All posts by Rep. George Miller

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Chairman Miller’s Remarks on Health Care and Student Loan Reform

(This is a slightly different kind of diary post.  Below are Rep. George Miller’s (D-CA) remarks, as prepared for delivery, during floor debate on the health insurance and student loan reform legislation. Miller is the House author of both pieces of reform.)

Madame Speaker, I rise in support of this truly historic legislation that addresses two of America’s greatest troubles – the crushing costs and high obstacles of obtaining both quality health care and a college education.

Our nation and its economy have suffered from our longstanding failure to make health care and college accessible and affordable to all of the American people.

Americans have waited a long time for health insurance reform – nearly 100 years.

Today, Congress and President Obama will deliver on a central promise, on a dream deferred, on a crucial demand.  

Because of this legislation, for the first time in America’s history, never again will Americans have to worry about losing their health insurance if they change or lose their job.

Insurance companies will not be able to jack up premiums or deny coverage because of a pre-existing condition.

They will not be able to drop people’s coverage when they get sick – and need it most.

There is no other plan on the table today that offers Americans these vital assurances.

Our reforms will improve the lives of every single American – those with insurance today and those without it.

They will improve our economy by reducing the deficit, creating up to 4 million jobs over the next decade, and unshackling innovative business decisions from crippling health insurance costs.  

Our legislation offers families and employees of small businesses access to choices of affordable health plans; security and control over their health care; vital federal and state consumer protections; accountability for insurance companies; and coverage for 32 million Americans who don’t have insurance today.

Now, we’re pairing these truly historic health insurance reforms with another opportunity that cannot be missed: The chance to make the single largest investment in college affordability ever – and at no cost to taxpayers.

We are going to take tens of billions of dollars that for decades has gone to banks in the federal student loan program and instead give that money directly to students and to pay down the deficit.

For decades, these banks have had one of the sweetest deals in America: They receive taxpayer subsidies to make virtually risk-free loans to students.

As we speak, the federal government is now funding 88 percent of all federal student loan volume.

It has proven to be a more stable lender for students through shaky financial markets and a more cost-effective lender for taxpayers.

Ending these subsidies is not a radical idea.

President Clinton first identified these subsidies as wasteful in the 1990s.

President Bush eyed them in three of his budgets.

And President Obama has correctly proposed ending this boondoggle once and for all by originating all loans through the federal direct lending program – saving taxpayers $61 billion over 10 years.  

And that’s what our legislation accomplishes.

Our reforms are good for students, taxpayers and American jobs.

We will help low and middle-income students pay for college and invest in the support they need to graduate.

We will be more responsible with taxpayer dollars by using $10 billion of these savings for deficit reduction.

And we will end the practice of banks shipping lending jobs offshore.

Our reforms allow private lenders to service 100 percent of direct loans – preserving good jobs. But, unlike loans originated by banks, direct loans can only be serviced by workers in the United States.

That’s why last year, Sallie Mae brought 2,000 jobs they had shipped overseas back home.

It turns out they were competing for – and won – a direct loan servicing contract.

In fact, Sallie Mae has privately told workers at an Indiana servicing center that these reforms will not put their jobs at risk.  

They said a similar thing publicly to an Indiana newspaper.

Sallie Mae is now one of four companies that service 4.4 million direct loans.

With these savings, we invest $36 billion over 10 years to increase the Pell Grant to its highest level ever – including almost $14 billion to protect students from a Pell Grant shortfall.

If we don’t act immediately, eight million students could see their Pell Grants cut by 60 percent next year, and 600,000 students could lose their grants completely.

We will help new borrowers better manage their monthly payments.

We invest in community colleges, we invest in college access and completion programs, and we give vital support to Historically Black Colleges and Universities and Minority Serving Schools that play a unique role helping minority students graduate and succeed.

HBCUs graduate 40 percent of African-American students earning math, science, technology and engineering degrees, and 50 percent of African-American teachers.

And, this bill is fully paid for.

With this one move, we can make college more affordable, keep jobs in America, prepare young people for our global economy, and reduce our deficit by billions.

I’d like to thank Ruben Hinojosa, our higher education subcommittee chair, Tim Bishop, and all of our committee members for their tireless work on student loan reform.

And along with all the members of our committee, I’d like to especially thank Rob Andrews, our health subcommittee chair, for his backbreaking work over the last year on health reform.

We almost didn’t get here today.  You know that.

Opponents of health care reform have said anything and done everything to distort the facts, delay the process, and try to put off what Americans have asked for and needed for generations. They have tried to sow fear into the American people.

They cannot win on the merits. And they will continue to distort the facts and use scare tactics as we move forward.

But here we are today. We have made it to the final step in this process — despite all that noise.

And now we face a simple choice.

We can side with America’s families and college students and make health insurance and college more affordable and accessible – while creating millions of jobs and reducing the deficit.

Or, we can side with insurance companies and banks.

That’s it.

That’s the choice.

I’m siding with the American people. I urge each of my colleagues to join me.

Diaries & Misc.

Reform the Federal Student Loan Program

(These are the prepared remarks of Education and Committee Chairman George Miller from today’s press conference on the urgent need to include student loan reform as part of the reconciliation.)

Senate Democrats have a very simple choice to make in the next few weeks.

This choice speaks to the true character of our country and of our Congress.

It speaks to what America’s priorities will be for the next generation.

It speaks to fiscal responsibility and fairness.

Here’s the choice. We can continue a student loan program that the Congressional Budget office has documented will waste tens of billions of dollars over the next 10 years on a titanic boondoggle in excess subsidies to some of the nation’s rich and most powerful banks.

Or we can do what President Obama suggested in his budget, and what the Congress voted last year to do in its budget resolution.  We can reform the student loan program by taking these wasteful subsides to banks, and redeem the savings for millions of families and students who want a shot at attending college, go to a community college, and attend a school that is crumbling around them.  

It is that simple.

Just consider what this bill would do for students, families – and our economic future.

It would invest tens of billions of dollars in the Pell Grant scholarship.

For millions of Americans, Pell Grants are the pathway to prosperity.

They have become America’s great equalizer – allowing anyone with talent and gumption to get an education and a good job.

There are few greater job creators than a highly skilled workforce.

Our bill would invest billions in school modernization, give urgent help to historically black colleges and Hispanic serving institutions, and boost support for the nation’s bedrock local community colleges.

It would make our community colleges part of the solution to our competitive challenges by giving them the tools they need to prepare students for good jobs with local employers.

Who in good conscience can trade any of this away for billions in excess subsidies for banks?

Now, this is not a radical idea.

In his 2005, 2006 and 2008 budget requests, President George W. Bush recommended reducing these wasteful subsidies by tens of billions of dollars.

President Obama has shown the courage to take this on by insisting we re-deploy all of these subsidies to help students and families.

The 2009 budget resolutions passed by the House and Senate required both chambers to use reconciliation to enact student loan reforms that save taxpayers billions of dollars.

In order to comply with these reconciliation instructions, we would be required to save $1 billion for taxpayers over 5 years.

This legislation would be fully paid for.

But now this promise is at risk.

Critics of this bill, fueled by the banks’ well-heeled lobbyists, have been hard at work fighting to kill it.

They have been busy spreading lots of falsehoods about how this bill might impact the budget, or jobs, or students.

Let me set the record straight, right now.

This bill will not add a penny to the deficit – it will help reduce it. The budget reconciliation instructions require that any student loan reforms return at least $1 billion to the Treasury over 5 years.

It will meet PAY-GO. We are committed to that, and it will be done.

The bill creates and retains jobs.  It maintains a robust and appropriate role for private banks and lenders in servicing loans. Servicing loans through the Direct Loan program will not only preserve most jobs, it will bring jobs back home that can currently be shipped overseas by lenders.

Moving to Direct Loans is a much better use of taxpayer dollars. Consider that right now, between schools that have switched to Direct Loans and emergency federal aid banks are relying on – the federal government is already funding 8.8 of every 10 dollars lent in federal student lending.

The current FFEL system can’t continue.  We saw this two years ago when the markets seized up, students would have been left high and dry if we had not stepped in to provide liquidity.  

It’s also wrong to suggest this is being talked about at the 11th hour.

We have known since last April that reconciliation would be used for this bill.

So this is really what is comes down to now.

The Senate has a choice to do something that is fair and right for American families.

They have a choice to end this system of corporate welfare for banks – a system that has stayed alive because of well-entrenched lobbyists and cozy Washington relationships.

They can either continue to send tens of billions of dollars to banks and a broken system – or they can send those dollars directly to students, at no costs to taxpayers.

This is a moment in history where Senators can either look back and say – we did the right thing for the American people, or they can say we did the bidding of banks.

Diaries & Misc.

Recovery Act: Saving and Creating Jobs, Laying Foundation for Economic Growth

(An update on the Stimulus from Rep. Miller – promoted by Brian Leubitz)

One year ago, our nation was headed toward an economic collapse, shedding an average of 600,000 jobs a month. State and local budget cutbacks were putting teachers’ jobs – and our students’ education – in peril. Our economy was in need of emergency triage that would immediately begin to save and create jobs and lay the foundation for longer-term economic growth. One year after its enactment, it is clear that the American Recovery and Reinvestment Act is meeting these core goals.

Edit by Brian: See the flip for more…

To date, the law has already created or saved two million jobs and helped our economy grow at its fastest rate in years. It has funded more than 300,000 education jobs, keeping teachers in classrooms and children and students of all ages learning. It has helped minimize harmful cuts at public colleges and universities and provided students with larger Pell Grants to pay for college.

The Recovery Act has provided a much-needed lifeline for workers who lost their jobs – and their health insurance along with it. Millions of Americans have received extended or increased unemployment benefits and many got help paying for their COBRA premiums because of the Recovery Act. We can’t underestimate the difference this has made for laid-off workers struggling to put food on their tables, heat their homes, or pay for a visit to the doctor.

The Recovery Act is also making strategic investments in our future. Recovery programs are training displaced workers for high-growth jobs in our health care, biotech, clean energy and manufacturing sectors. The Race to the Top program is leveraging key education reforms that will better prepare our children for college, competitive jobs and a global economy.

The footprints of the Recovery Act run across my own district. It’s funding the construction of a dental clinic in Vacaville and a community health center in West County that will create 250 construction jobs immediately and longer-term health care jobs. It’s keeping teachers employed in Mt. Diablo, Martinez and West County school districts, or hiring new ones, like Jessica Pozos. It’s giving laid-off workers with families who depend on them, like Brandi Britt of Richmond, new hope by training her for a new career.

As President Obama and Congress have repeatedly said, the Recovery Act marked the beginning of our efforts to rebuild our economy and our middle class. Too many workers continue to lose their jobs or have trouble finding new ones. Our work will not be over until every American in need of a job can find one.

RECOVERY ACT: HELPING STUDENTS, WORKERS AND FAMILIES

  • 2 million: the number of jobs created or saved by Recovery dollars thus far, according to the Congressional Budget Office.
  • 300,000: the number of teaching and other education-related jobs saved or created.
  • $500: the increase in the Pell Grant scholarship eligible students received for the 2009-2010 year due to this law alone.
  • $2.4 billion: the amount of Federal support that helped colleges and universities keep teaching, even as enrollments grew, according to the State Higher Education Executive Officers.
Uncategorized

Nothing Is More Important Than Keeping Kids Safe in School

Today, the Committee on Education and Labor considered the Preventing Harmful Restraint and Seclusion in Schools Act. Congresswoman Cathy McMorris Rodgers and I introduced this bill in December for a simple reason: all children should be safe and protected at school.

Last year, the U.S. Government Accountability Office told our Committee about a shocking wave of abusive restraint and seclusion in our nation’s classrooms. They told us that hundreds of students in this country have been victims of this abuse. In many cases these victims were our smallest and most vulnerable children: children as young as four and five, and many students with disabilities. And in some instances, children died.

We learned that while restraint and seclusion should be considered emergency tactics used as a last resort, far more often these techniques are abused under the guise of discipline or to force compliance. Last year, in California, districts reported more than 14,300 cases of seclusion, restraint and other “emergency” interventions.

With no federal laws on the books restricting restraint and seclusion in schools, state laws read like the Wild West. Many states have no regulations whatsoever.

We learned that children currently have greater protections from these practices in medical and mental health facilities than in classrooms, where they spend most of their time. We also heard the heartbreaking stories of Cedric and Paige, two young students who were horribly abused by school staff using restraint and seclusion. Like many other victims, Cedric and Paige were not posing a serious threat to their teachers or peers. This hearing opened a flood gate for parents with their stories about their children. Parents from Maine to Missouri who felt like they had nowhere else to turn, called our Committee to share the devastation they experienced when their child was improperly restrained or locked in a seclusion room.

We cannot allow their traumatic stories to be ignored. When these abuses occur, it isn’t just the individual victims who suffer. It hurts their peers who witness these traumatizing events. It undermines the vast majority of teachers and staff who are trying to give students a quality education. It’s a nightmare for everyone involved.

Immediately after our hearing last spring, Education Secretary Arne Duncan announced plans to encourage states’ to review their policies on seclusion and restraint, and ensure that students are safe at school. I understand the Department plans to release their findings in the coming weeks and I look forward to learning more about states’ efforts. But there is no question that basic federal protections are needed to make it clear that restraint and seclusion techniques should be used only as a last resort, when someone is in imminent danger of physical injury and there are no alternatives.

The Preventing Harmful Restraint and Seclusion in Schools Act will for the first time establish minimum safety standards in schools, similar to federal protections already in place for children in other facilities that receive federal taxpayer dollars. The bill prohibits mechanical restraints, such as strapping children to chairs, misusing therapeutic equipment to punish students, or duct-taping parts of their bodies. It prohibits chemical restraints, like medications used to control behavior without a doctor’s prescription. It prohibits any restraint that restricts breathing. And it prohibits any aversive behavioral interventions that compromise health and safety, like denying students water, food, or clothing, denying access to the bathroom, or using pepper spray.

This bill will prohibit restraint or seclusion from being written into plans for individual student as intentional planned interventions, but allows for schools to plan for appropriate crisis intervention. It will require schools to notify parents after incidents when restraint or seclusion was used, so that parents don’t learn about these abuses from a whistle blowing teachers aid or classroom parent – or their own child’s bruises.

This is about helping teachers, not punishing them. This is about fixing a system that doesn’t properly support teachers and other school staff. That’s why this bill asks states to ensure that enough school staff are properly trained to keep students and staff safe, but gives states and local districts the flexibility to determine the training needs of each individual school.

I know we all agree that nothing is more important than keeping our kids safe. It is time to end this abuse in our schools. This legislation offers us that opportunity. I am very proud that we worked in a bipartisan way to introduce this bill. I’d like to thank Rep. McMorris Rodgers for her leadership and partnership in this effort. I’d also like to thank the National Disability Rights Network, for first bringing this abuse to our attention and to the National School Boards Association and the nearly 100 other organizations endorsing the bill.

Adapted from Chairman Miller’s statement at today’s markup of the Preventing Harmful Restraint and Seclusion in Schools Act.

Health Care

After Massachusetts Election, Health Insurance Reform Remains Critical to Economic Growth

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( – promoted by Robert Cruickshank)

A lot of things may have changed in light of the Massachusetts special election upset Tuesday, but one thing that hasn’t changed is the health insurance crisis in America. We must address this crisis.

 Health care costs are unsustainable; they’re still crushing families, small businesses and large companies. When people lose their jobs they lose their health insurance. People with jobs and who want coverage but find out they have a pre-existing condition still can’t get coverage. Businesses large and small come before Congress every day and tell us how they’re going to have to drop coverage for their employees or go out of business.

All of these problems remain, and so does our need to address them.

President Obama and a majority in both the House and Senate remain committed to enacting fiscally responsible health insurance reform that provides greater affordability, accessibility and accountability to American families and businesses. With the loss of the 60th vote in the Senate last Tuesday, we are exploring the means by which we can enact needed reform, but we are not backing away from our commitment to a responsible and balanced bill.

The election result in Massachusetts in part reflected the tremendous fear and frustration Americans understandably feel as the impacts of the worst recession in generations continue. Americans desperately want and need to see new jobs created, small businesses need help, our financial system requires new accountability, and we must reduce the budget deficit.

Despite stagnation in the Senate caused by the relentless and undemocratic opposition of the Republican minority, this Congress has been focused on jobs and the economy. In addition to the successful and critical American Recovery Act passed last year that is delivering millions of dollars to our community to create jobs, the House passed a second jobs bill just before Christmas that I helped to write to help save the jobs of teachers, firefighters, law enforcement officers and to put people back to work rebuilding our infrastructure. The Senate could not take up our bill because of Republican filibustering. We will continue to fight for new jobs and investments in our country.

But the economy and health reform are connected, and we can and must focus on both at the same time. Reforming health insurance laws is key to whether employers will hire or not. Reports show that reforming health insurance will create millions of jobs over the next decade and will help us reduce the deficit by billions of dollars.

Tragically, Republicans in Washington decided to become the ‘Party of No’. They announced early last year that they would do everything in their power to stop President Obama from enacting health insurance reform in the hopes of weakening the President’s standing. Senator-elect Scott Brown from Massachusetts has said “no” to health reform, even though Massachusetts is the only state in this country with affordable health care for all – a law that Sen. Brown supported. Their reform is similar to what we are trying to provide for all Americans, and it is overwhelmingly popular.

But saying “no” is not a solution for America. Saying “no” doesn’t help one worker keep his or her health insurance. Saying “no” doesn’t stop insurance companies from denying children coverage because of pre-existing conditions. Saying “no” doesn’t cure the health care problems that economists and business leaders agree are dragging our nation’s economy down and hurting our international competitiveness.

We recognize that voters in Massachusetts, like millions of other Americans, are upset about the economy and about parts of the health reform bill and special privileges that the Senate put in their bill for Nebraska, for example, and others. Those privileges have no place in this effort and should be removed from a final bill.

The path to reform has been made more difficult by Tuesday’s election, but the need for reform has become no less urgent.

What the House has been fighting for, and what we will continue to fight for, are key reforms to deliver quality, affordable health care for the American people that offer security for families and businesses across the country.

Also crossposted at Chairman Miller's personal blog.

Uncategorized

FAQ: COBRA Premium Reduction (Health Coverage for the Unemployed)

Recession-related job losses are threatening health coverage for many families. To help workers maintain their health coverage while they are between jobs, the American Recovery and Reinvestment Act (ARRA) provides a 65% reduction in the premiums payable by involuntarily terminated workers and their families for health care continuation coverage under COBRA. This premium reduction will last for up to 9 months.  Workers who have been involuntarily terminated during the period from September 1, 2008 through December 31, 2009 and their families are eligible. This premium reduction also applies to health care continuation coverage that may be required by states for insurance policies sponsored by small employers (so called state mini-COBRAs) and public employees.  This provision will help 7 million people maintain their health insurance by providing a vital bridge for families when workers have been forced out of their jobs as a result of the recession.

1.    QUESTION: Who is eligible for the premium reduction?

  A.    To be eligible for the premium reduction, you must be a COBRA qualified beneficiary who meets all of the following requirements:

      •    Is eligible for COBRA continuation coverage as a result of Federal or State law at any time during the period beginning September 1, 2008 and ending December 31, 2009;

      •    Elects COBRA coverage (when first offered or during the additional election period); and

      •    Was involuntarily terminated during the period beginning September 1, 2008 and ending December 31, 2009.  

  If you are eligible for other group health coverage (such as through a spouse’s plan) or for Medicare, you are not eligible for the premium reduction.  In addition, your same year (2009 and/or 2010) modified adjusted gross income must not exceed $125,000 (or $250,000 for families).  If your income exceeds this limit, all or part of the amount of your premium reduction may be recaptured by an increase in your income tax liability for the year.  

2.    QUESTION:  How do I know whether or not I have been involuntarily terminated from employment?

  A.    Involuntary termination is a termination that is at the direction of the employer.  Note that termination for gross misconduct will generally disqualify an employee and his/her family from COBRA coverage.  For more information on whether your termination is involuntary please call the Department of Labor’s Employee Benefits Security Administration’s Benefits Advisors at 1-866-444-3272.

3.    QUESTION:  How does the premium reduction work?

  A.    It works the same way as standard COBRA coverage.  However, instead of paying the full premium to the former employer/insurer, you will pay 35% of the premium.  The former employer/insurer will be compensated for the other 65% of the premium by the federal government.  

  The premium reduction is available as of your first period of coverage beginning on or after February 17, 2009, the date of enactment of this law.  Some plans may have already sent out bills for the full premium.  If you get a bill for the full premium and pay it, you will either be reimbursed for the overpayment or receive a credit toward future premium payments.

4.    QUESTION:  How do I sign up for the premium reduction?  

  A.    To sign-up for the premium reduction, you must enroll in COBRA coverage and fill out the premium reduction enrollment forms provided by your health plan.  Generally, under COBRA the employer must notify your health plan that you are being terminated within 30 days.  After that, your health plan must notify you within 14 days regarding your COBRA eligibility and provide you with materials regarding enrollment.  After February 17, 2009, plans will also begin sending out information regarding the premium reduction.  If you have not yet received information from your health plan, you can contact your plan directly.  

5.    QUESTION:  I was involuntarily terminated after September 1, 2008 and am enrolled in COBRA now.  How do I get the premium reduction?

  A.    As of your first period of coverage beginning on or after February 17, 2008, you are only required to pay 35% of your total premium.  You should immediately contact the former employer/insurer that administers your COBRA to obtain the documents necessary to establish eligibility for the premium reduction and explain that you intend to take advantage of the premium reduction and pay 35% of your premium.  If you have already paid the full amount for the next pay period, your former employer or insurer is required to reimburse you or credit a future payment.

6.    QUESTION:  What if I was involuntarily terminated after September 1, 2008 but didn’t elect COBRA within 60 days as required by law?

  A.    If you were involuntarily terminated from September 1, 2008 through February 16, 2009, but failed to initially elect COBRA you will get a second chance to elect COBRA and receive the premium reduction. No later than April 18, 2009 health plans should notify individuals about the second election period, in addition to providing any forms and information needed to enroll.  You will have 60 days after receipt of that notice to enroll in COBRA and the premium reduction.  However, you can contact your former employer now and say you want to take advantage of the second chance election period.  In either case, your coverage begins with the first period of coverage beginning on or after February 17, 2009.  

7.    QUESTION:  What if I was involuntarily terminated after September 1, 2008, elected COBRA within 60 days as required by law, but dropped the coverage?

  A.    If you were involuntarily terminated during the period from September 1, 2008 through February 16, 2009 and initially elected COBRA, but dropped the coverage (for example, because it was unaffordable), you will get a second chance to elect COBRA and receive the premium reduction.  No later than April 18, 2009 your health plan should notify individuals about the second election period and should provide any forms and information needed to enroll.  You will have 60 days after receipt of that notice to enroll in COBRA and sign up for the premium reduction.  However, you can contact your former employer now and say you want to take advantage of the second chance election period.  In either case, your coverage begins with the first period of coverage beginning on or after February 17, 2009.    

8.    QUESTION:  Who can take advantage of the additional election period?

  A.    Only plans subject to the Federal COBRA provisions are required to provide an additional election period when certain involuntary terminations occurred from September 1, 2008 through February 16, 2009.  ARRA does not require coverage provided under state continuation coverage provisions (including state mini-COBRA coverage) to offer an additional election period.  States may choose but are not required to offer a second election period.

9.    QUESTION:  Is death considered an involuntary termination?

  A.    No.  While death of an employee can be a qualifying event for that person’s beneficiaries to be eligible for COBRA coverage, death is not an involuntary termination of employment.  The beneficiaries would be required to pay the full premium amount if they elected COBRA.  However, if an employee dies after an involuntary termination, the employee’s beneficiaries may be entitled to the premium reduction for the remainder of the 9 month period that would otherwise be available.  

10.    QUESTION:  How long can I receive the premium reduction?  

  A.    Generally, individuals who qualify can receive the 65% premium reduction for up to 9 months.  COBRA coverage is still available for up to 18 months and 36 months in some cases.  If you remain on COBRA after the premium reduction period expires, you may be responsible to pay the full premium amount.  

  In certain situations, however, you would not be eligible to receive the premium reduction for 9 months.  If one of the following events occurred, the premium reduction would end at the earliest occurring event:  

      •    your employer (which in this case includes any responsible related or successor employer) no longer offers any group health plan to employees;

      •    you fail to make your premium payment; or

      •    you become eligible to receive health care through Medicare or another group health plan (such as the plan of a new employer or a spouse’s employer).  

  It is important to note that if and when you become eligible for coverage through Medicare or another group health plan, you must notify the plan administrator immediately.  While you remain eligible for COBRA when offered new coverage, you will no longer be eligible to receive the premium reduction.  Continuing to receive the premium reduction after becoming eligible for other coverage could result in a penalty equal to 110 percent of the premium provided to you after your eligibility ends.

11.    QUESTION:  What do I do if I think I qualify for the COBRA premium reduction but my plan tells me I do not?

  A.    If your health plan finds that you are ineligible for the premium reduction, you can apply for review of that determination by the Secretary of Labor or by the Secretary of Health and Human Services depending on your type of plan (see following question).  The Secretary will review your application and make a determination within 15 business days.  

12.    QUESTION:  Where do I send my appeal?

  A.    The Departments of Labor (DOL) and Health and Human Services (HHS) are currently developing processes and an official form that will be required to be completed for applications for review.  

      •    DOL will handle appeals related to private sector employers who are subject to ERISA’s COBRA provisions.  For more information or assistance determining where to file your appeal, visit www.dol.gov/COBRA or contact DOL at 1-866-444-3272.

      •    HHS will handle appeals for all government employees (federal and non-federal) as well as for those individuals covered by so-called mini-COBRA (insurance policies offered by employers with fewer than 20 employees).  

13.    QUESTION:  How does the income cap work?

  A.    The income cap is designed to ensure that the premium reductions are going to people who most need the help.  If your income for the year in which you are receiving the premium reduction (2009 and/or 2010) is more than $125,000 (or $250,000 for married couples filing a joint federal income tax return) all or part of the premium reduction may be recaptured by an increase in your income tax liability for the year.  If you think that your income may exceed the amounts above, consult your tax preparer or contact the IRS at 1-800-829-1040.

14.    QUESTION:  If I elect COBRA and receive the premium reduction, can I change my coverage or do I have to retain the coverage I had while employed?

  A.    Group health plans are permitted, but not required, to allow qualified beneficiaries to enroll in coverage that is different than the coverage they had at the time of the qualifying event.  Changing coverage will not cause an individual to be ineligible for the COBRA premium reduction, provided that: the premium for the different coverage is the same or lower than the coverage the individual had at the time of the qualifying event; the different coverage is also offered to active employees; and the different coverage is not limited to only dental coverage, vision coverage, counseling coverage, a flexible spending account, or on-site medical clinic.  If the plan permits individuals to change coverage options, the plan must provide the individuals with a notice of their opportunity to change.  Individuals have 90 days to elect to change their coverage after the notice is provided.

15.    QUESTION:  What if I was laid off before September 1, 2008, can I receive the premium reduction?  

  A.    No.  To be eligible for the premium reduction you must have lost your job on a date between September 1, 2008 and December 31, 2009.  

16.    QUESTION:  What if my employer went out of business and did not continue the company health plan, can I receive COBRA coverage and the premium reduction?

  A.    If your employer terminates all its health plans, COBRA continuation coverage will generally not be available unless another related or successor employer sponsors a group health plan responsible under COBRA for providing coverage to you.  

17.    QUESTION:  As an employer, how can I get more information about how the premium reduction works and how I will report the reductions on my quarterly federal tax return Form 941?

  A.    Contact the IRS at 1-800-829-4933.  

18.    QUESTION:  Where can I get more information if I have additional questions about the COBRA premium reduction?

  A.    Contact the Department of Labor’s Employee Benefits Security Administration’s Benefits Advisors at 1-866-444-3272.  In addition, the Employee Benefits Security Administration has developed a dedicated COBRA web page www.dol.gov/COBRA that will contain information on the program as it is developed.  Subscribe to this page to get up to date fact sheets, FAQs, model notices and applications.

This FAQ was jointly released by several U.S. House committees, including the Committee on Education and Labor, and is cross-posted on the EdLabor Journal.

Economy

Senate Should Quickly Confirm Rep. Solis as Next Secretary of Labor

(Well, I couldn’t agree more. – promoted by Brian Leubitz)

Congresswoman Hilda Solis is a strong champion of working families and will be an outstanding Secretary of Labor. Given our enormous economic challenges facing our nation, I urge the Senate to take swift action and confirm her nomination.

Congresswoman Solis will take the helm of the Department of Labor during an extremely trying time for our nation’s economy and our workers. Just today we learned that 524,000 workers lost their jobs in December for a total of 3.6 million since the recession began. And, economists tell us that we may have not hit bottom.

This is why our nation’s workers demand a Labor Secretary who understands the everyday struggles Americans are facing. Hilda Solis is the right person for the job. Her record in the California legislature as a leader on labor issues and her excellent work in Congress on behalf our of nation’s working men and women will restore the Department of Labor as an advocate for hard working Americans.

I look forward to working with Secretary-designate Solis and the Obama administration to move the country forward on our nation’s workers top priorities: expanding health care, ensuring fair and equal pay, improving worker safety, strengthening retirement security and rebuilding our middle class.

To read more about education and labor policy on the Hill, visit my blog, the EdLabor Journal.

Economy, education

Committee Will Work with Obama-Biden Administration to Rebuild and Strengthen the Middle Class

(Well, education is as good of a place to start digging ourselves out the Bush whole as anywhere. – promoted by Brian Leubitz)

Yesterday's historic election of Senators Barack Obama and Joe Biden as our next President and Vice President was a true victory for every child, student, worker and family in America. I congratulate Senators Obama and Biden, and I look forward to working closely with them to change the direction of our country and get our economy moving forward again.

During the past two years, the U.S. House Education and Labor Committee has focused on strengthening our nation's middle class – a priority that Senators Obama and Biden clearly share, as demonstrated by their careers and the focus of their historic campaign.

With our country facing the worst economic crisis since the Great Depression and our global leadership at risk, this mission is more important than ever.

In the next Congress, this committee will be dedicated to working with the new Obama-Biden administration and members of both parties of Congress to rescue our economy by rebuilding and strengthening America's middle class. We must get started right away by passing a Main Street recovery plan that will get Americans back to work and provide immediate relief to families and workers struggling with long-term unemployment and depleted state budgets.

We will dedicate ourselves to improving our nation's schools and continue our efforts to make college more affordable and accessible, so that every student has the opportunity to succeed. We are committed to rebuilding our country's roads, bridges and schools, and to green retrofitting and other modern energy programs that will create millions of good-paying jobs and reestablish America's technological leadership.

We will fight to restore workers' rights, so that every American can benefit from economic opportunity. And we will make the preservation and strengthening of retirement savings a priority, so that all Americans can enjoy a secure retirement after a lifetime of hard work.

Today marks a new beginning. Together, we can rescue our economy, restore the promise of the American Dream, and ensure that, in a nation as great as ours, the interests of students, workers, families and retirees are at the heart of our nation's priorities.

More information on recent hearings on the economy and the committee's work over the past two years.

(Cross-posted at the EdLabor Journal.)

Economy

Retirees Are Facing a 401(k) Savings Crisis

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(Welcome Rep. Miller to Calitics.   – promoted by David Dayen)

Today, I chaired a U.S. House Committee on Education and Labor hearing in San Francisco where we examined how the current financial crisis is affecting retirement savings.  Witnesses told us that after a lifetime of planning and saving, a growing number of retirees are facing shrinking 401(k)s and increasing insecurity as a result of the ongoing financial crisis.  While this crisis may have started on Wall Street, it's Main Street that stands to suffer the most. More than ever before, there is an urgent need to help Americans strengthen their retirement savings.

We also learned today that U.S. Pension Benefit Guaranty Corporation lost at least $3 billion in stock investments during the last fiscal year through August, and invested a significant portion of its funds in mortgage-backed securities. The head of the PBGC, Charles Millard, will testify before the committee on Friday in Washington regarding the agency's financial problems.

Taxpayers subsidize 401(k) plans by $80 billion dollars annually. For a taxpayer investment of this size, we must ensure that the structure of 401(k)s adequately protects the nest eggs of participating workers.

At a minimum, we know that much greater transparency and disclosures in 401(k) investment policies are needed, to protect workers from “hidden” fees that could be eating deeply into their retirement accounts.

And with seniors poised to suffer the most from the current economic turmoil, we must suspend an unfair tax penalty for seniors who don’t take a minimum withdrawal from their depleted retirement accounts, like 401(k)s.  We’ll push to enact legislation based on a bill Rep. Rob Andrews recently introduced, so that seniors who have seen their retirement savings evaporate don’t get penalized for trying to build those savings back up.

At the hearing today, we heard from Roberta Quan, a retired school teacher from San Pablo, CA, who is also caring for her husband who has Alzheimer’s:  “The recent unstable financial crisis is having a devastating effect on my life.  A lifetime of savings in catastrophic decline is demoralizing. The bottom line is that I am retired and unable to re-earn lost funds.”

Steve Carroll, a retired writer from Petaluma, CA, told us: “Our monthly budget has been severely depleted for life.  We still have our IRAs. But, as they are in mutual stock funds they are so far down in value that selling any of them right now, as the law requires of [my partner] Chuck, the loss would be an enormous percentage of the investment.”

Current regulations require account holders of 401(k)-type account to withdraw a minimum amount of money every year after they reach 70 ½ years old. If seniors do not take out a minimum amount based on an Internal Revenue Service formula, they are subject to a 50 percent penalty. For instance, if an individual fails to withdraw $4,000, they would be assessed a $2,000 tax the next year.

Registered investment advisor Mark Davis told us that a temporary repeal of minimum required distribution rules could help some retirees.  On October 10, Rep. Andrews and I called on U.S. Treasury Secretary Henry Paulson to suspend the tax penalty for retirees who are forced to make withdrawals but want to have additional time to rebuild their retirement savings.

Other witnesses spoke about problems with the current retirement security system where individually directed 401(k)-type plans have become a worker's main retirement savings vehicle. Where investment decisions were once made by professionals managing a traditional pension portfolio on behalf of workers, the responsibility of picking the right investments and implementing retirement savings strategies are left up to an individual account holder.

The Education and Labor Committee passed legislation earlier in the year that would help workers shop around for the best retirement investment options by providing complete information on the fees taken from their retirement accounts. According to the Government Accountability Office, a 1 percentage point difference in fees can reduce retirement benefits by nearly 20 percent.

We started this investigation last week, as part of a series of hearings the House is conducting to investigate the causes of the financial crisis, and what additional steps are needed to protect homeowners, workers, and families.

Last week, Peter Orszag, the director of the Congressional Budget Office, told us that American workers have lost more than $2 trillion in retirement savings over the last fifteen months – an astonishing loss that could lead workers to delay their retirement.

Several experts also told us that workers closest to retirement could suffer the most from this financial tsunami.  But while the housing and financial crises are intensifying retirement insecurity, we also know that workers’ retirement savings have been declining for quite some time.  Rising unemployment, stagnating wages and benefits, and a shift away from more traditional defined-benefit pension plans have been making it much harder for workers to save for retirement while juggling other expenses.

Now, the number of investors taking loans on their 401(k) accounts is increasing. And hardship withdrawals are also increasing. T. Rowe Price estimates a 14 percent increase in hardship withdrawals just in the first eight months of 2008. And, all the signs point to an increased frequency of 401(k) loans and hardship withdrawals in the coming year.

As other committees’ hearings have revealed, many of the Wall Street titans responsible for this crisis have still escaped with their plush perks, lavish spa trips and golden parachutes intact. This is an outrage. For too long, the Bush administration anything goes economic policy allowed Wall Street to go unchecked.

As we look at how we can rebuild workers’ retirement savings and our nation’s economy, the Democratic Congress will continue to conduct this much-needed oversight on behalf of the American people.

Being able to save for retirement after a lifetime of hard work has always been a core tenet of the American Dream. We can’t allow the promise of a secure retirement for workers to become a casualty of the financial crisis.

Cross-posted at the EdLabor Journal.