September 8, 2021
Ways and Means Committee unveils portion of reconciliation plans
Includes paid leave, health, trade and retirement provisions; other tax items to follow
On September 7, House Ways and Means Committee Chairman Richard Neal (D-MA) announced that the Committee will begin considering legislative proposals under budget reconciliation instructions later this week and released the first batch of draft legislative text for the Democrats' proposed Build Back Better Act. Included in this week's markup, which will begin Thursday and Friday (Sept. 9-10), are investments aimed at providing universal paid family and medical leave; expanding access to dental, vision, and hearing benefits in Medicare; enhancing access to child care; strengthening retirement benefits; and modernizing trade programs, among other items.
"Later this week, the Ways and Means Committee will put an end to the idea that only some workers are worthy of 'perks' like paid leave, childcare, and assistance in saving for retirement, and finally commit to investments that make these supports fixtures of the American workplace. We will also examine how we can commit resources to modernize a key trade program that supports American workers facing hardship due to international competition, and how to fund better protections for our nation's elderly," Chairman Neal said in a press release announcing the markup. "This is our historic opportunity to support working families and ensure our economy is stronger, more inclusive, and more resilient for generations to come."
The Ways and Means Committee has not released the tax provisions that are to be part of the Build Back Better Act, including any tax credits or tax increases that are expected to provide a significant amount of funding. Discussions are said to be ongoing and press reports suggested the tax piece wouldn't be released before Friday, though there have been other signals that they won't be released until early next week, ahead of consideration of the tax provisions which is expected to continue through September 14-15.
Full text of the proposals can be found here and a section-by-section summary is attached. A high-level overview is included below:
Universal Paid Family and Medical Leave
- Beginning July 2023, provides up to 12 weeks of annual federal benefits to replace lost wages due to time off for medical or caregiving for a sick family member. The program covers all workers including full-time and part-time, gig workers and other self-employed workers, public and private sectors, and without regard to employer size or tenure. Workers are covered through a qualifying "legacy state" or comprehensive employer-sponsored program for which the state or employer is reimbursed by the federal government.
- Includes activities included under the Family and Medical Leave Act (FMLA) and expands the types of family relationships which allow individuals to seek caregiving leave. Bereavement is also a qualified caregiving activity but is limited to three workdays.
- Eligible employees can apply for benefits if they have or are anticipating having at least four caregiving hours in a week, awarded on a sliding scale based on worker's annual income. The proposal sets a floor of $315 for weekly leave benefits in the program's initial months. Additional benefits would replace up to 85% of lost wages for the lowest-earning workers (earning $15,080 or less), decreasing to 5% for workers earning more than $250,000. Amounts would be adjusted each year based on the national average wage index.
- Provides for grants to legacy states equal to the amount of benefits that would have been paid in a given year and grants to eligible employers equaling 90% of the projected national average cost per employee. Employer-sponsored plans must be as good as or better than the public plan.
- For employers with fewer than 50 employees, provides for small-business assistance grants equal to 2.5 times the average weekly wage if the employer agrees to employment protections and other attestations.
Medicare Dental, Hearing and Vision Coverage
- Expands Medicare coverage to include dental benefits, staring in 2028.
- Includes up to two preventative and screening exams and up to two dental cleanings in a 12-month period. Payment amount is 80% of the lesser of the actual charge; amount determined within statute; amount determined by the Secretary; or amount determined under a fee schedule, with 20% beneficiary cost-sharing.
- Includes coverage of basic treatments, as specified by the Secretary. Payment covered at 80%, with 20% beneficiary cost-sharing.
- Includes coverage of major treatments, as specified by the Secretary. For 2028, coverage is at 10%; for 2029—2032, coverage increases 10 percentage points each year; for 2032 and subsequent years, payment is at 50%. Beneficiary cost-sharing is phased in over time.
- Allows for coverage of dentures every five years as durable medical equipment.
- Expands Medicare coverage to include vision services starting in October 2022. Includes routine eye examinations and contact lens fitting services once every two years as well as one pair of conventional eyeglasses or contact lenses every two years up to $85, adjusted annually based on the consumer price index.
- Expands Medicare coverage to include hearing services, starting October 2023. Includes coverage of hearing aids as prosthetic devices for individuals with profound or severe hearing loss once during a five-year period.
- Requires employers without employer-sponsored retirement plans to automatically enroll their employees in IRAs or 401(k)-type plans and imposes an excise tax on an employer for failing to maintain or facilitate an automatic contribution plan or arrangement.
- Establishes a new type of 401(k) plan, a "deferral-only arrangement" — a cash or deferred arrangement that meets certain requirements relating to (1) automatic enrollment, (2) elective contributions, and (3) employee notices — that is treated as satisfying the actual deferral percentage test comparing the ratio of highly vs. non-highly compensated employees.
- Increases the credit limitation for small employer pension plan startup costs and modifies the credit for certain small employer automatic retirement arrangements.
- Beginning in FY 2026, makes the Saver's Credit refundable so that those without any income tax liability are eligible to receive the benefit in the form of a contribution to their retirement account.
- Reauthorizes the Health Profession Opportunity Grant (HPOG) program, aimed at training TANF or other low-income individuals for occupations in the health care field, providing $425 million per year from 2022 through 2026.
- Each grant cycle, the Secretary will award grants to at least two eligible entities in each state or territory and at 10 eligible entities for Indian populations. Grants for five-year demonstrations projects focused on individuals with arrest or conviction records or pregnancy and childbirth career pathways would also be allotted.
Skilled Nursing Facilities (SNFs) and Elder Justice
- Allocates $400 million per year for each fiscal year 2022 through 2025 to states and tribal organizations (based on a grant formula) to help recruit and retain long-term care workers by giving them wage subsidies, helping with student loan repayments or tuition assistance, and/or offering them child care access, paid leave and transportation.
- Reauthorizes funding for elder justice programs that increase support for state and local Adult Protective Services (APS) offices, appropriating $400 million for each FY 2023—2025 and another $75 million per year for APS demonstration grants.
- Reauthorizes long-term care ombudsman programs aimed at preventing elder abuse, neglect and exploitation, appropriating $22.5 million for each of FYs 2024 and 2025.
- Appropriates $325 million for FYs 2021—2031 to the Secretary for improving the accuracy and reliability of the data collected in skilled nursing facilities to increase transparency of care quality and reimbursement, including for additional audits of cost reports and survey improvements. For FY 2025—2031, facilities could be penalized 2 percentage points for inaccurate reporting of data or information.
- Instructs a report on appropriateness of establishing minimum staff to resident ratios in SNFs no later than three years after enactment and not less than every five years, and the promulgation of regulations no later than two years after the first report.
- The Trade Adjustment Assistance Modernization Act of 2021 (TAA 21) extends and modifies the currently expired trade adjustment assistance (TAA) program. TAA is a long-standing benefits program that seeks to provide economic assistance and worker retraining for domestic workers negatively impacted by international trade.
- TAA 21 would expand the definition of qualifying workers under the program to include staffed workers, teleworkers and public sector workers, as well as generally increasing and broadening the scope of provided benefits.
- Establishes state Child Care Information Networks (CCINs) aimed at ensuring parents and caregivers have up-to-date information on available child care options and help in application. Appropriates $200 million per year in FY 2022 and FY 2023 for states and territories to build or upgrade CCINs or existing systems.
- Provides infrastructure grants aimed at improving child care safety, in alignment with health and safety standards and public health guidelines, including funding for child care facility construction and major remodeling. Appropriates $15 billion for FY 2022, to remain available through FY 2026.
- Establishes a new Child Care Wage Grant program for small businesses.
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|Washington Council Ernst & Young
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