said the law will ‘‘shatter not only our hard-earned health benefits, but destroy 

the foundation of the 40 hour work week that is the backbone of the American middle-class.’’ Finally, the International Brotherhood of Electrical Workers lamented 

that the law ‘‘imposes increased benefit costs, fees, and new taxes on our [multiemployer health care] plans.’’ 

Unfortunately, more pain is right around the corner. In just a few short years, 

nearly half of all large employers will be hit by the so-called ‘‘Cadillac tax.’’ It’s estimated the federal government will collect more than $85 billion through this tax 

over the next decade. That’s money that could be used to raise wages or create new 

jobs; instead it will go into the coffers of the federal government. And don’t forget, 

that right now, the Supreme Court is deciding a case that may result in millions 

of Americans being stuck with government-run health insurance they cannot afford. 

Remarkably, when it’s all said and done – after all the broken promises, fewer 

jobs, lost wages, website glitches, and cancelled health care plans – 35 million individuals will still be without health insurance. The American people can no longer 

afford this costly mistake. It is time to move the country away from this government-run health care scheme and toward a more patient-centered health care system. 

A key part of that effort is oversight hearings like the one we are holding today. 

Congress must shine a light on the president’s fatally flawed law. We have a very 

distinguished panel of witnesses to help us do just that. I would note for my colleagues that today’s panel includes three employers to share their perspectives on 

how the law is impacting their workplaces. I look forward to a robust discussion, 

and with that, will yield to Ranking Member Polis for his opening remarks. 

Mr. POLIS. Thank you, Mr. Chairman. 

I want to acknowledge that I think we are all glad that Chairman Roe is back in his seat leading this subcommittee. I am very 

much looking forward to working with him. And on behalf of the 

Democrats on the Committee, we want to as well join our Republican friends in offering our condolences to you and your family. 

And I would like to ask unanimous consent for a moment of silence 

in honor of Pam Roe and to convey our thoughts and prayers to the 

Roe family at this time. 

[Moment of silence.] 

Thank you. We are truly glad to have you back. Thank you. 

As to the business at hand. After 56 attempts to repeal the Affordable Care Act since the law was passed, I was hoping that we 

could move forward with improving the Affordable Care Act and 

make it work better and reduce costs even more. We all have a lot 

of ideas, like improving access to preventative health care services, 

making sure workers receive fair treatment in the workplace. 

Many of us are very interested in some of the ways that the AffordCEWDOCROOM with DISTILLER

5 

able Care Act is paid for and how those can be changed or paid for 

to modify cost. 

But instead, we are spending our time attacking, rather than improving, a law that is working for millions of Americans who 

gained quality affordable health insurance, for tens of thousands of 

businesses who have saved costs on health care, and millions of 

others who have been able to enroll in Medicaid for the first time, 

particularly in states that have expanded Medicaid eligibility. 

The most recent estimate by the Congressional Budget Office 

found that a total of 27 million people will gain access to health 

coverage through the Affordable Care Act who otherwise would not 

have had it, to say nothing of millions of Americans who have coverage for preexisting conditions for the first time, are no longer 

subject to lifetime caps that could leave them bankrupt if they get 

a serious illness, or finally have access to comprehensive preventative services and affordable prescription drugs. 

According to a newly-released Gallop poll, the percentage of 

Americans lacking health insurance has dropped more than 5 percent since the marketplace opened at the end of 2013. In my home 

state of Colorado, 16.5 percent of people lacked health insurance 

before the Affordable Care Act. And according to a recent Kaiser 

Family Foundation study, the figures dropped to 9 percent this last 

June. And health care premiums are growing at slower rates than 

they have in decades, for both businesses, as well as individuals. 

I think it is clear the Affordable Care Act is working for consumers, working for businesses. Of course it is not perfect. But the 

Affordable Care Act works because of the shared responsibility of 

individuals, federal and state governments, and employers. 

I have started several businesses myself before I came to Congress. And as an employer, I knew that before the Affordable Care 

Act, health care costs were climbing at an out-of-control rate, double digit inflation every year. Health care choices were slim to none 

in many areas. And people were having to get a job in businesses 

like mine sometimes because they needed health insurance, not because they needed the income. 

The five years since the ACA has been implemented of course 

hasn’t been perfect. But on a whole, cost increases are down, there 

are more choices for employees, and more ways that businesses can 

get coverage, as well as more tools to help businesses affords to 

cover their employees. 

The ACA has brought down cost and spread the responsibility 

among everyone, employers and employees. Under the ACA, small 

employers are more likely to offer insurance and they are more 

likely to want to offer insurance. Many receive a tax credit to pay 

for a portion of the coverage for their employees. And the exchanges allow small employers to compete to find good rates, which 

was impossible to do before because according to insurance companies, small companies were simply too small. 

Nationwide, 360,000 small businesses have used tax credits to 

provide coverage to their employees. And as a result, businesses 

are now able to recruit and keep quality employees without bankrupting the company or their workers. Instead of huge premium increases during the past five years, costs have grown at historically 

low rates. Instead of workers choosing between coming to work seCEWDOCROOM with DISTILLER

6 

riously ill and putting food on the table, workers will be able to receive quality health care that allows them to stay on the job and 

keep their paycheck. And instead of having a stressed, unhealthy 

workforce, businesses will have a happy, healthy, and productive 

workforce, which is good for the families and good for the businesses. 

Just one more example. We have an automotive company in Colorado owned by Craig Lear who believes it is his responsibility to 

keep his employees happy and healthy. As he stated, ‘‘It is hard to 

find good employees, so you have to take care of them to retain 

them. And health insurance is part of that.’’ ACA helped him cut 

his health care costs in half and his business is thriving, thanks 

to the Affordable Care Act and the exchanges that have been put 

up. As he said, this is a huge step in the right direction. It makes 

sense, and in 10 years we will look back and see that. 

I hope, Mr. Chair, we are able to look back even sooner than 10 

years. We are halfway to that mark. And I look forward to hearing 

the testimony from our witnesses today. And I yield back the balance of my time. 

[The statement of Mr. Polis follows:] 

Prepared Statement of Polis, Hon. Jared, Subcommittee on Health, 

Employment, Labor, and Pensions 

Thank you. I first want to acknowledge that I am glad Chairman Roe is back in 

his seat leading this subcommittee, and I look forward to working with him. I want 

to offer my sincere condolences to him and his family. I know this must be an extremely difficult time. All of our thoughts and prayers are with you in this trying 

time. 

And for the business at hand. Today, once again, we are wasting our precious 

time on this subcommittee rehashing tired debates about the Affordable Care Act. 

After no fewer than 56 unsuccessful attempts to repeal the ACA since the law was 

passed five years ago, I would hope that we on the HELP subcommittee could move 

onto more pressing matters—like improving access to preventative health services 

and making sure all workers have fair wages and receive fair treatment in the 

workplace. 

Sadly, we’re instead once again spending our time attacking—not improving, attacking—a law that is working for millions of Americans who have gained quality, 

affordable health insurance through the marketplace for the first time, as well as 

millions of others who have been able to enroll in Medicaid for the first time. 

The most recent estimate by the Congressional Budget Office found that a total 

of 27 million people will gain access to health coverage through the ACA who otherwise would not have had it, to say nothing of the millions of Americans who: 

* Have coverage for pre-existing conditions for the first time; 

* Are no longer subjected to lifetime caps that can leave them bankrupt if they 

get a serious illness; 

* Finally have access to comprehensive preventative services and affordable prescription drugs for the first time; 

* And have been able to afford health insurance in young adulthood by staying 

on their parents’ plans. 

According to a newly released Gallup poll, the percentage of Americans lacking 

health insurance has dropped more than 5 percent since the marketplace opened at 

the end of 2013. 

In my home state of Colorado, 16.5 percent of folks lacked health insurance before 

the ACA took; according to June Kaiser Family Foundation study, that figure had 

dropped to nine percent by last June —all while health care premiums are growing 

at slower rates than they have in decades. 

The Affordable Care Act is working—for consumers and for businesses. It may not 

be perfect, but the ACA works because of the shared responsibility of individuals, 

federal and state governments, and employers. 

I have started several businesses myself. And as an employer I know that before 

ACA, health care costs were climbing at an out-of-control rate for employers and 

employees. Health care choices were slim to none in many areas and states, and 

CEWDOCROOM with DISTILLER

7 

people were having to get a job in businesses like mine sometimes because they 

needed the health insurance, not because they needed the income. 

The five years since ACA have been implemented has not always been perfect, 

but costs are down and choices are up for employees and bUsinesses. 

1.n reality, most companies are not impacted by the employer mandate. 96 percent of employers are small businesses and have fewer than 50 workers and are 

thus exempt, and the overwhelming majority of the remaining 4 percent already 

offer quality coverage. And the vast majority of good business owners provide health 

insurance to their employees, and this is causing little to no change for them. 

In fact, ACA has brought costs down and spread the responsibility among everyone—both employers and employees. Under ACA small employers are more likely 

to offer insurance, and they are more likely to want to. Many can receive a tax credit to pay for a portion of coverage for their employees, and the exchanges allow 

small employers to compete to find good rates, which was impossible to do before 

because according to insurance companies they were too small. 

Nationwide, more than 360,000 small businesses have used tax credits to provide 

coverage to their employees. As a result, businesses are now able to recruit and 

keep quality employees without bankrupting the company and the workers. 

Now, instead of huge premium increases, during the past five years costs have 

grown at historically low rats. 

Now, instead of workers choosing between coming to work seriously ill and putting food on the table, workers will be able to receive quality health care that allows 

them to stay on the job and keep their paycheck. 

Now, instead of having a stressed, unhealthy workforce, businesses will have a 

happy, healthy and productive workforce, which is good for families and good for 

their businesses’ bottom line. 

As just one example, we have an automotive company in Colorado owned by Craig 

Lear who believes it’s his responsibility to keep his employees happy and healthy. 

As he stated, ‘‘It’s hard to find good employees, so you have to take care of them 

to retain them, and health insurance is part of that.’’ 

As a small business owner he believes that before ACA health care costs were a 

huge burden to his company, threatening to put him out of business. ACA helped 

him cut his healthcare costs in half. He feels 

that because of ACA and the exchanges that have been set up, small business 

owners now have a voice and someone’s watching out for them, in comparison to 

the previously unaffordable small business health insurance of the past. Quote: 

‘‘This is a huge step in the right direction. It makes sense and in 10 years we’ll look 

back and see that.’’ 

Even with all of improvements this law has created in the lives of individuals and 

business owners, we continue to rehash the same arguments over and over again. 

The Majority on this committee is whiling away our time here talking about ‘‘repeal’’—which is bad policy and is simply not going to happen. 

I would request that instead of spending time working to repeal a bill that is overwhelmingly doing good for Americans and the economy we talk about changes we 

can make to the Affordable Care Act to ensure that it functions as intended over 

the long-term. Or even better, we should be spending time marking up bills and 

talking about issues that I hope everyone agrees should be a top priority. 

We should be working to fix our multi-employer pension system, expanding opportunities for all workers, creating a fair and equitable wage for women and men, creating good paying jobs for all, protect worker’s rights, and expanding our economy. 

The list goes on and on. We have had 56 votes in the full house to repeal ACA and 

countless hearings in committees. Instead of rehashing the same stubborn ‘‘the sky 

is falling’’ argument let’s work together to expand our economy and create jobs for 

the middle-class. 

I look forward to hearing from our witnesses, especially those who are actually 

running a business and not lawyers or lobbyists. 

As a businessman and a father I know that ACA is working to protect our companies, our employees and our families. And this ‘‘sky is falling’’ talk that we hear over 

and over is just not coming to fruition. 

I am interested to hear how everyone thinks we can move beyond this rhetoric 

and begin to work together to perfect a good start that is helping our businesses, 

creating good paying jobs, and saving lives. 

I yield back the remainder of my time. 

Chairman ROE. Thank you, Mr. Polis. And thank you for your 

kind words, also. I appreciate it very much. 

CEWDOCROOM with DISTILLER

8 

And pursuant to committee rule 7(c), all committee members will 

be permitted to submit written statements to be included in the 

permanent hearing record. And without objection, the hearing 

record will remain open for 14 days to allow statements, questions 

for the record, and other extraneous material referenced during the 

hearings to be submitted in the official hearing record. 

It is now my pleasure to introduce our distinguished panel of witnesses. First, Dr. Tevi Troy is president of the American Health 

Policy Institute here in Washington, D.C. Welcome. Previously, Dr. 

Troy held numerous positions in the federal government, including 

serving as deputy secretary of Health and Human Services beginning in 2007, where he oversaw all operations, including Medicare, 

Medicaid, Public Health, medical research, food and drug safety, 

welfare, child and family services, disease prevention, and mental 

health. Woo, that was a mouthful. 

Mr. Rutland ‘‘Skip’’ Paal, Jr. is the owner of Rutland Beard Floral Group, Inc. in Baltimore, Maryland. Mr. Paal is a fourth generation business owner of Rutland Beard Floral Group, Inc. Since 

taking over the business from his parents, Mr. Paal expanded the 

business over the last 10 years from a single retail shop to a 

multistate business with import, wholesale, and retail operations. 

Thank you for being here today. 

Mr. Michael Brey is the founder and president of Brey Corporation in Laurel, Maryland. Mr. Brey started Brey Corporation in 

1992 and acquired retailer Hobby Works in 1993. In addition, Mr. 

Brey has served on several corporate boards, including the board 

finance committee of Dimensions Healthcare, a health care provider. Welcome, Mr. Brey. 

Now I will take this opportunity to yield to Representative Rick 

Allen to introduce our final witness. 

Mr. ALLEN. Thank you, Mr. Chairman. I am pleased to introduce 

Ms. Sally Roberts from Augusta, Georgia, who is the human resources director of Morris Communications Company, LLC. Morris 

Communications is a privately-held media company with diversified holdings that include newspaper and magazine publishing, 

outdoor advertising, radio broadcasting, book publishing, and distribution and online services. 

She is here today to testify on behalf of the Society for Human 

Resource Management. Ms. Roberts is in charge of the company’s 

magazine and radio division, where she manages the benefits for 

Morris’ 3,000 employees in more than 20 states. Ms. Roberts works 

with insurance providers and consultants on medical and dental 

plans to design employer rates and employer premiums and coordinates open enrollment with brochure design, online support, employee meetings, and enrollment processes. 

She also formed a wellness committee and developed a monthly 

online news letter, ‘‘Wellness Information and News.’’ And I just 

happen to have the front page of Monday’s newspaper. And it 

shows the Lone Star hero, the new champion of the Master’s Golf 

Tournament, Mr. Spieth, from the Great State of Texas. 

So Ms. Roberts, welcome. And thank you for being with us today. 

Chairman ROE. Thank you all. Now I ask the witnesses to stand 

and raise your right hand. Thank you. 

[Witnesses sworn.] 

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Let the record reflect witnesses answered in the affirmative. You 

may be seated. 

Before I recognize you all for your testimony, let me briefly explain our lighting system. You will each have five minutes to 

present your testimony. When you begin, the light in front of you 

will turn green. When one minute is left it will turn yellow. And 

when your time is expired the light will turn red. If you are in the 

middle of a sentence, I am not going to gavel you. You can go 

ahead and finish your thoughts. So we are not going to do that. But 

I will adhere to the five-minute rule. 

At that point, I will ask you to wrap up your remarks as best 

able. After everyone has testified, each member will have five minutes to ask questions of the panel. 

Now, Dr. Troy, begin your testimony. 

STATEMENT OF HON. TEVI TROY, PH.D., PRESIDENT, 

AMERICAN HEALTH POLICY INSTITUTE, WASHINGTON, DC 

Dr. TROY. Mr. Chairman, Mr. Ranking Member, members of the 

Subcommittee, I am Tevi Troy, president of the American Health 

Policy Institute, former deputy secretary of HHS, and a former senior White House aide. 

American Health Policy Institute is a think-tank dedicated to 

studying the issue of employer-sponsored health insurance, and 

highlighting the challenges employers face in offering care to their 

employees and their dependents. The institute publishes studies on 

employer-sponsored health insurance and examines employer responses to health care challenges. 

These roles give the institute a unique perspective on development and employer-sponsored insurance and the future state of 

health care. Today I would like to talk about the impact of the 

ACA’s high-cost excise tax, the cost of the ACA to employers, and 

the affordability of health care to employees. These three factors 

signal big changes ahead in employer-sponsored care, which is currently how 169 million Americans get their health coverage. 

Under the ACA, an excise tax on high-cost health plans, the socalled Cadillac tax, takes effect in 2018. The potential impact of 

this tax is already driving employers, including corporations, state 

government, local government, and universities, to reassess their 

health care plans and reconsider their future role in providing 

health care benefits. 

The tax is causing employers to reduce health care benefits to 

limit their exposure to the tax. In the future though, continued 

medical inflation and other factors will make it very difficult for 

employers to avoid the tax. Big increases in health care costs will 

eventually cause Chevrolet benefit plans to be taxed as Cadillacs. 

That in turn will result in the burden of the excise tax falling on 

a significant number of American employees and their families. 

Last November, the institute published a study on the impacts 

of this excise tax, which found that from 2018 to 2024, the excise 

tax could cost 12.1 million employees an average of $1,050 in higher payroll and income taxes per year if employers increase their 

taxable wages as they reduce the cost of health care benefits. 

Alternatively, these employees could see up to a $6,150 reduction 

in their health care benefits and little or no increase in their 

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wages. Large employers subject to the excise tax in 2018 will pay 

an average of $1 million that year and an average of $2.1 million 

per year from 2018 to 2024, or over $2,700 per employee. 

In 2018, the excise tax is anticipated to hit 17 percent of all 

American businesses and 38 percent of large employers. By 2031, 

the cost of the average family health care plan is expected to hit 

the excise tax threshold. Many state and local government health 

plans will also be impacted by the high-cost excise tax because they 

tend to offer more expensive health plans than private sector employers. In addition, unionized employers already need to address 

potential excise tax costs in upcoming contract negotiations. 

Overall, the threat of the excise tax is driving employers to fundamentally reassess their plans in a way that will have a real impact on employees and their families. Last year, an institute study 

looked at direct cost to companies from the ACA’s requirements, 

over and above projected employer health care cost trends within 

the ACA. The study found that over the next decade, the cost of 

the ACA to large employers is estimated between $4,800 and 

$5,900 per employee. 

These large employers will see overall ACA-related cost hikes of between $163 million and $200 million per large employer. And the 

total cost of the ACA to all large U.S. employers over the next 10 

years is estimated to be from $151 million to $186 billion. These 

cost hikes, combined with a fear of triggering the excise tax, are 

leading to employer reactions that will have a significant impact on 

the recipients of employer-based care. 

Under the ACA, large employers must offer affordable plans and 

coverage to full-time employees. Coverage is deemed not affordable 

if the employee’s share of their annual premium for self-coverage— 

for self-only coverage is greater than 9.5 percent of their annual 

household health care. However, the average employee premium 

for family coverage accounted for more than 9.5 percent of family 

income for 4.7 million employees. Further, 10.4 million employees 

with families, or 38.1 percent, faced an average family premium 

and deductible that could consume 9.5 percent of their family income. By 2025, that 38 percent becomes 53 percent. 

So the combination of a creeping excise tax and high marginal 

ACA costs is driving employers to look at significant changes to 

their health care offerings. Some employers will exit the system. 

But we believe that more will look to make serious changes in approach. These employer-based changes will likely include more 

cost-sharing components as employers seek to avoid triggering the 

excise tax in 2018. The cost-sharing then impacts the affordability 

of health care for employees, who will then become unsatisfied with 

their employer-sponsored care and look to Washington for answers. 

Mr. Chairman, Mr. Ranking Member, members of the Subcommittee, I thank you for your time here today. And I look forward to any questions that you may have. 

[The statement of Dr. Troy follows:] 

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Chairman ROE. Thank you, Dr. Troy. 

Mr. Paal, you are recognized for five minutes. 

STATEMENT OF MR. RUTLAND PAAL, JR., PRESIDENT, RUTLAND BEARD FLORAL GROUP, SCOTCH PLAINS, NEW JERSEY 

Mr. PAAL. Mr. Chairman and distinguished members, thank you 

for inviting me to present testimony before the Committee regarding my company’s experience with the Affordable Care Act. 

My name is Skip Paal. And I am a fourth generation florist. My 

great grandfather opened a flower shop and greenhouses outside 

Baltimore in 1923. Today, my company employs over 150 people 

and operates at 11 different locations in Maryland and New Jersey, 

including my great grandfather’s original location. 

We are a family business. Our employees are extensions of our 

family. And we have always felt an obligation to take care of our 

employees accordingly. We have been providing health care to our 

full-time employees for decades. When cash flow was tight, and I 

and other family members skipped paychecks, we still contributed 

to our employee’s health care plans. Not because we had to, but because it is the right thing to do. 

We also offer a simple IRA plan so that our employees have the 

opportunity to retire with something after their years of service. 

We established this retirement plan not because we had to, but because it is the right thing to do. 

We try to help our employees in any way we can. Last month, 

I gave a plane ticket to an employee to spend some time with her 

daughter because she will be missing her daughter’s graduation 

from college to work for us during the Mother’s Day holiday, one 

of our peak times of the year. I didn’t do that because I had to. In 

fact, the employee didn’t ask for it. I did it because it is the right 

thing to do. 

My companies employed a total of 152 individuals over our most 

recent measurement period. Of this total, 28 would be considered 

full-time under the ACA, 85 part-time, and 39 temporary. 

In order to comply with the ACA, it took me over 40 hours to collect all the data on our employees’ hours of service, create spreadsheets, perform calculations, select appropriate plans, and make offers of coverage. In the past, this process took me about an hour 

of meeting with our health insurance broker. Since my company is 

not large enough to have an HR manager, that responsibility falls 

to me. 

As an employer, I would improve the bottom line if I did not offer 

coverage to my employees. Even though I am considered a large 

employer under the ACA, with 51 FTEs. If I stopped offering 

health care coverage for my employees my penalty would be zero, 

since I have only 28 actual full-time employees. This would result 

in a savings to the company of over $60,000 a year. We continue 

to offer the coverage because it is the right thing to do. 

The ACA has provided numerous challenges to me and my company; the confusion about what is needed for compliance today, 

what will be needed for compliance in the years ahead, and how 

to correctly report our data is frustrating, to say the least. I remain 

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cautious about continuing to expand my business because I just 

don’t know what the future impacts of the ACA will be. 

The ACA has also placed me at a competitive disadvantage 

against other florists and Main Street retailers. Since my employees are offered employee-sponsored coverage, they are ineligible for 

a subsidy from the exchange and feel forced into accepting the coverage offered by my company’s group plan. Because of the ACA, one of my employees has almost $2,300 less 

in annual expendable income as a result of being employed by me 

versus another flower shop down the street that does not require 

health insurance coverage. This isn’t rational, as it penalizes the 

employee working for me and prevents my company from attaining 

good employees, while continuing to be sustainable. 

It is my hope that Congress will work diligently to craft and pass 

legislation to address the unnecessary burdens and complexities 

the ACA has created. One example is the STARS Act, which would 

provide a technical change to the ACA because the law has conflicting definitions and applications of what a ‘‘seasonal worker’’ is. 

That one provision is causing confusion and a massive burden to 

small business throughout the country. 

Thank you again for giving me the opportunity to present this 

testimony before the Committee. 

[The statement of Mr. Paal follows:] 

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Chairman ROE. Thank you, Mr. Paal. 

Mr. Brey, you are recognized for five minutes. 

STATEMENT OF MR. MICHAEL BREY, PRESIDENT, BREY CORPORATION T/A HOBBY WORKS(R), WINGTOTE MANUFACTURING, LLC, LAUREL, MARYLAND 

Mr. BREY. Good morning, Mr. Chairman, members of the Subcommittee. Thanks for having me. I am sorry for your loss, sir. 

My name is Mike Brey. I am the owner of Hobby Works, a hobby 

and toy store with four locations in the D.C. metro area, Maryland, 

and Virginia, with nearly 50 (more than 30 FTE) employees. 

Thanks for allowing me to share my comments with you on the 

health care law’s impact on my business. 

I started my business in 1992. Almost from the beginning, I offered health coverage. Not just to attract and retain good employees, but because as a former retail employee myself, I had found 

it difficult to get good, affordable insurance. My business has been 

successful, and we have been able to expand multiple locations. But 

over the years, it became more and more and more difficult to continue offering health insurance to my employees. 

Prior to the passage of the health care law, our insurance rates 

were going through the roof. We saw annual premium increases, 

10, 15, 20 percent. Sometimes even higher if we crossed an age 

band. As a result, we were forced to ask employees to pay more of 

their premiums and face higher deductibles in order to continue offering coverage. 

Other small businesses also faced these issues before there was 

an Affordable Care Act. The research shows that many small business owners struggled to offer health insurance to their employees 

due to rising costs. Small Business Majority’s scientific opinion 

polling found that the majority of small business owners provided 

insurance to at least some of their employees. But of those who 

didn’t, 70 percent, said it was because they couldn’t afford it. What 

is more, small businesses paid 18 percent more on average for 

health coverage than large companies and received fewer comprehensive benefits. 

Inaction was unacceptable. The passage of the Affordable Care 

Act was the first thing in years that gave me hope that the spiral 

of escalating cost and depreciating quality of coverage might finally 

end. Many provisions of the health care law have been key to making health insurance more accessible and affordable for small businesses like mine. In addition to the marketplaces, a multitude of 

cost containment provisions have gone into effect that are helping 

to lower costs and provide more stability throughout the system. 

A survey conducted by Towers Watson and the National Business Group on Health found that in 2013, employers experienced 

the lowest increase in health care cost in 15 years. While some 

argue that the health care law is requiring many small firms to 

drop their health coverage, the Kaiser Family Foundation found in 

2014 that the number of employers offering coverage remains statistically unchanged from the previous year. Additionally, 8.2 million more people, many of whom were previously uninsured, have 

gained employer-sponsored coverage. 

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Thanks to the health care law’s cost containment provisions, our 

premiums are starting to stabilize. And I believe I am finally starting to have the certainty and stability I need when it comes to 

health insurance premiums and choices of plans. 

What’s more, in Maryland, we now have many more options 

when it comes to insurance carriers and health plans. Where we 

once had only a few carriers to choose from, we can now choose 

from a variety of insurers that offer many health plans. I went on 

the shop exchange and counted. It has more than 110 options for 

my business to choose from now. 

Furthermore, thanks to the new options created by the health 

marketplaces, more people are able to leave jobs to become self-employed or start a business because they don’t have to worry anymore about health insurance. This means that spouses don’t have 

to stay in particular jobs in order to maintain health benefits for 

their dependents. 

Some claim that the health care law is a job killer and that small 

businesses are being forced to make their full-time employees cut 

their hours. This has not impacted my business. We don’t make expansion decisions based on tax laws. We do it based on consumer 

confidence and how we expect sales to increase over time. As a retailer, we are still recovering from the effects of the recession. Nobody actually needs anything I sell. But we have never thought of 

expanding or shrinking based on the health care law’s requirements. 

Some say that the health care law is forcing small businesses to 

order more outside help in order to comply with the law’s requirements. As a small business owner, I can tell you that the vast majority of owners already rely on the expertise of accountants and 

lawyers and insurance brokers. Small Business Majority’s research 

shows that 75 percent of small business owners already work with 

an insurance broker to purchase insurance policies for their business. 

The Affordable Care Act is not perfect, and it won’t solve all of 

our health insurance problems. However, it is the first meaningful 

law in decades that meets many of small businesses’ core needs in 

regards to rising health care costs. In this economy, policies that 

allow us to spend less on premiums so we can keep more of our 

profits to reinvest in our companies and create jobs is what we 

need most. 

Strengthening and tweaking the Affordable Care Act instead of 

chipping away at it is the only path forward to lowering the overall 

cost of health care and providing more options to coverage for small 

business owners like myself and their families and their employees. 

Thank you for the opportunity to comment. I really appreciate it. 

[The statement of Mr. Brey follows:] 

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Chairman ROE. Thank you, Mr. Brey. 

Ms. Roberts, you are recognized for five minutes. 

STATEMENT OF MS. SALLY ROBERTS, HUMAN RESOURCES DIRECTOR, MORRIS COMMUNICATIONS COMPANY, LLC, AUGUSTA, GEORGIA 

Ms. ROBERTS. Chairman Roe, Ranking Member Polis, distinguished members of the Subcommittee, my name is Sally Roberts, 

and I am the director of human resources for Morris Communications. I am here today on behalf of the Society of HR Management. 

I have been a member of SHRM for 18 years. Thank you for the 

opportunity to testify today on how employers are implementing 

the ACA. 

Five years after the implementation of the Affordable Care Act, 

it continues to be a challenge for HR professionals and employers 

due to the complexity, the delay in effective dates of certain provisions, and the coverage requirements. 

Mr. Chairman, although the ACA purports to lower health costs, 

costs continue to rise for both employers and employees. And for 

that reason, many organizations are changing health care benefits 

to minimize the costs. 

By way of introduction, Morris Communications is a private, 

family-owned business based in Georgia since the 1800s. Our core 

business is newspaper publication, but we have expanded to magazines, visitor publications, radio broadcasting, and farming. We 

have over 2,200 employees in 29 states from Alaska, California, 

Texas, Tennessee, and Georgia, just to name a few. 

Morris has long offered benefits to our employees because we believe it is vital to provide a competitive compensation package. 

Throughout implementation, Morris has made changes to our plans 

and benefits, but we have been able to continue our one provider 

PPO plan to all of our employees. 

However, this year, we introduced an ACA-compliant high deductible plan. Let me briefly outline some of the challenges we 

have encountered with the implementation. First, the anticipated 

excise tax. At Morris, we project that our current health plan will 

trigger an excise tax of over $650,000 in 2018. To mitigate this 

cost, we are considering a full replacement of our PPO with a highdeductible plan. However, we have considered this option for over 

ten years, and we have failed to implement it because of the economic hardship we believe it would have for our aging workforce. 

That is why SHRM supports H.R. 879 to repeal the excise tax. 

Some employers are implementing incentive-based wellness programs as cost-containment strategies. However, recent litigation 

proposed by the EEOC has threatened the certainty of the law for 

employers that offer these programs. SHRM applauds the introduction of H.R. 1189 under the leadership of Chairmen Kline, Roe and 

Walberg to protect employer-based wellness programs. 

Another challenge facing my company as well as others is the 

employer reporting requirements. At Morris, after looking at the effort it will take to track, record, and report hours of eligibility, we 

will either have to hire someone to do this for us or outsource at 

an estimated cost of $50,000. 

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Other challenges include obtaining exchange notifications. Exchanges are supposed to notify organizations of employees who 

have applied and who are eligible for subsidies and credits. So far, 

only a few state exchanges have sent notifications to employers, 

and the federal exchange has yet to do so. 

Lastly, SHRM has strong concerns regarding the ACA’s definition of ‘‘full time.’’ The definition is inconsistent with the Fair 

Labor Standards Act and conflicts with many federal and state 

laws. SHRM supports H.R. 30, a House-passed bipartisan proposal 

to amend this definition. 

Mr. Chairman, prior to the ACA, benefits administration occupied about one-third of my time. Since the ACA, I have spent closer 

to two-thirds of my time on benefits administration. In addition to 

staff time, Morris has incurred health care consultant and attorney 

fees; funds that we could have spent on employees in such ways as 

giving increases or contributing to their 401(k)s. 

Mr. Chairman, thank you for allowing me to share my experience 

in implementing the ACA and SHRM’s views. SHRM believes that 

effective health care reform should expand access to affordable 

care, but organizations should not have to change business practices and benefits to afford the required changes. 

Unfortunately, the ACA’s requirements are increasing costs, and 

it has restricted employer flexibility to offer benefits packages that 

best meets our employees’ needs. Thank you. 

[The statement of Ms. Roberts follows:] 

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Chairman ROE. Thank you. And I want to thank this entire 

panel. The members here should take notice that every one of you 

finished under your time. So that is amazing. Thank you. I don’t 

think that has ever happened since I have been here. So we will 

try to be as good as you are. 

Mr. Wilson, you are recognized for five minutes. 

Mr. WILSON of South Carolina. Thank you very much, Dr. Roe. 

Thank you, each of you, for being here. But in particular, I am very 

pleased to see Ms. Roberts here. Morris Communications, their 

headquarters is in Augusta, Georgia. And with Congressman Rick 

Allen, I have the privilege of representing the sister communities 

of North Augusta, Akin, Barnwell. And, of course, the eyes of the 

world, Doctor, were on Augusta this weekend at the Master’s Golf 

Tournament. What a tribute to the community. Jordan Spieth, we 

are looking forward to him being at the Hilton Head Heritage Golf 

Classic this weekend. And so, hey, people get to see the southeast. 

And everybody wants to move into Rick Allen’s district. So this is 

good. 

But hey, thank you for being here. And indeed, Morris Communications also owns a weekly paper in the district I represent, the 

People’s Sentinel. And it really is a very promoting newspaper of 

the Barnwell community. So thank you very much. Additionally, I 

am grateful—I have to point out that as a graduate of Erskine College, Due West South Carolina, we appreciate your success. 

With that in mind, I want to thank you for being here. And if 

you could explain how Morris Communications and other similar 

companies are planning for the Cadillac tax, a 40 percent excise 

tax. How will these changes affect your employees in the coming 

years as the tax becomes effective? 

Ms. ROBERTS. Thank you. That is something that we have given 

much thought to. We haven’t come up with an exact solution yet. 

One thing that we are considering is converting to a high-deductible plan for all employees. This would be a $2 million cost shift 

from the employer to the employees, unfortunately. And as I have 

mentioned in my written statement, we have hesitated to do so because of the negative impact. We know our employees are aging. 

We know they utilize their benefits. And this would mean that they 

would have to meet the upfront costs first, as high as $1,500 in a 

deductible, before the insurance would kick in. 

However, we believe that would allow us to— 

Can you hear me? Okay. 

Mr. WILSON of South Carolina. It was working. Yes. 

Ms. ROBERTS. However, we believe that is the hard decision that 

we have to make; transfer more costs to the employees in order to 

mitigate the cost of the excise tax or continue and stay on our 

course and incur the tax. 

Mr. WILSON of South Carolina. And thank you for being employee-sensitive. And indeed, I have seen personally the gruesome 

consequence of Obamacare, where I have had bag boys at the grocery store tell me they have lost hours. I have had our wonderful 

young ladies behind the counter at the hardware store tell me how 

they now have to have two jobs because they have lost hours. And 

so it is really sad. 

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But actually, I want to thank Dr. Troy. You had an Op-ed which 

reminded the American people that it was Professor Jonathan 

Gruber, an architect of Obamacare, at the University of Pennsylvania—said this quote should always been remembered by the 

American people—‘‘lack of transparency is a huge political advantage. And basically, you know, call it the stupidity of the American 

voter or whatever. But basically, what is really, really critical to 

getting the thing to pass.’’ And so through this stupidity, it has 

really affected real people. And that is why I am so grateful for Dr. 

Roe’s leadership to repeal this. 

But Dr. Troy, how is it that with the taxes not even being calculated yet, how can businesses try to comply? 

Dr. TROY. So the excise tax is going to tick in 2018, as we said. 

And the issue is that employers are looking at what happens in 

2018. They don’t look six months ahead. They look two, three years 

ahead. Especially if you have a union plan where you have a negotiated deal on health care. But even in nonunion plans, they are 

starting to look a few years ahead. 

And I have spoken to one employer who told me that—it is a 

very well-known employer. And they said that they see the amount 

of cost-sharing that they are going to have to do in order to get 

under the excise tax threshold is so significant that they are starting to make the cost-sharing steps now so that it is a transition period so it is a little bit each year between now and 2018. 

And if I could make one request of the committee. To the extent 

that you are going to do something about the excise tax, I would 

urge you to do it in advance and not wait until the end of 2017 because employers are making decisions in advance, as well. 

Mr. WILSON of South Carolina. Well, thank you for that advice. 

And with the leadership of Dr. Phil Roe, we will be working hard 

on this. And Chairman John Kline. 

And in my brief end, we received word today that what small 

businesses have to deal with are now 1,077 pages of regulations, 

1,377 pages of Treasury decisions, 669 pages of notices, 100 pages 

of revenue projections, and 12 pages of revenue rulings. How small 

businesses could probably put up with that is just inconceivable. 

Thank you. I yield. 

Chairman ROE. Thank the gentleman for yielding. 

Mr. Polis, you are recognized for five minutes. 

Mr. POLIS. Well, you know, a lot of what I am hearing from the 

testimony is that you have some suggestions for improving the Affordable Care Act. I mean, Dr. Troy and Ms. Roberts both talked 

about the excise tax. Well, Mr. Courtney is leading the way with 

a—with regard to a bill that would repeal the excise tax. 

And I think if the discussion is how do you modify the way that 

the Affordable Care Act is paid for—and Democrats are happy to 

have that discussion. They are happy to have that discussion. Not 

everybody agreed with the excise tax in the first place. There are 

other elements in the bill, like a medical device tax, that many 

Democrats don’t agree with. 

But as long as these are presented in light of repealing the Affordable Care Act and taking the necessary revenues out of the 

subsidies and out of the tax support for businesses, you are not 

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lems you have identified, if we are serious about solving them, I 

think we can get a real bipartisan discussion going. 

I wanted to briefly say that for Mr. Paal’s testimony, I was a little bit confused. Because it seems like the Affordable Care Act 

doesn’t really impact his business. It seems like—he said he has 28 

actual full-time employees, so he is not subject to the mandate. So 

can’t you, Mr. Paal, just keep doing whatever it was you were 

doing before the Affordable Care Act with regard to your employees? 

Mr. PAAL. It is a great question. Where it really affects us is a 

number of our employees work three days a week or so. So normal 

week for them is 25, 28 hours. That is what they want to work, 

that is what we want them to work. They are in a part time capacity. Because we have some periods of our year—of course, the traditional retail season in the early winter. We also have a great season at Valentine’s Day for the ones that you love. And everybody 

has got a mom they have to send some flowers to on Mother’s Day. 

We have a lot of peak hours during those times. So our employees that end up working 25 or 28 hours on a normal week end up 

working 40 to 45 to 50 hours during those peak weeks. A multitude 

of our employees are now eligible for health care because their average number of hours is maybe 30 or 31 or 32; 46 weeks of the 

year they are operating lower. So that is a concern for us. 

Mr. POLIS. So, you know, and again, people need to get their 

health care somewhere. So either they are getting it from their employer, they are buying it themselves, maybe they have a spouse. 

If they are low enough income, it is Medicaid. 

So without health care, essentially the cost of individuals that 

are uninsured are foisted onto the rest of us. And others are forced 

to absorb them. I think one of the biggest reasons that the Affordable Care Act led to such a large reduction in the rate of increase 

of health care cost is because it reduced the number of uninsured 

and, therefore, reduced those costs that got transferred onto the 

rest of us. 

I too was a florist before I came to Congress. My company, when 

we sold it, had about 250 employees. And we did offer benefits to 

all of our full-time employees, which was the vast majority of them 

had full benefits, as well. But it seems to me that effects on a company that had 28 actual full-time employees would leave you with 

more alternatives in terms of how you cover them without having 

any detrimental effect on the bottom line. 

I would like to go to Mr. Brey. You mentioned that you think 

competition is a good thing and that the Affordable Care Act has 

given small businesses like yours the ability the shop among many 

convenient insurance carriers. In fact, you said your company used 

to only have a couple choices, and now you and your employees 

have 110 options. Doesn’t that sound like this competition can benefit both you and your employees, and that is one of the factors in 

reducing costs? 

Mr. BREY. Oh, absolutely. I mean, there were years when we had 

only two traditional insurers plus Kaiser. So the idea that the marketplace is—you know, that the marketplace is—it has allowed us 

to—and my employees to have access to so many different plans 

and so many different new insurance companies is, frankly, a little 

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45 

bit astonishing to me. It was more than I hoped for when people 

first started talking about this. 

Mr. POLIS. As a former businessman, I agree with your assertion 

that a boss should do whatever they can to ensure that employees 

have health care. Can you talk briefly about the advantages of offering employees health care? Besides the moral obligation, why is 

it good for your bottom line to offer health care? 

Mr. BREY. Well, I am in retail. If people are healthy, they are 

coming into contact with a lot of people. If people are healthier, 

then they are not calling in sick. Put quite simply. 

Mr. POLIS. In addition, I know it helps retain your quality employees and— 

Mr. BREY.—sure. And so many retailers don’t offer good plans. 

I have been very proud for a long, long time to be able to tell my 

employees listen, the insurance we are offering is not some, you 

know, cut-rate plan. It is the very same insurance that the president of the company and his family are on. 

Mr. POLIS. And the lower the turnover rate of employees, the 

lower your training costs are, the more that you can invest in educating and professionally developing employees, as well. 

Happy to yield back the balance of my time. 

Chairman ROE. Thank the gentleman for yielding. 

Dr. Foxx, you are recognized for five minutes. 

Ms. FOXX. Thank you, Mr. Chairman. I thank our witnesses for 

being here today. 

Ms. Roberts, we have talked about how the law imposes reporting requirements on employers regarding the coverage they offer 

and to whom. It is my understanding that many of the requirements relate to information that employers may not have recorded 

and maintained previously, at least not in administering health 

care benefits. 

I would like to ask you to describe for the committee what your 

experiences have been in complying with the health care law’s reporting requirements. If you could, talk about the types of investments in human resources and information technology that you 

have had to make to comply with the requirements. Can you tell 

us about the considerable time and money spent on complying with 

the ACA reporting rules? And will they have produced any beneficial effect on any of your employees? 

Ms. ROBERTS. Yes. Knowing that the reporting requirements 

were going to begin for the 2015 plan year, we started researching 

the requirements of reporting last year at least. The IRS did come 

out with their draft forms in July. And we have anxiously been 

waiting for the guidelines ever since. They were released in February. So since that time, we have been looking into the exact reporting requirements. 

Much of the information we have in our systems, our current systems. However, it is a matter of integrating those systems—time 

systems, payroll systems—and generating information in the format that the IRS is requiring. Some of the information that is required we don’t have on our premises, believe it or not. It is with 

our third-party administrator, such as the former employees who 

are on COBRA. We must supply information, employee names, and 

Social Security numbers, et cetera. 

CEWDOCROOM with DISTILLER

46 

But also, codes that we have not factored in before. For example, 

why they are not on our benefits. So this is going to take some time 

in reprogramming our systems, setting up codes. And it does take 

time for evaluating; pulling the information and evaluating the 

hours worked and making sure we are recognizing those benefitseligible employees properly. 

Ms. FOXX. Thank you. As someone who in my life in education 

had to spend a lot of time on evaluation, I am really very familiar 

about what a problem it is after you have begun a program to try 

to go back and gather information when you have not put into your 

program the kind of codes, as you say, that now the government 

is requiring. And that can be a real, real headache. So thank you 

for describing it, in just bare terms. We appreciate it. 

Mr. Paal, would you like to add anything to what Ms. Roberts 

is saying about tracking the necessary data that you are going to 

need to comply with the IRS requirements? You have got, I think, 

outside groups helping you with what you do. But have you had 

any useful guidance from the Administration? What are you hearing from others in your industry about the compliance effort needed for these reporting requirements? 

Mr. PAAL. What we are hearing on the requirements has been 

changing consistently over the past several years. It is what are we 

to do this time? Well, what is it going to be next year? The most 

recent thing that we were able to do is to track everything. We got 

the raw data. And we figure with that raw data we can put it into 

any kind of a report that someone wants. 

You know, of course, when we are trying the reach out to our tax 

professionals in tax season, they don’t want a call about what kind 

of health care reporting they want at the end of the year. But, you 

know, it is—we rely heavily on our professional advisers. You 

know, our attorneys and our accountants. But again, you know, 

these folks charge by the hour. So the more we use them for that, 

the more it costs us on the bottom line in order to comply. So it 

is a combination of time and cost. 

Ms. FOXX. Thank you very much. 

I yield back, Mr. Chairman. 

Chairman ROE. Thank the lady for yielding. 

I will now yield five minutes to the ranking member of the full 

committee, Mr. Scott. 

Mr. SCOTT. Thank you, Mr. Chairman. 

Mr. Chairman, when we talk about the Affordable Care Act, I 

like to remind people what the situation was when we were actually voting on the Affordable Care Act. People with preexisting conditions could not get insurance. Or if they got insurance, they 

would be paying exorbitant rates; 14,000 at some point during that 

time—14,000 people a day were losing their insurance, millions 

every year. Fewer and fewer employers were providing insurance. 

We were actually paying for the uninsured – $1,000 on the average 

policy went to uncompensated care; when people go to the hospital 

and don’t pay. When someone with insurance goes and pays, they 

got to pay a little extra, about $1,000 extra on each policy. Costs 

were going through the roof. Women were paying more than men. 

Insurance abuses were commonplace. 

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And when those people talk about repealing and replacing, it is 

interesting that there is no plan in sight that actually improves on 

the Affordable Care Act. We are talking today about broken promises. I guess there have been some broken promises. 

We were promised by the opponents of the bill that this would 

be a job-killer. In fact, since the passage of the bill, we have had 

record job growth in the private sector. Consecutive months that 

have been unprecedented. The promise that there would be a shift 

to part-time work was also broken. There is no evidence that there 

is any broad shift to part-time work. The promise of skyrocketing 

premiums was broken. Since 2010, there has been a marked slow 

down of premium growth, as Mr. Brey has indicated. 

The cost of the Affordable Care Act was also broken. It is actually cheaper than we thought. In fact, we have a little chart up 

here. The blue bar is the projected 10-year cost of Medicare and 

Medicaid payment by the Federal government, 10-year cost. After 

the Affordable Care Act, the red bar is the 10-year projected cost 

of Medicare, Medicaid, Children’s Health Insurance Program increases, and tax credits under the Affordable Care Act. And you 

will notice it is actually a little shorter than the bar for the 10-year 

cost for Medicare and Medicaid. 

Now, I guess this is what we call a gruesome consequence or broken promises or out-of-control costs. We actually during this time 

insured 11 million people and are spending less than before. Let’s 

go over that again. Blue, Medicare and Medicaid 10-year cost. Red, 

Medicare and Medicaid, Affordable Care Act tax credits, and children’s health insurance. It’s actually less after 11 million people 

have been insured. 

We forget that the Affordable Care Act is really the Patient Protection and Affordable Care Act. Insurance abuses, they can’t cancel 

your policy when you get sick, they can’t put lifetime limits on your 

coverage, women can’t pay more than men. That is the patient protection part of the Patient Protection and Affordable Care Act. And 

so I think we have to put that—all of that into perspective. And 

we have heard about people cutting back in hours. 

Mr. Brey, could you tell me what you think would happen to your 

workforce if you arbitrarily started cutting people back to 29 hours? 

Mr. BREY. They would get other jobs. 

Mr. SCOTT. And so long as there is a good recession and they are 

stuck, you could probably get away with it for a little while. But 

as soon as they had options— 

Mr. BREY. Oh, absolutely. They are gonna go. And, in fact, the 

interesting thing is the very SHRM study that Ms. Roberts cites, 

on page four of that it says, ‘‘very few organizations plan to reduce 

the total number of employees because of ACA.’’ Only 5 percent of 

their respondents said that was gonna happen. And that is kind of 

where I am. We just don’t make those kind of decisions based on 

this type of act. 

Mr. SCOTT. Thank you, Mr. Chairman. 

I yield back. 

Chairman ROE. Thank the gentleman for yielding. 

Mr. Guthrie, you are recognized for five minutes. 

Mr. GUTHRIE. Thank you, Mr. Chairman. And I will echo others 

and say it is great to have you back. And I think most people 

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around here say you are one of their favorite members in Congress. 

And those of us who got elected when you did got to know Pam. 

And we know why you are great, because you had a great wife. 

And we really, really appreciate her. And you are in our prayers. 

Thanks. 

First, I want to thank everybody for coming here. My background 

is manufacturing. So I had—in the business environment—offered 

health insurance and still offer health insurance. And I was a 

human resources manager in a lot of respects. As a family business, as Mr. Paal said, you do a lot of everything, don’t you? But 

I was also in charge of benefits. So I understand the frustration. 

And I sympathize for how difficult this law can be. 

As we talk about a lot of the pieces of the law, like we talk today 

about the employer mandate, the Cadillac tax, the health insurance 

tax, the benefits mandates, et cetera. But there is one piece of the 

law that I want to bring up that really concerns me. And that is 

the definition of a ‘‘small group employer.’’ In the health care law 

until January 2016, a small employer is defined as one with 1 to 

50 employees. However, on January 1, 2016, that definition will 

change to 1 to 100 employees. Those employers who have 51 to 100 

employees will overnight be subject to many of Obamacare’s benefit 

mandates, community rating rules, the essential health benefits, 

health insurance tax, composite rating rules, and a prohibition on 

group discounts. And that is just the name a few. 

And we have looked at an Oliver Wyman study that estimated 

that this change will increase premiums for these employers by 18 

percent. I think Mr. Brey said that the difference—small businesses typically pay 18 percent more than larger groups. And so it 

is kind of in line with this study that these employers from 51 to 

100 will necessarily increase it by 18 percent just because of the 

rating rules alone. I have serious concerns about what this will 

mean for the ability to provide quality affordable health care for 

their employees. 

And I have introduced a bill, it is H.R. 1624, the Protecting Affordable Coverage for Employees Act, that would stop this provision 

from going into effect and maintain the current definition of a 

small group employer as 1 to 50 employees. And I am proud to say, 

as Mr. Polis talked earlier about opportunities to do things together, I am proud to say this is bipartisan—I have a Democrat cosponsor. It has bicameral support. And we have gotten through the 

bill—that we have gotten for the bill. And I hope this is something 

that we can take action on in this Congress. 

And in the time left, I know that you guys have full-time equivalent, less than 50 employees. I think you were saying—so you were 

in the 1 to 50. This wouldn’t affect you, 51 to 100. But I don’t know 

Dr. Troy, if you have looked at this at this provision before. Do you 

have any comments on that? In not, we— 

Dr. TROY. We look mainly at the impact on large employers. So 

these are a thousand or more. So this change wouldn’t really affect 

what is happening on large employers. And we have not studied 

this provision specifically for that reason. 

Mr. GUTHRIE. Okay. I didn’t know if any of you had any experience with that. Well, I appreciate that. I think it is important. And 

there are things that we need do to fix issues for these people. And 

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look forward to continuing to work for a bipartisan, bicameral basis 

to move this forward. 

And Mr. Chairman, I yield back. 

Chairman ROE. Gentleman yields back. 

Mr. Pocan, you are recognized for five minutes. 

Mr. POCAN. Great. Thank you, Mr. Chairman. 

So let me just raise one point, and then I want to get into what 

I really want the talk about. I think one of the myths—I know 

there are two hearings today going on roughly around the same 

subject. I think one of the myths is about the number of businesses 

affected. And I just want to put, you know, just out there, 96 percent of employers are small businesses that have fewer than 50 

employees, thus are not affected by the employer-shared responsibility provisions. I am one of those. I have had a business for 28 

years. 

And then the overwhelming majority of the remaining 4 percent, 

95 percent of the businesses with 50 or more employees and 98 percent of the businesses with 200 or more employees, already offer 

coverage. So we are talking about a relatively small number. Not 

that any small number is insignificant. But the vast majority of 

employers—let’s face it. We have an employer-based health care 

system in this country. And the vast majority are providing that 

or, in the case of the small employers, are not necessarily required 

to. But this is the system that we have in the country. And that 

is what we really have. 

There is a slide I would like to put up I think that we have regarding the average premium for employer-based family coverage. 

You are not going to see the bottom colors real well, so I will try 

to explain them. And I think from the testimony, I know Mr. Brey 

specifically brought up the cost of health insurance. I know with 

premiums increases I used to have too, double digits for many, 

many years for my employees. 

[The information follows:] 

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CEWDOCROOM with DISTILLER


Insert offset folio 32 here 94087.032
51 

And if you look at that line, that is—the top line shows you 

where the trend was going. But the bottom line, you can’t quite 

tell, but there is a blue line showing where the actual costs have 

been since the passage of the ACA and where they are expected to 

go. And this not only corresponds with your testimony, Mr. Brey, 

but with my experience. I actually had employees’ health insurance 

go down this year. I haven’t seen that since maybe I had hair. And 

it has been a long, long time. So I was really excited to have that 

actually happen. 

But also, I was talking to the administrator of a hospital, Meriter 

Hospital in Madison, Wisconsin, who told me as soon as the Affordable Care Act passed, their costs have really flattened. Now, being 

a business person, lowering the cost of health care means you are 

going to ultimately lower the cost of the premium, which means 

there will be a lower cost to the business. And since many businesses like yourself, Mr. Paal, you are talking about capping how 

much you offer to the employees. That means the employers will 

ultimate will have—the employees will ultimately have more 

money in their pockets because that cost is going to go down. So 

I am looking for the downside on that aspect. I don’t know if I see 

it as an employer. 

Mr. Brey, specifically, can you share your experience, you know, 

talking about those increases prior to 2012 and the increases now? 

Mr. BREY. Well, they were almost always double digits; 9 percent, 11 percent, 13 percent, 15 percent. And in—you know, Maryland already mandated certain small group coverages. So what the 

insurers did is they used the average age of the group. So the intrinsic increases that you are talking about, that doesn’t include 

what happens when you cross an age band. 

So, for example, you are already going to have a 10 or 13 percent 

increase, and then the average age of your group goes over 40, you 

know what happens. And at one point, I actually removed myself 

from our own plan because I was the oldest employee and went on 

my wife’s plan, which was substantively identical, only to lower the 

average age of the group for one more year because the last thing 

I wanted to do again was tell my employees about another change 

in our health coverage. 

Mr. POCAN. I remember one time getting a 12 percent increase, 

and I was really excited about getting that for a year. And that is 

why, like, this year was really different. 

Mr. Paal, in your experience prior to 2012 to now, the increases, 

clearly, you must have also experienced what Mr. Brey and I have 

experienced, much higher increases and now we have got a little 

bit of a flattening event; is that correct? 

Mr. PAAL. Absolutely. We have experienced the same type of increases consistently year over year. 

Unfortunately, what we have seen is a lot of specific examples. 

When they did away in Maryland with the average age-based pricing, they price out each employee individually. Which means, you 

know, prior to ACA, everybody in our company paid the rate of a 

43-year-old. Well, now the 62-year-old pays the rate of a 62-yearold. And that cost is substantially more. 

I took a look at some of the figures in regards to that employee. 

His premium three years ago when we had a shared group, his preCEWDOCROOM with DISTILLER

52 

mium was $242. His premium on our most recent renewal, he declined it because it was too much money, would have been $630. 

Mr. POCAN. Okay. So now looking, you say that the actual employer’s cost to insure a full-time employee range from $107 to 

$322 a month? Is that your current? 

Mr. PAAL. That is—right. That is—what we do, we pay 50 percent. So— 

Mr. POCAN. I gotcha. 

Mr. PAAL. So double that number and that is what the total price 

is for his insurance. 

Mr. POLIS. Gotcha. And if—you said it would increase $2 an hour 

potentially under the ACA-defined small business employer plan. I 

am averaging it out. That is about $346.66 a month. Which would 

be slightly more than the $300 cap you have, but actually would 

be within that realm. 

Because I know we—we provide 100 percent for our employees. 

Because part of it is you are being competitive; right? I mean, I 

know you mention in here you can’t charge more for roses. I looked 

at your Web site. I noticed you don’t compete on price. Because you 

shouldn’t compete on price. That is what we are all told. I foolishly 

named my business Budget Signs, so I have to deal with that a little bit, when I was 23. But I learned. 

But, you know, you have service, you have all the other things 

you compete on. So technically, it is not true it is just based on the 

price of roses. People go to you for a lot of other reasons. But it 

seems like there is some wiggle room in here on the numbers on 

that. 

Mr. PAAL. What I was trying to illustrate there is that, you 

know, and being in business, you understand you have a pot of 

money that you can pay to an employee in compensation. 

Mr. POCAN. Sure. 

Mr. PAAL. You can pay it in salary, you can pay it in salary and 

benefits. But it is still the same amount of money. If I take that 

money and I give it to an employee, I am required to offer them 

the benefits. So a portion of that gets shaved off and I can only pay 

them a little bit less in salary. Whereas, if they go to one of my 

competitors to do the exact same job, that competitor can take the 

same bucket of money, pay them a higher salary, they can go to 

the exchange. They are eligible for a subsidy. 

At the end of the year, they have got $2,300 less working for me 

working the exact same job, exact same hours, exact same employer’s costs in compensation doing the same thing in the same town. 

That just seems silly. 

Mr. POCAN. Yes. My time is up, otherwise I would ask you another question— 

Chairman ROE. Thank the gentleman for yielding. 

Mr. Messer, you are recognized for five minutes. 

Mr. MESSER. Thank you, Mr. Chairman. Again, I would want to 

echo the comments of so many others that have talked about how 

beloved both you and your wife Pam are. And just want you to 

know you continue to be in our prayers. Thank you for being here. 

You know, last Congress with Chairman Roe’s leadership, we 

had a field hearing in my district focusing on the Affordable Health 

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53 

Care Act’s impact on schools, on workplaces. Congress needed to 

hear directly from employers about the true impact of this law. 

I have to tell you, much of the testimony that I have heard today 

reminds me of the economist who saw something working in practice and wondered if it worked in theory. And, you know, the reality is that you can talk about all the theory you want here—millions of employees are being impacted by this law. For many, they 

have lost their health care policy. For many, they have lost their 

doctor. For many, they have seen their prices go away. 

That hearing highlighted that the employer mandate creates a 

catch-22 for both employers and employees. There is a high price 

to pay, whether or not businesses and schools comply with the law. 

For example, witnesses were faced with paying the high cost for 

health care that is spiking, paying a high tax, or cutting employees 

or employee hours. 

That is why I introduced the School Act last year, which would 

exempt schools from this onerous provision, eliminate this odd circumstance where we are taxing schools and local municipalities to 

pay for the President’s health care law. I am going to be reintroducing legislation that would deal with the employer mandate and 

redefine a large employer as an employee with 100 or more employees for the purposes of the individual mandate, instead of the current threshold of 50. 

As Brett Guthrie talked about earlier, there is a difference between the benefit regulatory compliance and where the threshold 

is for the employer health care mandate. 

Mr. Paal, in your testimony you mentioned the unknown cost of 

insuring future employees, and it has made you apprehensive at 

potentially expanding your business. As a business owner who 

would have to comply with this tax, would that change from a 50 

to 100 employee threshold help you in your business in considering 

the next employee you hire? 

Mr. PAAL. Absolutely. You know, a great portion of my expansion 

that I have performed over the past decade has been in acquiring 

existing flower shops. Because they then become part of our company, very few of these other flower shops—in fact, not a single 

flower shop that I have purchased offered health care coverage to 

their existing employees. So when they come onboard with us, the 

full-timers always got health care, because that is what we do. 

I would have to double the size of my company—which I would 

love to do. But it is going take me a little while to do something 

like that before I get up to 100. I have just crossed the 50 threshold 

on the FTE. So having a cap at one hundred, I think that is—that 

is very appropriate. I mean, I run a bunch of Main Street flower 

shops. You know, it is not a large manufacturing corporation. It is 

a bunch of Main Street businesses. 

Mr. MESSER. Yes. And thank you. 

And Dr. Troy, I will ask you for maybe a little bit of insight on 

the Cadillac tax, the health care cost there. I represent a largely 

rural district with manufacturers, other entities. One of the challenges that district has with the Cadillac tax is that because it is 

based on the gross cost of employee—and in the rural areas, there 

is not the kind of competition that drives down cost that there can 

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be in more highly-populated urban areas—this tax could disproportionately impact small towns and rural America. 

Can you comment a little bit on that reality? 

Dr. TROY. Yes. One thing we are finding with the excise tax is 

it is—as conceived, it was a Cadillac tax. It seemed like it would 

hit big corporations with generous health care plans. But it is hitting a lot of places that are unanticipated, including rural districts, 

as you were saying. But the states, localities, a number of union 

members. Unions are against it because it affects their health 

plans. So it is having wider impact than originally anticipated. 

Mr. MESSER. Thank you. 

No further questions, Mr. Chairman. 

Chairman ROE. Thank the gentleman for yielding. 

Ms. Bonamici, you are recognized for five minutes. 

Ms. BONAMICI. Thank you very much, Mr. Chairman. And welcome back, Dr. Roe. 

I want to thank everyone, all the witnesses for testifying before 

the Subcommittee today. It is clear that people have pretty strong 

opinions about the actual health care law. But there does appear 

to be a commitment among everyone that people in this country 

should have access to affordable health care. And I appreciate that 

very much. 

In my home state of Oregon, where implementation was, let’s 

just say, far from perfect, we have been reminding ourselves many 

times that the law was about more than Web sites. It really is 

about access to health care. We have seen a lot of positive effects, 

including the fact that the uninsured rate last year was less than 

12 percent. The year before, it had been closer to 20 percent. 

It is important that we have this conversation about the benefits 

of the Affordable Care Act. And I really hope that my colleagues 

can work together, as Ranking Member Polis was saying, so that 

we can address the concerns; these concerns that have been raised 

about lack of clarity or inconsistencies and even cost without rolling back the benefits for Americans that they have seen from this 

health care law. 

Now, Ranking Member Scott did a great reminder of what things 

were like before the Affordable Care Act. I wasn’t here in Congress 

when it passed. But I used to work as legal aid helping low-income 

families. And there were a lot of families that would come in absolutely desperate with high debt. They wanted to file bankruptcy. 

And typically, that was because they had unexpected medical bills 

from either inadequate or no insurance. 

Now, post-Affordable Care Act, recently I had a conversation 

with a doctor in Oregon. He said he used to volunteer at a free clinic. They don’t need him anymore. Because so many people have 

coverage, they don’t need to go to the free clinic. So I am looking 

at the benefits and hoping that we can, again, work together to address the inconsistencies and get some more clarity. 

And I would also wanted to talk about this, because we are really 

focusing on small businesses. I had a great conversation in the district I represent with a manufacturer. At the end of 2013 I went 

out to visit the business. And I said tell me how things are going 

with the implementation of the Affordable Care Act. And he said 

well, we are close to having 50 employees. We were really conCEWDOCROOM with DISTILLER

55 

cerned because we want to grow so we went and talked to our 

broker, and we found out that even if we grow our employees will 

be getting better coverage and not paying any more. Let’s go see 

the factory. So we have to talk about how this is actually working 

and helping a lot of employees and employers. 

And Mr. Brey, I wanted to ask you. You talked about all of the 

choices you have now as a small business owner. I think you said 

more than 100 choices, which doesn’t sound like a government 

takeover of health care. It sounds like the free market working. 

So can you talk a little bit about the process, compare before and 

after the Affordable Care Act. Just navigating the system, talk 

about whether there is enough support out there, enough information. I actually have someone in my Oregon office who is there to 

help constituents and small businesses if they have questions about 

the ACA. But are you getting enough information out there to get 

through this and, as you said, go through those choices and make 

decisions about your coverage for your employees? 

Mr. BREY. Sure. You can always have more information, I think, 

when it comes to things like this. But even you know when we 

were a much smaller company, you know, we went to an insurance 

broker. So we have always all along, I guess, had kind of advice 

to help us through all of the changes and things that have happened. 

So, you know, I haven’t found it as a small employer particularly 

difficult. That is not to say that there aren’t—you know, it couldn’t 

be better. But we had—you know, there was one point in Maryland 

as I mentioned before, we literally had two insurers offering coverage. and plus Kaiser, which we couldn’t do because we were expanding into an area that wasn’t convenient for my employees. 

So, you know, the idea now that we have insurers offering coverage that I have never even heard of in Maryland I think is exciting. I think it is an example of the law at least starting to work 

the way it is supposed to. 

Ms. BONAMICI. And it is interesting. Because I know both Mr. 

Paal and Ms. Roberts talked about spending more time now to try 

to get coverage for their employees. But are you spending more 

time, less time, about the same time? 

Mr. BREY. You know, I always hated being the HR guy, the benefits person, in my company. So I think there was a period of time 

at the beginning of the Affordable Care Act’s passage, and then 

there was a year there I think as things starting to come in where 

I did probably spend some more time. But it is time I have spent 

now. And I know where we are. And we are on an ACA plan and 

we know what we are doing. 

Ms. BONAMICI. Thank you. And before I yield back, I just want 

to again say, Mr. Chairman, that I hope we can work together to 

make this law work, to make sure that people do have access to 

affordable health care, and that we work out some of the inconsistencies that are making it challenging for some of the businesses 

that testified today and across the country. 

Thank you. And I yield back. 

Chairman ROE. I thank the gentlelady for yielding. 

Mr. Allen, you are recognized for five minutes. 

Mr. ALLEN. Thank you, Mr. Chairman. 

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56 

And being that I have been a member of Congress for just a 

short period of time, but prior to that I actually worked for a living 

in the business community for over 30 years in the state of Georgia. And unlike, I guess, Maryland, which has had a mandated program for some number of years, Georgia has not mandated-employer health plans. 

In fact, it was the business community that started in the health 

care business. Just a little history that I thought might be interesting is that when the government actually capped wages during 

World War II is when the business community began to offer 

health insurance and other benefits to supplement their workforce. 

So that tradition has continued. And it has become a very important benefit for our employees. I know our employees, we had a 

shared program that we thought worked pretty well. And we encouraged our folks to participate in it. 

As early as the Great Depression, the government has wanted to 

get in the health care business. In fact, it was contemplated in the 

Social Security law that the government get involved in health 

care. And, of course, now the government owns health care and has 

mandated that businesses offer health care or either send their 

people to the exchanges. Which, again, creates tremendous uncertainty in the marketplace at a time in our economy—we don’t have 

the Great Recession, but I don’t think growing the economy at 2.5 

percent is going to get this country where it needs to be. 

And I think that this plan is the greatest impediment to economic growth in this country. Everyone knows, and I think everyone will admit, that the thing is flawed. And there are two big 

question marks here. Do you fix a flawed program, or do you start 

all over? And I think that is the debate that we have before us. 

One of the things that is of great concern in my direct is our 

rural hospitals are going out of business and our rural medical 

practices are moving to urban areas because it has wrecked rural 

health care. You know, deductibles—and I think probably one of 

the biggest reasons for that is that if you talked to any hospital 

today, the thing that is driving down cost is the fact that 

deductibles on the standard plan are $1,300 to $2,600 per family. 

And then on the bronze level, they have gone from $5,100 to almost 

$10,500. 

Now, I can tell you because of this economy and the last few 

years, folks are living week to week. And when they have to have 

some type of medical procedure, they simply don’t have the cash or 

the money to pay for it, which is a dangerous health care issue in 

this country. 

And with that, Ms. Roberts, I would like to ask you, obviously, 

you are debating this high-deductible plan versus your current 

plan. Obviously, these deductibles are a big challenge for you. 

What are you all looking at as far as a deductible? And how do you 

think that will affect the health care of your employees? 

Ms. ROBERTS. If we decide to go to a full replacement to a highdeductible plan that is very similar to our ACA high-deductible 

plan, we are looking into helping our employees through wellness 

incentives. We would reward certain behavior with contributions, 

perhaps, to an HSA that would offset these higher deductibles. 

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However, as I mentioned in my written statement, the EEOC is 

looking at wellness plans very carefully and wanting to put a cap 

on that. That would also be a challenge for us because, as you mentioned, with a high deductible, the insurer must meet the first 

$1,500 or higher before any insurance coverage would kick-in. 

Mr. ALLEN. Okay. As far as the overall effect that it has had on 

growing your company, do you think without this law that Morris 

Communications could have expanded its business? 

Ms. ROBERTS. We have had to look very carefully at how we 

spend our money. Revenue is very hard to come by in a mature industry like the newspapers. So every time we look at what we can 

do for our employees, for example, with the excise tax, we see that 

as an impediment to funds that could be better used on our employees. 

Mr. ALLEN. To grow jobs. 

Thank you. And I yield back. 

Chairman ROE. Thank the gentleman for yielding. 

Mr. Courtney, you are recognized for five minutes. 

Mr. COURTNEY. Thank you, Mr. Chairman. And welcome back. 

So, first of all, I just want to make a few observations and join 

my colleague, Mr. Polis. You know, coming from a state that embraced the Affordable Care Act—Governor Malloy, you know, 

moved quickly to set up an exchange. We are now into year two 

of the exchange operations. And again, we have seen dramatic increases in terms of uninsured. We have basically cut it in half; in 

the state of Connecticut, about 500,000 people. We are only a state 

of 3.3 million people. 

The insurance department just did a second round of rate filings 

for 2015. Again, both exchange plans and non-exchange plans. And 

I would like to just sort of offer for the record—because rates went 

down. They didn’t go up in 2015. The savings were in the millions 

to both small employers, individual health care plans, and across 

the board. I mean, Blue Cross, you know, Cigna, United 

Healthcare, and some of the smaller plans. 

We have more insurers in the marketplace; Harvard HealthCare 

from Boston just announced they are again opening up for business 

in the state of Connecticut and another insurer out of Springfield, 

Massachusetts, is also moving in. 

So we have more competition, more choices. And that is why an 

employer in the heart of my district from eastern Connecticut, 

Willimantic Waste, basically saw their rates go down for 2015. Because they actually had more competition out there amongst different insurance providers competing for the business. They have 

about 275 employees. You know, they—it is a trash removal service 

there. And, you know, it is—and they were very nervous about this 

law. I mean, we had a lot of dialogue back in 2010 when this measure was introduced. 

So, Mr. Chairman, I would like to enter the Connecticut State Insurance Department’s chart for rate reductions for 2015 and ask 

that be made part of the record. 

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Chairman ROE. Without objection, so ordered. 

Mr. COURTNEY. And again, I would say listening to the testimony 

and reading it, as Jared said, if we are gonna get off of the political 

theater and really focus on legislating, we can actually I think do 

some good things. Both in this committee and the Congress as a 

whole looking at this law. 

If you go back to 2010, when the excise tax, I would argue was 

cobbled on to the bill at the end of the process, the House passed 

the Affordable Care Act with no excise tax. And I think that is an 

important point for people to remember. It is not some intrinsic, 

you know, pillar of the law. The fact is it was the Senate Finance 

Committee that, frankly, adopted a lot of economic thought, that 

taxing health benefits has been a mistake in America going back 

to World War II. And this was, in my opinion, a pretty mangled 

version of trying to promote that sort of—that philosophy. 

And 192 House members actually signed a letter protesting the 

Senate’s inclusion on this. The bill that they initially proposed 

would have gone into effect in 2013 with much lower tax thresholds 

for the 40 percent excise tax. Because of that push-back, the law 

was delayed five years to 2018. The thresholds were raised, we excluded vision and dental. You know, this was something that was 

a very hotly-contested item. And as we now know, looking at the 

reports that are coming in from actuaries, whether it is Towers 

Watson that is working for Fortune 500 companies, Milliman and 

Associates, who just did a study for the teachers union. We have 

got Mercer. 

I mean, again, all the sort of, you know, blue chip analysts that 

are out there is that, again, this is still a flawed mechanism; that 

the incidence of tax is gonna hit basically regions of the country 

geographically. Because that drives premium costs much more than 

benefits. And so-called Cadillac benefits, as well as gender and age. 

And so that achieves nothing in terms of trying to have a more 

efficient health care system and promote quality and affordability. 

So again, I would just say to the chairman, there are many of us 

who, again, were very concerned about this proposal, you know, 

back in 2010. It was a truce that was agreed to. It was not an 

agreement when that was incorporated, the five-year delay. And it 

was well understood that it would be revisited, again, as we get 

closer to the time. 

And as I think the point was made, now is the time to do it. The 

fiscal note from the Congressional Budget Office is $87 billion over 

10 years. That has actually come down fairly significantly from the 

last couple of years or so. And I am an optimist. And I know we 

have got a great chairman here. I have been on some bills with him 

–on IPAB–and a couple of others. But again, the question is are we 

gonna do this surgically? And—which I think is the appropriate 

way to do this. And if you do that, then, frankly, I think some good 

things can happen. 

So I want to thank all of the witnesses for being here. As a 

former small employer, I lived the life of double-digit increases. 

And we are very excited in Connecticut that the changes that are 

taking place are particularly helping. We had the largest job 

growth in 2014 since the 1990s. So, you know, that ain’t bad, deCEWDOCROOM with DISTILLER

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spite all of the, you know, sort of, you know, predictions of doom 

and gloom. 

So with that, I yield back. 

Chairman ROE. Thank the gentleman for yielding. 

Mr. Walberg, you are recognized for five minutes. 

Mr. WALBERG. Thank you, Mr. Chairman. And welcome back, as 

well. And may I add the fact that I honor you for doing what I as 

a minister for many years standing in front of a couple taking the 

oath to love and cherish until death do them part, you exemplified 

that. I honor you for that. 

Ms. Roberts, thank you for mentioning the wellness issue, as 

well. I think it is a misguided thought, let alone approach, from the 

EEOC that goes directly opposite to what we really ought to be 

doing; to encourage people and to make sure people have equal opportunity in health, as well. 

But you have mentioned the statistics of companies having to 

change their health care benefits packages to comply with the ACA 

mandates, fees, and taxes. One change has been to offer fewer benefits, but increase taxable wages. That has been mentioned several 

times this morning; for employees to pay for their own health care 

costs. 

How has this and other changes been received by employees, that 

you are aware of? 

Ms. ROBERTS. This year, as I mentioned, at Morris was the first 

year that we introduced a high-deductible plan. And that was to 

align and comply with the ACA. It needed much more communication on how this type of insurance plan works. People are accustomed to their copays and then a small deductible and then a coinsurance. However, we have had to explain that while these premiums are much lower than you are used to, beyond your wellness 

benefits, everything else will be out of pocket until you hit that 

high deductible. So that takes a lot of education for these employees. 

Morris was already paying 100 percent of wellness visits prior to 

the ACA. So that part is easy to communicate. But just the difference between a preferred provider organization-type insurance 

plan versus a high deductible, we have had to do a lot of education 

with our employees. 

Mr. WALBERG. Well, I think along with that, the evidence is—I 

have heard my colleagues’ conversation about the benefits of the 

ACA. And there indeed may be—and I would debate it. But there 

may be more people who have health insurance coverage now, but 

they don’t necessarily have health care. And I think that is a challenge. When you get down to the issue of the cost, the deductibles, 

the prescription cost increases. And ultimately, people who have a 

health insurance policy, but can’t afford the health care from that 

point. 

Dr. Troy, beginning last year, individuals and small businesses 

began paying a tax on the health care insurance products they purchased. The tax increased 40 percent this year. And according to 

the United Health Care health insurance filings in Michigan—and 

I could give other stats from other health care providers, as well, 

that would coincide. But United Health care says a family of four 

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in Michigan will pay $537 in increased premiums due to this ACA 

tax. 

Will this increase in small business health insurance tax push 

more businesses past the excise and, slash—and coming from the 

motor capital of the world, I hate the use Cadillac in a pejorative 

way. But we understand what it says. It is a luxury, a fine car. 

This isn’t a fine law. But it will push businesses past the excise 

Cadillac threshold. What is your response to that? 

Dr. TROY. Well, we are finding that the—and I don’t see it as a 

pejorative to say, Cadillac tax. Because it means a praiseworthy 

product, something that is of high value— 

Mr. WALBERG. Okay— 

Dr. TROY. But what we are seeing is that the Cadillac tax, because of the version you mentioned, but others as well, is hitting 

more and more and more employees over time. And that by 2031, 

for example, it is going to hit the value of the average family plan, 

which means that in many ways, the excise tax or Cadillac tax acts 

a little bit like the Alternative Minimum Tax, which was designed 

to hit only a very small number of very wealthy employees in the 

late 1960s, and then eventually grew until it hit many middle class 

employees and taxpayers. 

So similarly, we think that this is going to be hitting more and 

more people over time. Not just people in so-called Cadillac plans, 

but in— 

Mr. WALBERG. Is it a bug or a feature of the law? 

Dr. TROY. You are asking me sir to speak to intent. I can’t say. 

But it seems like it is a feature; that the idea if you accept the 

Gruber comments, is that the idea was to try and get the—to tax 

the higher-valued plans and to make individuals pay more without 

it seeming like the tax would be directed at individuals. 

Mr. WALBERG. Thank you. 

My time is expired. 

Chairman ROE. Thank you, Mr. Walberg. 

Mr. Takano, you are now recognized for five minutes. 

Mr. TAKANO. Thank you, Mr. Chairman. And personally, it is 

great to see you back. And appreciate your being here. And you are 

a great, great colleague on the other side, and we would like to 

work with you on fixing some of the features of the law. 

It has been five years since the Affordable Care Act was passed. 

The last five years have met real progress for my constituents and 

the residents of California. When I took office in 2013, a quarter 

of my constituents were uninsured. Now more than 4 million Californians, who could not get coverage, have health insurance 

through the state marketplace or Medicaid. Nearly a half a million 

Californians got rebates when insurance companies failed to use 

premium dollars to pay for health care, and another 400,000 seniors in the state saved close to $400 million on prescription drug 

costs. That is nearly $1,000 per beneficiary. 

Now, while there are many areas in the law that need improvement, we can’t go back to the days when people could get kicked 

off of their plans as soon as they got sick or find out too late that 

they exceeded their plan’s annual limit when they need it the most. 

I am sympathetic to fixes that help make the law more effective 

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and address things like the excise tax on high-cost plans. But I do 

not believe that repealing the entire ACA is the right path forward. 

And, you know, I thought—I really appreciated the legislative 

history lesson that we got from my colleague from Connecticut. It 

reminds me, I was looking up on my iPhone what the—who originated the quip, ‘‘the Republicans are the opposition, but the Senate 

is the enemy.’’ And that might have been the case here. But in this 

particular case, it sounds like that was what happened; that something got attached in the Senate Finance Committee and the House 

bill never intended to have the excise tax. 

But let me just go on to say that, you know, the ACA has improved coverage for millions of Americans and provided over 11 

million more through the marketplaces. And I want to emphasize 

that when we often talk about the law in the abstract, that there 

are some very real people that have been protected by this law. 

For instance, Bob Kamack, from Alpharetta, Georgia has an incurable brain tumor. After he was diagnosed in April of 2013, he 

feared that he would be kicked off of his wife’s employer-based insurance policy or offered prohibitively expensive premiums. Bob is 

grateful for the ACA’s consumer protections that allow him to have 

quality coverage that won’t jeopardize his family’s finances. 

Bob has said that his type of tumor is, ‘‘one of the best you can 

get,’’ because it is slow growing and responds to treatment and he 

expects to live anywhere from 5 to 20 more years. Bob has said 

that, ‘‘I have seen so many people lose everything because they 

have gotten cancer early in life.’’ ‘‘My biggest fear’’—oh, this is a 

continuation of the quotation—‘‘my biggest fear is that the ACA 

will be overturned and I will leave my family in debt.’’ 

Bob’s wife’s premium is fully covered by her employer-provided insurance. Specialist visits are $60 and his deductible is within a 

few thousand dollars. Bob feared that without the ACA’s consumer 

protections for people with preexisting conditions, his coverage 

would have been denied. 

Ms. Roberts, now, you are just a few—I don’t know how many 

miles. But you are fairly close to where Mr. Kamack lives. Can you 

discuss what might have happened to him and his ability to obtain 

affordable coverage in the absence of these consumer protections 

like the preexisting conditions? And I realize that there is some— 

there is some issues that you are dealing with trying to—with this 

excise tax coming up. But would you at least say that—concede 

that the ACA would have protected people like Mr. Kamack from 

being kicked off their policies? 

Ms. ROBERTS. Even prior to the ACA, Morris Communications 

did not kick people off their plan because of certain conditions or 

discriminate on any type of conditions. Employers like Morris had 

good plans before the mandate, and we continue to have good 

plans. Some of which we absolutely agree with the mandate, very 

parallel coverage. 

So if he were an employee on our plan or his wife was an employee, he would have the same coverage regardless of his illness. 

Mr. TAKANO. So just to clarify. It could have been the case that 

the premiums could have risen to a certain level that might have 

made it prohibitive. Maybe you were a company that would have 

tried to work against that and would have tried to keep people on 

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the plans. But the truth is that many people could be priced out 

of those plans or they could have been, you know, just simply not 

accepted by the insurer. And the ACA protects those folks. 

Now, I understand there is some difficulties with the excise tax, 

which has caused you to take a look at restructuring your health 

plans, which not be so likable by your employees. But nevertheless, 

I think that this case with Mr. Kamack shows us that in Georgia, 

the law has protected people like him from being discriminated 

against by the—or summarily just kicked off of insurer plans. 

Mr. Chairman, I will yield back at this point. And I asked my 

questions. And thank you so much. 

Chairman ROE. I thank the gentleman for yielding. 

Mr. Hinojosa, you are recognized for five minutes. 

Mr. HINOJOSA. Thank you, Chairman Roe. Can you hear me? I 

also want to welcome you back to the committee. And know that 

working with you on this committee and other caucuses that you 

and I serve on, I have learned to appreciate and respect the great 

work that you do here in Congress. 

I ask unanimous consent that a letter from the Small Business 

Majority outlining their support for the Affordable Care Act, which 

explains the law’s benefits to small businesses and workers while 

reducing the job loss and lowering health care costs, be entered 

into the record. 

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Chairman ROE. Without objection, so ordered. 

Mr. HINOJOSA. Thank you. Despite the rhetoric from my friends 

on the Republican side of the aisle, the facts speak for themselves. 

The Affordable Care Act is working. Today, the percentage of uninsured Americans is the lowest in 50 years. And the facts show that 

in 2014, health care spending grew at the slowest rate on record 

and that 129 million Americans with preexisting conditions can no 

longer be denied coverage. Since 2011, as a result of the Affordable 

Care Act, Americans have saved a total of $9 billion on their premiums. 

Last month, the Congressional Budget Office announced that the Affordable Care Act will cost $142 billion less over the next 10 

years than they originally thought. Just yesterday, April 13, a Gallop survey that was released showed that nine out of ten adults 

now say they have health insurance. This morning, another Gallop 

poll was released showing that the uninsured rate has dropped to 

11.9 percent, which is 5.2 percentage points lower than it was at 

the end of 2013. 

So millions more Americans now have affordable, quality health 

insurance. In addition, the uninsured rate among Hispanics has 

dropped by 9.3 percent since the end of 2013. And these numbers 

cannot be denied. 

Now, we hear a lot of rhetoric on how burdensome some believe 

the employer-shared responsibility provisions are. Again, let’s look 

at the facts. Over 96 percent of all small business employers are 

exempt from the shared-responsibility provision. And of the remaining 4 percent of small businesses it applies to, the overwhelming majority of them already provide health insurance for 

their employees. 

So the ACA also makes it easier than ever for employers to provide health insurance for their employees through the newly-created small business exchanges. The ACA is here to stay. It reminds 

me of Social Security, reminds me of Medicare and how when they 

were signed into law there were 30 percent who said it would never 

work, it would never work. And look at how well it works today. 

Instead of continuing their endless obstructionism, I would hope 

that my friends in Congress on the other side of the aisle would 

instead work with us to strengthen the law for future generations. 

My first question goes to Mr. Brey. Would it be fair to say that 

before the ACA, your choice of insurance options for your employees were limited? 

Mr. BREY. Beforehand? They were limited, yes. 

Mr. HINOJOSA. How has that changed since the passage of the 

Affordable Care Act? 

Mr. BREY. We have more companies offering in Maryland for 

small group. And we have many more choices and variety of plans 

to choose from. 

Mr. HINOJOSA. Mr. Brey, we have heard stories of how businesses must now deal with more paperwork, and they are very unhappy about that. So, when obtaining insurance for their employees, what has your experience been as far as a lot of paperwork? 

Mr. BREY. Don’t let me be too Pollyanna about this. Anything I 

can do or anybody can do to reduce paperwork faced by small businesses and large businesses, for that matter, I am in favor of. But 

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my personal experience was that there was a little bit of a learning 

curve in the beginning. But once we were through that, we are 

moving forward. 

Mr. HINOJOSA. Mr. Brey, can you talk a little bit on the coverage 

for employees that you and your family now have? 

Mr. BREY. It is—again, Maryland mandated some small group 

provisions before the Affordable Care Act came in. Meaning that 

for an insurer to offer insurance in Maryland, they had to meet certain criteria. So from my perspective, there has not been a huge 

change. 

Mr. HINOJOSA. My time has expired. 

And I yield back. 

Chairman ROE. I thank the gentleman for yielding. Ms. Wilson, 

you are recognized for five minutes. 

Ms. Wilson of Florida. I would like to offer my condolences to 

Chairman Roe and welcome you back. Looking forward to working 

with you. And I want to thank you for convening this meeting and 

Ranking Member Polis for this hearing. Thank you so much. 

As a lifelong educator, I cannot stress enough how important 

health is in ensuring children have the opportunity to develop, 

learn, and grow. Not only does this include the health of the child, 

but the health of the parents. And this is where the ACA is working. The ACA is working to ensure that parents have access to affordable health insurance. 

And I am proud to say that this year my home state of Florida 

led the nation in the number of enrollees on the federal marketplace, with nearly 1.6 million Floridians finding quality affordable 

health care. And now I am fighting for them to expand Medicaid 

so millions more can be covered. 

Because so many Americans can access health insurance on the 

marketplace, parents are no longer stuck in their jobs for fear of 

losing their health insurance. This means more parents can go 

back to school or train for a career that will allow them to better 

provide for their children. This means more parents can choose to 

work part time and care for their young children. This means parents have the flexibility to make decisions that make their families 

stronger. 

The ACA is also working to ensure that more children have access to health insurance. Although many of the ACA provisions and 

directives are increasing adult care coverage, research shows that 

when parents are covered, children are covered, as well. And more 

parents are getting covered. The ACA is also working to ensure 

that children have access to better health insurance. 

The ACA ensures marketplace insurance plans, as well as employer-sponsored plans, covers preventive dental and vision services for children. This means more parents can take their children 

to get their flu shots this year. This also means that more parents 

can afford to take their children to the eye doctor to get the glasses 

they need to do better in school. And I noticed that many of you 

are using reading glasses. And you can imagine what happens to 

children in schools who cannot see and don’t even realize they cannot see. This means more parents can access the services that 

allow them to raise healthy, happy children. 

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And I am sure all of us want that for our country. So while we 

can talk about ways to improve the ACA, we cannot for the sake 

of our children afford to go back. I continually call the Affordable 

Care Act, Obamacare. In fact, I always say Obama cares about the 

men, women, and children of our nation. 

So this—I have a question for Mr. Brey. As a small business 

owner, you likely have several employees with children who depend 

on their employer-sponsored insurance that you provide. Can you 

speak about your ability to offer your employees better plans now 

that the ACA requires many plans to have additional benefits for 

children, such as preventive, dental, and vision care? 

Mr. BREY. I think it is very important. I come from a pretty big 

family. And, you know, like most of people here, if you operate a 

small business your employees work for you for long periods of time 

and they become like members of your family and so do their children and their pets. So you love to—you love the idea, if you are 

me, that you know that you are offering coverage that is doing real 

good in their lives. My bookkeeper’s husband is self—an individually employed landscaper. So for many years she worked for me 

only to get the health coverage. I mean, I am a heck of a boss. But 

the primary reason I think was her health coverage. So she has 

been able to use it. She has benefited from it. And I am very happy 

to provide that. 

Ms. Wilson of Florida. Okay. Can you see us going back? How 

would that impact your employees? 

Mr. BREY. As I said in my testimony, the situation before the Affordable Care Act, inaction was not acceptable. We just could never 

have endured it. As it was, we were—like everybody here, we were 

tweaking plans and making changes to plans and doing everything 

we could to continue to insure people but be able to afford it as a 

business. I can’t imagine going back. 

Ms. Wilson of Florida. Thank you. 

Chairman ROE. Thank you for yielding. 

Mr. Grothman you are recognized for five minutes. 

Mr. GROTHMAN. Thank you much. We will talk to Dr. Troy. 

Thanks for being here today. You are very educational. 

You studied the impact of the health care law. And there are a 

lot of reasons why the cost of health care is up; the aging population, new technologies and whatnot. But I would like to get just 

a general how are employers dealing with the costs and what alternatives are employers experimenting with to deal with the costs? 

Dr. TROY. Thank you, Congressman, for the question. We work 

primarily and study primarily large employers. And large employers are looking at significant alterations to their health care offerings. In response to the excise tax, they are reducing the value of 

their health care offerings so as to maintain—or remain under the 

thresholds so that they don’t trigger the excise tax when it comes 

online in 2018. 

In terms of the overall cost to large employers, we found that the ACA has an impact of—marginal costs of about $5,000 per employee over a 10-year period. And that is leading them to rethink 

what they are doing with health care, as well. 

So some of the—they are looking at a variety of alternatives. 

One, there has been some movement towards private exchanges. 

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Although I think that has slowed down a little bit at this point. 

And I get the sense from employers that, first of all, they feel that 

there is a uncertainty out there in large part because of ACA 

delays and questions in the Supreme Court. So they are not sure 

what is going to happen. 

So I get the sense that employers are looking for something new. 

They are looking for some kind of future state but they have not 

yet decided on what that is going to be. 

Mr. GROTHMAN. Okay. Now, correct me if I am wrong. When we 

look at the cost to the employer, we look only at his premiums, not 

at the cost to the employer; right? So we don’t—in encouraging one 

type of plan or another, the way this Affordable Care Act was designed, it was only looking at it from the perspective of the employer, not the employee, right, as far as cost? 

Dr. TROY. Yes. And so we looked—that is why we did this study 

about the marginal costs of the ACA to large employers. These are 

costs over and above the traditional costs of health care that are 

imposed by the new law. 

Mr. GROTHMAN. Right. So correct me if I am wrong. Under this 

plan, we are encouraging employers to put in things like big 

deductibles, which just may hammer their employees, particularly 

lower-paid employees. You know, a lot of the times these people 

who set up these plans are very, you know, wealthy in their own 

right. But, you know, you encourage, like, $5,000 deductible, that 

sort of thing. 

Dr. TROY. Yes. We are definitely seeing employers move towards 

these high-deductible plans or towards more cost-sharing, which 

does impose additional costs on the employees. And it raises questions of affordability of employer-sponsored care, as well. 

Mr. GROTHMAN. Great. I am not familiar with all around the 

country. I know in my area what is going to happen is you have 

bigger deductibles, you are going to wind up having employees dig 

into their 401(k)s and that sort of thing. Is that something you are 

going to see around the country, do you think? 

Dr. TROY. Well, what we are finding is that there are already 

about 13–14 million people in employer-sponsored care who, if you 

look at the combination of deductibles and premiums, they are over 

the ACA’s threshold of what is deemed to be affordability, which 

is 9.5 percent of income. 

Mr. GROTHMAN. Okay. I give you one more question, a chance to 

respond. Earlier today we saw a couple of charts that were presented. You know, you have seen these things. And you haven’t 

had a chance to respond them. And I thought while I had my five 

minutes, if I have any of my five minutes left, I would give you a 

chance to respond. 

Dr. TROY. Well, I appreciate that opportunity. There is a chart 

from Kaiser that shows that the increase in premiums has decreased over time. And it compares the 2001 to 2010 period and the 

2011 to 2015 period. There are a couple of things. 

First of all, the costs are still rising for employers faster than the 

cost of goods and services, faster than productivity, and faster than 

GDP growth. So the costs are still rising faster. 

Second of all, CBO did an analysis that suggested that some of 

the abatement in cost increases in the past few years—and rememCEWDOCROOM with DISTILLER

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ber, the costs are still growing faster than inflation. But some of 

the abatement is due—a large part of it is due to the recession, and 

it could not all be attributed, or even mostly attributed, to the 

ACA. 

Chairman ROE. I now yield myself five minutes. 

Let me just clear a few things up about what is going on in the 

real world. And I could not agree more that we should have done 

this bill on a bipartisan basis. I was willing to do that. And the two 

major bills that I have worked on here that have been done on a 

bipartisan basis that got huge votes were one, the Veteran’s Affairs 

bill, and two the SGR replacement we just passed. 

And that is one of the reasons you are seeing pushback, is that 

good ideas were left out of this. There are things in here, there is 

no question. You have all brought up things that needed to be addressed in health care in this country. It is one of the reasons I ran 

for Congress. 

And let me just bring you down to reality, what is happening out 

in the hospitals and the providers. I looked at it as an employer, 

which provided health insurance, just like all of you all have, and 

also as a provider. And what Mr. Grothman said is absolutely what 

is going on. 

In our local hospital system, which is over a billion dollar-a-year 

system, 70 percent of the payers they have are Medicaid or Medicare. That is only 30 percent from the private sector. And now, 60 

percent of the uncollectible debt in our hospital system are people 

with insurance. And the reason is because if you put a $3,000 or 

$4,000 or $5,000 deductible for someone who makes $26,000 or 

$32,000 a year, it might as well be $100,000. They don’t have the 

money. And that is happening today. 

And it is just because you have a health insurance plan doesn’t 

mean you can get health care coverage. Now, because people are 

coming to doctors and saying to the doctors ask saying to the hospitals you just absorb this loss. And who is the winner here? I 

think the winner is the insurance companies. I think they turn out 

great. 

And I was the mayor of a local city before I came here; 65,000 

people. This reinsurance fee that nobody has even talked about, if 

you are a self-insured plan, cost our city, our taxpayers $180,000 

of what we got absolutely zero for. Nothing, except maybe a higher 

tax bill for senior citizens on a fixed income with property taxes. 

We don’t have an income tax in Tennessee. And this has cost hundreds of millions, if not billions of dollars, to self-insured plans. 

Let me tell you what we to do need to do in this, I think. I think 

we need to get rid of the mandates. We need to get rid of the ten 

essential health benefits. You all are business people can decide 

what plan you can afford and pay for. 

And I think, Mr. Brey, you would love the plan I wrote. I really 

think you would like it a lot for the Republican study committee. 

And you are going see it again in about two weeks if there is a replacement bill. And we are going to have a huge Supreme Court 

decision made in about the next 60 days, King v. Burwell, that will 

have a huge affect on this and a lot of citizens. 

Let me also say that I did a poor job as a Congressman of explaining preexisting conditions to people. If you have an ERISA 

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plan right now, it doesn’t affect you, you cannot be denied. If you 

have Medicaid, you cannot be denied. If you have Medicare, you 

cannot be denied. 

Truthfully—and this is where we needed to work on it—in the 

small group and individual market, you could be. And those folk 

were—and Mr. Brey pointed out—paid 18 percent more for no reason whatsoever than they couldn’t group up and get bigger. I have 

been through the very same thing you have in paying my bills. 

What I want to know, Mr. Paal, or Ms. Roberts, you can answer 

this, or any of you. I still haven’t been able to figure out in a smaller business that uses a lot of temporary employees how you figure 

out who you are going to have to provide coverage for, and then 

who gets the coverage. An FTE is not a person. That is not a 

human being with a policy. So how—what do you do with that? 

How do you calculate? Maybe Mr. Paal, you should answer that. 

Mr. PAAL. Well, in the past it was very simple. If you worked for 

us year round, then you were a full-timer, then you got the benefits. And this is part of where the—the 40 hours’ worth of time that 

I spent calculating these things. I have people that work for me 

that will work 3 days a week for 2 months, then they will work full 

time for a month and a half, and then they won’t work for 3 

months because they want to take time off in the summer when 

they are kids are off of school. 

What do I calculate that person as? Well, technically they are 

full time for a good portion they are there. I should offer them the 

coverage. In the past we always had offered them the coverage. 

I actually have two employees under our most recent renewal 

that did not qualify for health care coverage because of the—one 

of them was only 8 hours shy of hitting to be a full-time employee 

out of an entire years’ worth of service. So three more minutes a 

day or one more day of work over the entire year, they would have 

health care. Instead, their health care is terminating May 31st. 

That is where we really get into a pickle. 

Chairman ROE. So trying to figure out who those folks are is virtually impossible? To figure out who gets the policy. 

Mr. PAAL. If I could forecast exactly what my sales were going 

to be, whether it was going to rain or shine or how many weddings 

we were going to have next fall, I could forecast it pretty well. But 

unfortunately, we can’t. 

Chairman ROE. Trust me, I understand that. 

Well, I thank the—I want to thank the Subcommittee. You all 

have done a tremendous job. And I thank you for staying within 

the time. We have been fairly good at that on our end. I would like 

to thank you all for doing it. It has been great hearing. And once 

again, it is an important issue. 

And I would now to yield to Mr. Polis if he has any closing remarks. 

Mr. POLIS. Thank you so much, Mr. Chairman. And I will be 

brief. 

With the lowest rate of increase in decades, with more health 

care choices for small businesses, with millions more Americans 

being covered by the Affordable Care Act, I think we know that it 

is working. And of course, we can do better, as well. Nobody is saying the Affordable Care Act is perfect. There are a number of sugCEWDOCROOM with DISTILLER

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gestions that were submitted today, which I think both sides can 

work on, as well. And like any major piece of legislation, of course, 

I and many of my fellow Democrats are happy to work with my colleagues on both sides of the aisle to improve the Affordable Care 

Act, building on the progress that is already made to help American small businesses succeed. 

What we can’t do is dismantle the reforms that have helped millions of Americans afford health care, helped tens of thousands of 

small businesses afford to cover their employees. From my meetings with small businesses from constituents regarding the Affordable Care Act, I have heard so many stories about how the coverage they have gotten has helped avoid illness, stay out of the hospital, how businesses have grown and prospered in my district. 

Quality preventive care helps ensure that people get healthier 

and happier, keeps them out of the hospital, allows them to continue to get a paycheck, be productive for their employers. Without 

a good doubt, it is a good thing for the economy. 

I implore members on both sides of the aisle to work together to 

improve the delivery of health care in this country. Work with us 

to improve the Affordable Care Act and strengthen the start we 

have made to shrink growing costs for employers, taxpayers, and 

families. 

We need to stop this sky-is-falling narrative. Since the Affordable 

Care Act was enacted, 12 million private sector jobs have been created. Let me repeat. Since the Affordable Care Act was implemented, 12 million private sector jobs have been created. That is 

indisputable. We need to stop the sky is falling narrative. We need 

to start narrative of how we can continue the road to help make 

our economy and the lives of Americans stronger and healthier. 

I yield back the balance of my time. 

Chairman ROE. I thank the gentleman for yielding. I again want 

to thank the Subcommittee for being here. 

And just in summary, I ran for Congress in 2008 to work on— 

one of the reasons was to work on health care. Having spent over 

three decades in the private sector, both in practice and medicine 

teaching in medical school, I realized we needed health care reform. Came to Washington, D.C. We got health care reform really 

by one party. 

And as was pointed out, this was not the House version of the 

bill. And in my opinion, the House version was the Affordable Care 

Act was a much better bill than what the Senate passed and was 

finally—through reconciliation, was passed on a one-party rule. 

And that is why you still have a majority of the people in this country who are opposed to this. 

And let me sort of—the thing that we did do with this, we took 

a small percent of the population, less than 20 percent. And that 

is what we were needing to deal with. And literally, we could have 

done three-fourths of what we did with the Affordable Care Act in 

two paragraphs. One was expand coverage to 26-year-olds and expand Medicaid. That is where the biggest expansion has been. 

Many of the people, including myself and every member of Congress who gets their health insurance through the D.C. exchange 

had health insurance before, perfectly good health insurance, but 

we lost it and we had to buy through the exchange. Which for me 

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is up 75 percent. And many people had—and I can pay that. It is 

not a problem for me. For other people, they can’t pay that. 

So I think we are in a situation where we do need to reform it. 

The Supreme Court is going to make a huge decision in the next 

60 days that will affect the law tremendously. I think we have seen 

increased costs in businesses. I know I have seen school systems 

in my own district that have reduced hours because they have 

fixed—municipalities have fixed budgets, and they only have so 

many dollars that are allocated each year by the local commissions 

to spend on health care and salaries and so forth. And they have 

had to make those decisions. So it is happening out there in the 

real world. People are making decisions now two and three and 

four years downstream. 

I have heard today from my colleagues on the other side of the 

aisle about the Cadillac tax. It needs to go. And I think you will 

get bipartisan support for that. I heard that, I think, almost universally here; that there was no support for that; that businesses 

were having a difficult time dealing with it. And it has been pointed out that unions, those contracts are being negotiated now for— 

for two, three, four years downstream. So we need to do something. 

Not wait until 2017, but do it now. 

I think the other thing is to not redefine the workweek in this 

country. That was a great distortion for American business, to define the workweek at 30 hours. It was unnecessary. And as all of 

you pointed out, if it is affordable, people do—business owners 

want to do the right thing. I certainly want to provide good health 

insurance coverage so people could get the care that I got for my 

family for their families. I didn’t hear a single person, Republican 

or Democrat, out there dispute that. So I think that is a narrative 

we all agree on. 

Again, I want to thank you all. There is a lot of work to be done. 

And it may be a lot of work to be done in the next 60 days. But 

thank you for your time, your indulgence. And this meeting is adjourned. 

[Additional submission by Dr. Roe follows:] 

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[Whereupon, at 12:06 p.m., the Subcommittee was adjourned.] 

Æ 

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