Sunflower State News

U.S. Senator Roger Marshall (R-Kansas) questioned several experts during a recent Health, Education, Labor, and Pensions (HELP) committee hearing about access to benefits for independent workers. The panel included Patrice Onwuka, Director at the Center for Economic Opportunity at the Independent Women’s Forum; Kev Coleman, Research Fellow at the Paragon Health Institute; and Karen Friedman, Executive Director at the Pension Rights Center.

Marshall began by asking Onwuka about protections in place if a portable benefit provider were to fail or misuse funds. Onwuka responded: “Under a portable benefits plan, I think that there are protections in place to ensure that, you know, whatever investments have been made, whatever has been paid into it, that that would still be there and protected. There’s some great companies that have those accounts and set those up to ensure that, and they’re regulated to ensure that that happens.” When asked if many providers had failed in this way before, Onwuka said: “I have not seen anything any of them fail, sir.”

The discussion then shifted to association health care plans. Marshall expressed support for these plans but noted limited adoption despite successes in Kansas. He asked Coleman what barriers prevent wider use of such plans. Coleman explained: “A primary obstacle to association health plans, underneath legacy regulation, deals with the obstacles to be able to form a coalition of our association of businesses whose aggregate employee body can be seen as a single health plan. There’s something known as ‘lookthrough doctrine,’ which says, if you don’t have the right affiliations among businesses, we’re going to treat each individual business within an association as its own entity with respect to health insurance. And hence, if they have three people, they’re in the small group health insurance.”

Marshall then asked whether changing laws or regulations would help address these issues. Coleman replied: “Ultimately, changing the law is best... If it’s a regulatory solution, there’s more hesitation because there’s the fear that the next administration may change regulation.”

The senator also raised questions about ensuring parity between portable benefits for independent contractors and traditional benefits offered to W2 employees. Friedman described portability as an ongoing challenge in retirement planning but pointed out proposals aimed at addressing it: “…I mean look portability has been an intractable problem in the retirement space… We need to be exploring those options and make sure that they’re options that both protect employees and also are being workable.”

Marshall followed up with Onwuka on how employers could provide comparable benefits under portable models: “Well,” she said,“that can be negotiated between the independent contractor and their client…they can define how much the employer is willing to pay this independent contractor on top of their negotiated rate...these plans can be paid into by multiple different clients and different entities so an independent contractor can really do well in terms of being negotiating the kind of...benefits package that works for them.” When pressed on specifics regarding contribution rates from multiple clients or employers per contract basis she added:“It would be up to that independent contractor to decide,sir.”

Association health plans allow small businesses or self-employed individuals working together through associations or organizations—such as chambers of commerce—to band together when purchasing insurance coverage instead of buying individually; this approach has been discussed nationally as one way to increase access for groups like sole proprietors.