The Honorable Harry Reid The Honorable Nancy PelosiSenate Majority Leader Speaker of the HouseS-221, United States Capitol H-232, United States CapitolWashington, DC 20510 Washington, DC 20515The Honorable Mitch McConnell The Honorable John BoehnerSenate Minority Leader House Minority LeaderS-231, United States Capitol H-204, United States CapitolWashington, DC 20510 Washington, DC 20515

Re: White House Health Summit

Dear Majority Leader Reid, Speaker Pelosi, Minority Leader McConnell and Minority Leader Boehner;

On behalf of the Self-Insurance Institute of America (SIIA) and the 75 million Americans who currently receive health benefits through self-insured plans, I would like to provide some insight prior to Thursday's health care summit. As you may know, SIIA is a national trade association that represents employers that self-insure health benefits, as well as, service providers that structure self-insured benefit plans. Self-Insurance is the purest form of healthcare coverage.There is no profit motive -- meaning every single dollar that a plan saves goes directly to lowering premiums and/or increasing benefits for its employees. There are also direct incentives for plan administers -i.e. employers- to lower costs, improve medical outcomes, and maintain a healthy workforce. It is for these reasons that we are uniquely qualified to offer substantive advice on how best to fundamentally restructure and improve the health care system.The executive members of SIIA are pleased with the bi-partisan nature of this healthcare summit and we hope that a compromise can be reached that benefits all stakeholders involved in the health care debate. Below are some observations and recommendations that will assist you.Overview:Employer-Based Healthcare System -- The current employer-based healthcare system (EBHS) provides a strong foundation to build upon. Roughly 160 million Americans obtain health coverage through their employer, with roughly 75 million covered by self-insured plans. In recent polls, the vast majority of Americans who receive coverage through their employer have indicated that they would prefer to keep that coverage as is. The EBHS provides coverage that is typically less expensive and more generous than that offered outside the EBHS and employers can tailor plans that are best-suited to the needs of their employees. Employer-based health care is also responsible for most of the advances in preventative health and wellness. The members of SIIA urge you to simply address the areas of healthcare that are not working, such as the high cost of care, instead of fundamentally restructuring the whole health care system.Preservation of ERISA - The main factor contributing to the success of employment-based health plans is the broad preemption provision of ERISA. Employers are more likely to offer health benefits that are subject to uniform regulation rather than a hodgepodge of conflicting and inconsistent State and local laws. The erosion of ERISA will lead to a patchwork of State regulations that would undoubtedly lead to severe administrative difficulties and unnecessary expenses for employers as they attempt to comply with various mandates that differ from State to State. We urge Congress to preserve the current preemption provision of ERISA.

Provisions of Current Congressional Proposals NOT in the Best Interests of American Workers:While the following provisions that have been included in the various proposals are well intended, the members of SIIA believe they may cause indirect harm to the employer-system that provides benefits to 160 million workers and families.• "Free Choice Vouchers" -- This provision would allow employees to leave an employer's plan to enter to the exchange and force the employer to pay through a voucher for them to do so. The provision also allows for an employee to keep any leftover amount of the voucher not spent on the premiums of an exchange plan. The population most likely to take advantage of the rebate will be the younger and healthier workers as they would be able to purchase the low-cost catastrophic plan. The exiting from the employer plan by this population will increase the risk of the pool, as well as decrease its economies of scale to negotiate with providers -- all of which will lead to higher costs for those remaining in the plan.

• Applying Insurance Market Reforms on Self-Insured Plans -- While commercial insurance plans have incentives to limit consumer protections in the name of profits, self-insured plans, acting as non-profit entities, have no such incentive. As self-insured plans are used by an employer to attract workers, they are already, and will remain, generous in both benefits and protections.

• Tax Subsidies Only Allowable for Exchange Use -- Preventing low-income workers from using tax subsidies to purchase coverage sponsored outside the exchange harms the worker who might get better coverage through the employer's plan and places an undue burden on the government.

• Assessing Fees on Self-Insured Plans -- By law, self-insured plans are required to serve as non-profit entities; remaining premiums dollars may only be used for expansion of benefits and/or increased cost-sharing by the plan. Fees on self-insured plans will only increase premiums and/or decrease benefits.SIIA's Recommendations:As SIIA consists of members from all aspects of the healthcare delivery system and who see firsthand what is and isn't working, we believe we are in a position to provide helpful insight. The following are recommendations for reaching the goals of healthcare reform; lower the cost, improving quality and efficiency and expanding access to coverage, without causing indirect harm to the parts of the system that are working.• Exchange Limited to Uninsured -- Any enacted insurance exchange should serve as a "safety net"; providing coverage only to those without any access to it. Centralizing healthcare to government exchanges weakens the system that provides coverage to a vast majority of Americans and one that has been the foundation of innovation.

• Small Business Pooling Arrangements -- Most of the current uninsured population work for small businesses unable to afford healthcare coverage for their workers. Small businesses should be allowed to pool together to increase their economies of scale. Allowing these pools to self-insure would provide greater cost-efficiency and the flexibility for greater coverage benefits.

• Access to Claims Data -- Self-insured plans are able to target covered benefits as well as wellness programs based on their ownership of their plan's claims data and the medical trends it reveals. In contrast, employers who commercially insure their plans have no access to this data as for-profit commercial insurers have little incentive to keep costs down. Access to claims data for employers with commercial coverage would allow them to more effectively decide what type of coverage would be most cost-efficient and beneficial to their employees.