“Examining the Policies and Priorities of the Employee Benefits Security Administration”

ok i'm gonna go with four oh yeah that's true yeah ok great yeah oh yeah i think i'm going all blue now alright i'll play a card oh The subcommittee on health, employment, labor and pensions will come to order. I note that a quorum is present. Without objection, the chair is authorized to call a recess at any time. Today's hearing will examine the policies and priorities of the Employee Benefit Security Administration, EPSA, under the leadership of Assistant Secretary David uh and and David, make sure I get this right, uh R Aronowitz? Would that be correct? Okay. I didn't, okay, good. Thank you. The committee is focused on protecting workers, lowering costs, restoring accountability in our benefit system. Simply put, retirement and health benefits must actually work for American families. Today we will hear about the ways the Trump administration is advancing these priorities. EPSA is responsible for regulating employer provided uh benefit plans subject to the Employee Retirement Income Security Act of nineteen seventy-four. um, as uh known as ERISA. This includes the oversight of millions of retirement and health benefit plans covering a hundred and fifty-six million Americans and holding approximately fourteen trillion in assets. The retirement savings that Americans have worked so hard for should never be put at risk by politically motivated mismanagement. Retirement plans should be about returns, not politics. The Trump administration has taken action to reverse harm harmful Biden era policies, so work workers' retirement savings are invested to prioritize maximum returns, instead of notoriously underperforming political or social causes. My bill, the Protecting Prudent Investment of Retirement Savings Act, does exactly this, and I look forward to hearing what further action can be taken by EPSA. Too often health care prices are hidden from both patients and employers, making true competition impossible as costs soar. Competition is the only way to bring down Worse, such high costs and regulatory burdens make it harder for employers to offer competitive health care to their employees. Employers should have access to health plan data so they can design plans that meet employee needs while lowering health care costs. This committee will continue to prioritize legislation that expands health care and billing transparency, and ends abusive pricing and kickback schemes while working to expand access to high quality Finally, we must rein in burdensome and costly investigations. While oversight of employee benefit plans is necessary, it must be targeted, efficient, and focused on real violations. Under the Biden administration, EPSA abused its authority by conducting lengthy and aimless investigations paid for by taxpayers and employers. This committee has advanced legislation targeting this very problem, and I look forward to hearing what steps the Trump administration

Thank you, Mister Chairman,

Thank you.

and I also want to welcome the

Thank you.

assistant secretary. Uh, this is your first time testifying before our subcommittee since uh you were confirmed, so welcome. Um, the Department of Labor's Employee Benefit Security Administration, EPSA for short, is a critically important agency that is charged with protecting workers harder in retirement and health benefits. EPSA has tremendous scope overseeing over eight hundred and thirty-seven thousand private sector retirement plans, How many? roughly two point eight million health plans and five hundred and twenty-eight five hundred and twenty-one thousand uh other plans. While EPSA has enormous responsibilities, its funding and staffing are woefully inadequate. Unfortunately, President Trump's most recent budget makes things worse, proposing to cut EPSA's budget by ten million below last year's funding level. Resulting in a reduction of forty-seven full-time employees, EPSA's budget once supported over a thousand employees, yet President Trump's proposed funding level for EPSA would support We report only six forty. That's unacceptable. We all want an efficient delivery of services. But we don't want a replication of doge that is not thoughtful and analyzed properly. Today's hearing comes at a time when workers and their families across the country are struggling to afford basic necessities. We look at gas prices. President Trump's reckless tariffs and senseless war in Iran have spurred chaos in the financial markets although they're good today but who knows what'll happen caused largely by the erratic uh policies that have left uh inconsistencies at the gas pump for struggling families. According to data from Vanguard, there's a rising number of Americans who are tapping their retirement savings accounts to cover emergency expenses. And the New York Times recently reported on the trend of middle class Americans selling their plasma to help with the high cost of housing, groceries and health care. The last thing that these American workers and their need is more risk. But I'm afraid that's what we've been getting from the current administration. The Labor Department abandoned an essential protection ensuring workers do not get ripped off of their financial - by their financial advisor when investing their retirement nest egg. Return on investment is important, but also again proper oversight on that return on investment and financial advisors is also important. The department also proposed a rule to provide a safe harbor for managers to offer high-cost investments, such as crypto and private equity, and workers' four O one K plans. The department also has taken no action to address the pernicious claim denials that make health care unaffordable for Mar- Americans, and has been a important subject of this subcommittee in both majorities. And the department announced it would not enforce the two hundred and twenty-four mental health parity final rule. and will not defend it from a lawsuit brought by representatives of some of the largest corporations in the world who want to avoid their responsibilities to provide health care under their insurance plans, including parity. Mister Under Secretary, I understand that you led a successful business before taking this public service role. As my committee members know, I often remind my Republican colleagues, I was once a Republican and I was a once a small business owner. I understand the pressure of making a payroll. But I'm concerned that EPS's approach so far under your leadership sees such regulatory issues through a fairly narrow lens by combating legis- litigation by encouraging comb- combative litigation. As a result, EPS appears to consistently prioritize the interest of corporations over workers and their families, who I'm sure we both agree are central to EPS's mission. This is not a correct approach in my view. Workers and

Thank you for yielding and uh uh, Mister Secretary, I do need to make one correction. I apologize, it's it's Daniel and not David.

Thank you.

Two great names, but uh but I apologize and I correct the record on that. All right, now for certain c c c committee rule eight C, all members who wish to insert written statements to the record may do so by submitting them to the committee clerk electronically in Microsoft Word format by five p m fourteen days after this hearing. And without objection, the hearing record will remain open for fourteen days to allow such statements and other extraneous material noted during the hearing to be submitted for the official hearing record I note that some of our colleagues who are not permanent members of this c of this committee may may be waving on for the purpose of today's hearing uh I will now turn to the inter- of our witness, uh the Honorable Daniel uh Ronovitz, Assistant Secretary of Employee Benefits of the Employee Benefits Security Administration at the Department of Labor. S- uh we thank you for being here today. We look forward to your testimony. Pursuit the committee rules, I would ask you that you limit your oral presentation to a three minute summary of your written statement. As committee members have many questions for you, the clock will count down from three minutes. Pursuit the committee rule eight.

Good morning, Chairman Allen, Ranking Member De Saunier, and members of the subcommittee. Good morning, Chairman Allen, Ranking Member De Saunier and members of the subcommittee. Thank you for inviting me here today to testify about the important work Thank you for inviting me to testify about the important work of the employee benefit security administration at the united states department of labor ebs is charged with protecting american workers retirement and healthcare benefits under erissa we are stewards of retirement and health plans in america unfortunately prior to my confirmation last year litigation abuse and regulatory overreach threatened harm to americans retirement and health plans innovation stagnated as employer leaders were paralyzed with very rational fears. EBSA, under President Trump and Secretary Chavez de Remer's bold leadership, is charting a new course. In a voluntary system, we want more employers to offer more benefits. To execute this vision, we are addressing regulatory overreach and litigation abuse with three key goals in mind. First, we are providing regulatory clarity for retirement and health plan sponsors. President Trump's American Worker First agenda for employer sponsored

Mm.

health care is designed to put control back in the hands of employers and employees, drive down costs, and maximize value. We strive for a health care system where every dollar is traceable, every contract is understandable, and employers and workers get real value for their money. Our mission is simple. Use EPSA's full power to demand value and lower cost by holding health insurers, PBMs, and service providers accountable. EPSA's groundbreaking proposed transparency rulemaking gives plan fiduciaries the tools they need to carry out their responsibilities and negotiate fair contracts with PBMs. Once finalized, this rule will save the American worker and the health care system billions of dollars over the next ten years. Coupled with the new provisions and the consolidated appropriations act of two thousand twenty six specifically the requirement to pass through one hundred percent of manufacture rebates this creates for the first time a complete transparency framework for prescription drug pricing. For retirement plans under President Trump's directive, EPSA took decisive steps on March thirty first to alleviate regulatory burdens and litigation risks that interfere with the ability of American workers to achieve the competitive return and asset diversification necessary to secure a dignified and comfortable retirement. We published a notice of proposed rulemaking on investment selection that will assist plan fiduciaries who follow a prudent process, as outlined in twenty Safe Harbor examples in diversifying plan investment choices from unfair hindsight second guessing of discretionary fiduciary decisions. Our second goal is to ensure that EPSA's enforcement is fair even-handed and efficient. We will accomplish this objective with four guiding enforcement principles, including strategic focus on the most significant harm to planned participants, fairness and proper notice to the regulated community of all enforcement priorities, and proper oversight to ensure EPSA's enforcement is consistent and uniform nationwide and finally ensuring that EPSA's enforcement will be timely and responsive. EPSA's third goal is to address ERISA class action litigation abuse that has stifled innovation and plan design paralyzing conscientious plan fiduciaries who follow sound fiduciary practices this is why we have filed a number of amicus briefs to defend ERISA as a law of process in which independent and conflict free plan fiduciaries have discretion and flexibility to act in the best interest of their participants importantly we are not depriving workers of their right to sue EBSA will ardently protect the right of participants to sue when the harm is real. Our amicus program is decisively pro-ERISA, as EBSA's job is to protect and steward America's retirement and health systems. We ber- believe this three-part formula is how we deliver on President Trump, p- Trump's goal to usher in a new golden age for Americans and how we achieve a new golden age of employee benefits. I look forward to

Thank you, Mr. Secretary. Under committee rule nine, we will now question the Assistant Secretary under the five-minute rule. Uh, I would like to first recommend uh uh recognize our esteemed Chairman of the full committee uh, Mister Wahlberg, for his five minutes of questioning.

Thank you, Mister Chairman, and uh, Mister Romano, it's uh thank you for being here. I'm sure you're aware you're in a an extremely important position. Uh, and and uh too often we don't really think till it's too late about the necessity of planning uh for the future, especially in the financial area, to make sure the retirement works. And so, appreciate your efforts to beef it up and to encourage more to think seriously. Um, the committee wants workers along that line to uh save for the retirement with a peace of mind, uh that they will have financial security uh during their retirement year. The question I have is what what can EBSA do to encourage four O one K plan fiduciaries to adopt lifetime income solutions in their plans and how could Congress assist uh EBSA in that regard?

Thank you for that question. At EBSA our job i- is to put out clear rules and guidance on how to follow a prudent process. We don't pick winners we don't decide what is in plans, but we did put out at President Trump's directive an investment selection rule in which we took fifty-two years of ERISA law ERISA ERISA law and we affirmed that ERISA is a law of process in which plan fiduciaries have discretion and flexibility to do, in a responsible way, what they think is right for their plan participants. We wanted to give them confidence that if they add lifetime income, or other solutions that have been enjoyed by government workers and professors in four O three B plans for years, that they will have the confidence that they have the discretion and flexibility to act in the best interest of participants, and that a court should give them a presumption of prudence. So that's how we've acted decisively. It's a proposed rule. We're in a comment period, but we hope to get many comments to help us put a great final rule that will give confidence to plan fiduciaries in America.

Yeah, I would ho- I would hope that that would, would Because the creativity that's needed to develop plans and to give opportunities for employees um from the employer is is so important. Uh, good to hear, the investment decision that workers and retirees make have a profound effect on the value of their savings at retirement and through their retirement years. Can you discuss uh briefly the importance of in- investment returns and the role that market volatility uh plays in retirement savings, and following along that line, how can alternative assets such as private market investments help an asset allocation fund in a four one K plan, uh, to mitigate market volatility?

Thank you for that question. Under our investment selection proposed rule, we highlighted for fiduciaries the relationship between risk and reward. We mentioned modern portfolio theory, which is an investment framework that maximizes risk-adjusted return through diversification and optimal asset allocation. Diversification is the key to protect against against market volat volatility. Again, we were asset neutral, we're not picking winners and losers, but we hope to give plan fiduciaries confidence in a road map to offer alternatives that may or may not be right for their plan participants. We also make give multiple examples of risk mitigation strategies, that can be confidently used in the r EBSA plans to protect against market volatility.

That gives them the choice, yeah. Um, in March, EBSA published a proposed rule on fiduciary duties in selecting designated investment alternatives. The preamble to the proposed rule states, and I quote, "The goal is to alleviate certain regulatory burdens and litigation risks that interfere with the ability of American workers to achieve a dignified and comfortable retirement." How has litigation risk impaired innovation in retirement and health plans?

Thank you, Mister Chairman, for raising that, I was a fiduciary liability underwriter and I underwrote some of the most creative companies in America. And what I saw is these companies are very creative in their products, including one company that was electrifying cars and putting people on uh with the goal to put people on on the moon and and in Mars, but they were risk adverse in their retirement plan. It stifles innovation because they're they're instead of asking what is in the best interest of plan participants, they're asking how do I keep from being sued. That's the problem that we're trying to address. That's what litigation abuse has done.

OK.

I appreciate it. I yield back.

Uh, the gentleman yields, and now I'll call on Mister Courtney for his five minutes of questioning.

Great. Thank you, uh, Mister Chairman. Um, Mister Reinalds, uh, I'd like to ask you about an issue on health care price transparency which I think we can find some common ground. Um earlier this year Congress passed with a bipartisan majority the consolidated appropriations acts twenty twenty six it included a provision from a bill which I had introduced the hidden fee disclosure act which would clarify who is a quote covered service provider for purposes of a RISC's health plan fee disclosure requirements and as you know the bill explicitly itemized who covered service uh providers uh are. Uh my colleagues, Mister Scott and Mister Desaunier, and I wrote to you about this issue a few weeks ago and I appreciate you responded promptly um but I do wanna get a little more clarity uh if I could uh this morning. Um as you know, all group he- health plan cons- covered service providers now must disclose their direct and indirect compensation to plan fiduciaries. And again, that includes a broader spectrum than just uh PBMs um so can you clarify your understanding

Thank you for that opportunity.

Mm.

Our transparency regulation focused on PBMs, we put out an extended comment period in which we asked the regulated community to to give comments on how we can harmonize with your legislation. And I got a letter from you the other, yeah, even yesterday, and we appreciate that you said that we were in a in a good head start and, and we We do have common ground, and we so we just got five hundred and eighty-four comments. The comment period ended yesterday, and we fully intend to review those comments. I don't wanna prejudge what we're going to do, but we we I heard you loud and clear in your own comment letter in which you told us that we should go bolder and broader beyond just PBMs and so I don't wanna prejudge our role cuz we're following the administrative procedure act, but we do have significant common ground. The goal

Sure. So again, uh, but I wanna just, um, go back and I, again, appreciate that you're moving forward with the PBM, uh, rule, but there, as a f- another former employer, um, you know, there's a lot of other providers that, um, you know, are covered by the statute in terms of disclosure. And I mean I could read it out here, I mean it's uh about a dozen or so different groups there and uh our letter you know really was looking not necessarily for regulation to cover, you know sweeping regulation to cover all of them, but really just to have a guidance from the department so that um stakeholders understand what their obligations are under the law, which again the ink is barely dry. Uh but it again is something that has been worked on for a number of years in this committee and and across Congress.

It thank you for highlighting that. we're we're the first ebs administration that ever put out transparency, notice of proposed regulations, and we are clearly focused on using the full power of ERISA, never been done before, to hold health insurance companies accountable, to hold service providers accountable, and to drive better value and lower cost. You have my commitment. That is what we're focused on and you can see what we've already done. We we we we agree with you.

And I appreciate that. I I guess, you know, there's there's been all

Without objection.

Thank you. Um, one other sort of uh part of your portfolio which again, President Trump um, you know, put out uh in his great American health care plan that um they would they proposed requiring health insurers to publish the percentage of insurance claims, they reject. Again, this is another consensus issue. The Affordable Care Act actually has language in it that mandated the same requirement uh for insurance companies. Um the Inspector General's office in twenty sixteen uh recommended that the form fifty five

It i- it is absolutely our priority. It's in our national priorities. Mm. We are moving EPSA from lopsided e- efforts against retirement

The gentleman yields, and now I'll recognize myself for my five minutes of questioning. I was interested in your testimony I served in the last Congress on the healthy future uh task force, and what uh what I could not get was a breakdown of where every dollar goes in health care cost. Nobody could give me that information, not even the former secretary of health. Uh, I hope that you will continue to work on that so we know where the dollars are going and how they're being used. The other thing that I'm interested in under ERISA is to give ERISA a waiver, uh, from the Affordable Care Act, uh, so that it does not have to comply with all this s- uh, stuff. I mean, self-insurance is the way of the future. Uh, all the fifty to fi- uh, to five hundred, uh, uh, largest company's self-insurer. And, you know, they are very pleased with what they're able to do in the marketplace. Uh, my legislation protecting now getting on to my questions, uh, my legislation protecting prudent investment of retirement savings act insures that ESG impact investing does not take priority over the retirement security of pension plan participants and beneficiaries. What steps has EPSA taken to reverse the harmful Biden-Harris administration's policies that would put impact investing for special interest over retirement security of American workers.

Thank you for the question. I can't talk about any specific rulemaking, but I can tell you that we told the fifth circuit that that we were addressing this, a- and so, uh, unfortunately I can't talk about what we're doing, but we obviously believe in the exclusive purpose rule and exclusive means exclusive.

Right. Uh, and for five decades employee stock ownership plans or ESOPs uh have uh waited for regular regulatory guidance on the valuation of employer stock. My legislation, the retire through ownership act, passed this committee unanimously by a vote of thirty-five to zero. My legislation would adopt long-standing guidelines issued by the Department of Treasury for stock valuation. This legislation gives cert certainty to ESOP fiduciaries on stock valuation. For years, DOL attempted to regulate ESOPs with litigation rather than definitive

Thank you for the opportunity to address that. I live the American dream by having ownership in an American business, and we firmly in the Trump administration believe in giving maximum opportunities for Americans to have stake uh stakes in their companies. We are pro-ESOP. What I have done so far is we just put out guiding principles that we've been using, where where we will not regulate

Good, good. Thank you. Uh,

Uh,

for years, For years, uh, uh, pharmacy benefit, pharmacy benefit, managers have benefited from opaque uh pricing tactics, while health care costs continue to soar. My legislation, the PBM kick-back prohibition act, would prohibit PBMs from paying consultants and brokers who give trusted advice to employers and group he- uh health plan fiduciaries from taking compensation for steering businesses uh to PBMs. Can you talk about Epsom's work to curb PBM's abusive practices and how might Congress be able to assist you with this effort?

thank you for the opportunity to highlight our notice of proposed rule making on p b m transparency. We broadly defined what a p b m is. We prod- broadly defined all types of compensation. We wanna remove the black box for planned fiduciaries so they know what they're paying for, can drive better value and get better b- and get lower lower cost. And we look forward to reading all of the comments, including from this committee, if we can do

Good. Well, thank you very much. And, uh, per my original comment, uh, we have got to do something to compete. We got to the only way to drive down costs is competition. And we've got to create a program, and I think Arisa is the perfect place,

Mm-hmm.

to allow every small business and large businesses to self-insure. And also, uh, uh, receive a waiver uh as the unions and the faith-based community received from uh the affordable care act uh so we can uh uh have a completely private program and it would also be great to include self-employed uh people under the ERISA laws and I think uh uh you know that that's something I just wanted to leave with you and uh you and you got ten seconds if you'd like to comment on that.

We are here to provide technical assistance in

OK, great. Thank you. Next uh, Mister Norcross, you are recognized for five minutes of questioning.

Thank you, Chairman and ranking member, for uh what you do each and every day and in spite of uh many differences that we have on this committee, there is much alignment on issues like retirement, as the chairman spoke of in his meeting, but I want to uh talk about something I think there is certainly uh over the last decade much focus on the silent side of health benefits and that's mental health. And if you go back just ten years the way not only uh the citizens viewed this, how this committee and certainly uh benefits look at that. So the idea that mental health is as real and is as important as any physical ailment. Yet, we understand that there is not parity. And this is where you come into play, the parity act that says if you're treating the physical, you have to treat the mental. And that includes one of the biggest killers for those under twenty five years of age, and that's the disease, the disease of addiction. Um, we've worked together over the last few years trying to bring those health insurers to the table because as you know in the information you get um it is difficult to find out where there is not parity going on but as you say time and time again holding health insurers PBM and service providers accountable core issue you completely are right on that yet when we look at the enforcing the parity act I'm concerned about number of actions this administration has changed over previous administrations, where we worked together on these things. It appears, and I'd love to hear, when we're finished here, your views on the announcement you made that you no longer will enforce the requirements of the parity final rule. It seems that you're, it doesn't seem, it is, that you are backing away some of those key elements that we do not get from health insurance And then there is no way to enforce it. There are no penalties. They get a slap on their wrist. So collecting that information, yet you're backing off from that. And in addition to that, President Trump's own bipartisan opioid task force provided the department with the authority to oppose those monetary penalties. Yet, here we are going back. Would you explain me the difference of what we were trying to do before, and since the new administration

Thank you for the opportunity to correct the record. My personal experience is I have two children that have been in eight different residential treatment facilities, Oh, good question. only one of that was paid for, and then retroactively the insurance company said it was no longer medically necessary and then uh my appeal rights were taken even though I hadn't used them so we I have significant personal experience. This EPSA is one hundred percent committed to knocking down every possible barrier to mental health. We are in litigation, and so I can't talk about the comparative analyses, but we restated the national priorities of EPSA for the first time in twenty years, and number one on that is knocking down barriers to mental health. There are many doors. It's not just comparative analysis which I don't believe got us anywhere, it just created cost and burden. We doing investigations on burdensome claim denials and medical necessity unjustified blank uh uh exclusions for aba therapy and medication assisted treatment for opioid ghost networks conflict of interest

So, if I could, I only have a minute left. I appreciate it, my heart goes out to you for what so many families have gone through, is watching addiction take over the lives of people they love. But the idea of you can assess, and let's just assume for the sake of argument, that you find they are not enforced, the the parity act is not being adhered to. So, if you don't have any penalties for any of us who drive anywhere, you understand that if there's a radar and a policeman out there, you're going to watch what you're doing. We don't have that. We were heading in that direction. Can I at least get from you that you will do whatever your ability gives you to do to make sure this parity act is enforced and saving the lives of whether it's your children or my children.

You have my commitment that I will knock down every barrier to good mental health treatment for all American workers and their families.

Thank you, and we need enforcement penalties. I yield back.

The gentleman yields, and now I'll I'll recognize Mister Owens for his

Thank you, Mr. Chair, uh, for convening this very important, um, uh, committee meeting. I look forward to hearing today from how how the Employee Benefits Security Administration is working to serve American people and help them achieve more stable financial future. Uh, Mister, uh, uh, Ronowitz, uh, this subcommittee received testimony earlier this year, stating that the repri- retirement plan participant education needed to minif- meaningfully improve in uh retirement decision making. Uh, this is because of participants' overall financial literacy is essential to enabling the best savings and and spending decisions that are foundational to retirement planning. I'm grateful to work that's already been done by this administration to improve uh financial literacy and stability through Trump accounts. Uh with parents giving their children treasury issued stock uh uh ownership, it will incentivize as they grow to be literally uh literate, uh f- financial literate. They'll also learn how to access um tax advantage savings and to participate and, and benefit My question to you is uh what are the steps that retirement plan sponsors can take to improve the financial literacy of plan particip participants.

Thank you for highlighting this important issue. Whenever I speak about financial literacy and retirement, I always say three things. Start early, maximize your employer match, and diversify your investments. The important thing, but as head of EPSA, my job as I see it is to empower fiduciaries to give good education in financial literacy. Our job is is to empower the fiduciaries to do it. And one thing that we did in the two thousand uh fiduciary, two thousand twenty-four fiduciary rule, w- we saw a survey where twenty-five percent of employers were now afraid to give partic- participant education because of liability. We withdrew that. The SEC will monitor IRAs and we will promote good education from EPSA, but we're going to

OK, thank you. Under the Biden administration, the RISC um fiduciaries were permitted to consider the environmental, social, social and governance, ESG, impact as part of the investment decision in proxy voting. However, the American people have spoken. They are more concerned about making sure their money gets the best return on investment than going toward woke investments. Uh, can you tell me more about how um EBSA is working toward ensuring the retirement plans are generating the best

Thank you for identifying that. There's sev- several several things. President Trump asked us to give guidance if necessary on whether proxy advisors can can be seen as fiduciaries, a- and we gave guidance on when and if they can be fiduciaries under the five-part test that that has been around over over fifty years. Importantly, also our investment selection rule is designed to give a road map on what a prudent fiduciary process looks like, what an objective, thorough and analytical prudent investment selection looks like. And and we make clear that planned fiduciaries have discretion and flexibility to do what they think is in the best interest of planned participants. And what what what we nudge planned fiduciaries to do is to look at the risk adjusted return net of fees, and that's their goal, what is in the best interest of of planned participants. And we don't necessarily know what that is, in in the future. And and we wanna give them the tools so they can continually in every fiduciary plan meeting ask what is in the best interest of plan participants and right now, what I'm afraid of is plan fiduciaries are asking how do I not get sued?

Mm-hmm.

And we have to change that paradigm so that they're asking how do I help my employees?

And I might, kinda leading to this next question I have, under the EBSA and Biden administration, it was recognized to carry out punitive and and aimless investigations. that went on for years uh without sign of ending. Can you tell us more about the multi-year and meaningless investigations carried under the uh out under the previous administration?

Well, I I was a fiduciary liability underwriter and I insured thousands of plans, and I paid for many of those investigations that went on for years and years. In an insurance company you wanna close out claims and I frustratedly couldn't close them out so I I was a first-hand consumer of of of that type of abuse. Now what I learned when I got to EPSA is we have really good investigators, these are really good employees, and they just needed better leadership. And so what we did was we put out guiding principles so that we know what we stand for, and when we're looking at an investigation, we can say w- well, should we do this investigation or not? We we we the the four part guiding principles are to make sure that we are following ERISA that that that we are not regulating by enforcement and one of the guidance, i is that we're specifically All investigations are now on a t- on a shot clock. Simple investigations must be done unless there's exigent circumstances in eighteen months and thirty months for more complex investigation. There's always exigent circumstances. The point is is that we have management best practices in which there's accountability and and and the thing I'm most excited about is the investigators are excited to follow this guidance and they're already fi- uh fi- it's a course correction that all investigators are excited about.

Mm.

We're bringing a better EPSA in which we are thoughtfully demonstrating integrity and c- accountability in in in in what we're doing.

Well, thank you so much, uh, I'm looking forward to this new chapter for young and old Americans this year. Thank you so much, and uh, you're back.

Gentleman yields, now I call on Miss McBath from Georgia for her line-up of five minutes of questioning.

Thank you, Chairman Allen, and Ranking Member DeSogne, and thank you to our witness today. The Employee Benefit Security Administration has the important responsibility protecting the health benefits of more than a hundred and fifty million hard-working Americans on employee-sponsored health uh insurance. Unfortunately, a growing number of Americans who have actually put in their time at work and paid into their health care plans are not receiving the benefits the health care benefits that they are entitled to. With the increasing complexity of the health care system the Employee Benefit Security Administration's responsibilities have grown significantly. Yet the agency remains chronically underfunded and understaffed, with the president's newest budget requesting a further ten million dollar cut to an already overworked agency. The lack of resources at this agency means that patients continue to face cruel and unnecessary delays that limit access to necessary lifesaving care. In the last session, Congressman Rick Allen and I in a letter to the employee benefits security administration regarding our concerns about the role of alternative funding programs in self-funded plans. Under the guise of saving money, alternative funding programs misled employers and pushed them to plans that ultimately exclude certain specialty drugs or deny timely coverage for covered treatments. These middlemen abandoned patience. Pushing them to patient assistant programs that are not meant for them, or pressuring them to use illegal importation methods. Ultimately, and far too often, these alternative funding pathways fail our patients, leaving them to shoulder the full cost of their life-saving medication, or experience delays that can result in harmful complications. Like a cancer patient who relies on an oral oncolytic. when they know other therapy actually works. Prior authorization deemed this medication medically necessary, but the patient's alternative funding program denied coverage for the treatment, forcing the patient to jump through unnecessary hoops that caused him to miss treatment for an entire month. Or, like a cystic fibrosis fibrosis patient who relies on a modulator therapy, which is critical for treating their chronic disease. Because of an alternative funding program, their covered treatment was denied, resulting in a six month gap in their care. Six months. Six months of waiting that resulted in irreversible lung damage that caused the patient's health to deteriorate, ultimately forcing them to be hospitalized and leave

Thank you for that explanation. Uh, I agree with you, it's outrageous. I if the facts are as you stated, that that's wrong, and I took this job to remember.

Mm.

exactly what you just articulated. I have challenged all of our investigators, our our great head of have an head of enforcement, our regional directors. I told them find more health care cases to use the full power of ERISA, which includes improper claims denials, and we're gonna hold health care companies accountable. These promised benefits to Americans must be upheld. That's my job, and I guarantee you I'm doing it.

I'm glad to hear that, because no one should have to wait for lifesaving treatment. And the reality is not everyone can wait for the lifesaving treatment. While the agency is tasked with this important role that has financial and profoundly personal impacts for all those who uh in our health care system, that they're in our health care system, years of underfunding and understaffing have threatened to undermine that mission that you speak of. Assistant Secretary I share your vision of making the employee benefit secretary administration more efficient and more fair, so that patients are not left hanging while bills are piling up and life-saving treatments go delayed. With your commitment to improving the efficacy of the agency, I hope you will provide timely oversight into alternative funding programs. Their conduct hurts both employers and employee employees alike, misleading. misleading employers and leaving employees in the lurch. Patients are not getting the answers that they need. Claims continue to be denied and more Americans are left without the treatments that keep them healthy and keep them whole. On behalf of the millions of Americans who rely on health insurance through their jobs, it is our duty, your duty as well, to support oversight, cut through red tape, and protect patients' lives. NIU.

Thank you. And I'd like to recogn recognize my friend from Pennsylvania, Mister McKenzie.

Thank you. Mister Assistant Secretary, I wanna start by thanking you and your team for your work on the proposal of how best to expand access to an alternative investments in four O one K plans. Uh, it's clear that you and the secretary and everybody else on your team has put a lot of time into this proposal, including coordinating with your colleagues at the Department of Treasury and the SEC. These types of investment options have been available pension funds for decades, and I think it's important and fair that all retirement savers have equal access. Uh, I also share with many of my colleagues that the belief that investor protections should remain a critical focus of this proposal and in fact, there are many layers of protection and fiduciaries between a retirement saver and the underlying investments being discussed here today. Can you please describe the level of scrutiny and protection when it comes to the selection

Thank you for highlighting our work on this. We're really proud of it. We outlined in our rule fifty-two years of prior guidance, sorta gave a history lesson on what EBSA has done in the past, and then we built on that, and we demonstrated what a prudent process looks like with different factors. But the key of it is that plan fiduciaries in selecting for the plan menu must objectively, thoroughly, and analytically, and we give them for the first time real examples on how to do that with different factors whether that's how to look at fees or how to look at valuation, or if there's liquidity issues, so we tried to arm plan fiduciaries so that they can confidently do their jobs to maximize risk adjusted returns for all of their workers.

Thank you for that. Uh, a stated goal of your recent proposal, uh, let me say this, it was to alleviate litigation risk associated with voluntary offering uh retirement plans to employee employees uh what other actions can EBSA take to help curb excessive ERISA litigation?

Thank you for highlighting it. We are very concerned and so is the President that excessive uh litigation abuse is stifling innovation and any time someone a plan does something new they get sued, even if it's a risk mitigation strategy. So what have we done? First, at the president's directive on our investment selection rule we re- reaffirmed that a risk is a law of process straight from the statutory text, in which plan fiduciaries have flexibility and discretion in choosing the investments and when they follow an objective thorough and analytical process, they should have deference and pr- be presumed innocent. The second thing we've we've done is we have filed a number of amicus briefs in cases where we think that the it needs to be reaffirmed to the judicial branch that they need to weed out the the sheep from the goats, and that's their job, only plausible claims should go forward, and we have we in cases like pension risk transfers which are specifically allowed under ERISA, we have reestablished and reaffirmed in these amicus briefs that ERISA is a law of process. Now by one of the briefs we were pro-participant in which the eleventh circuit

Well, that's great. Well, that's great, I appreciate your focus on the actual statute, I appreciate your focus on the actual statute, making sure that, making uh, sure that, uh, everybody is following it uh in full accordance with the law and so um I would just like to say again I I wanna thank the department for all their work uh that they've done thus far on on all these different initiatives uh when it comes to alternative investments we wanna make sure that uh everybody uh when they're investing in their retirement plans they are getting the best best return they can for the risk that they wanna assume uh making sure that they're still protected by their fiduciaries who are doing the investments on their behalf uh but again opening up up all the options for them I think is critically important. And uh when it comes to curbing excessive litigation, this is again about the employees, making sure that the benefits that they have earned for their retirement plans actually go to them as opposed to going to litigation costs and legal fees uh taking money away from the fund and away from those employees and their retirements uh I think is critically important. So I appreciate the focus again always on what is best for the employees and ultimately their retirement savings I think is the right focus and so I appreciate your work again. Thank you and I yield back.

Thank you.

I'd like now to recognize my friend from Connecticut, Mercedes.

Thank you. Good morning and thank you, Secretary Aronowitz, for testifying today. The Employee Benefit Security Administration, or EPSA, is critical to promoting the health and retirement security of more than one hundred and fifty-five million workers retirees and their families across the country. In your testimony, you state, One of the most important ways that EPSA protects American workers is the Benefits Advisors program. The EPSA Benefits Advisors based pro- based in the Regional Field Office in Boston are critical to assisting constituents in my hometown of Connecticut. These individuals answer questions to help workers navigate employee benefits plans and track complaints and violations that can lead to enforcement actions to insure employers comply with federal laws. The enforcement actions alone help EPS helped EPSA investigators recover more than five hundred thirty million dollars in health retirement and other benefits owed to workers last year. Despite the tremendous return on investment, the Trump administration is proposing to cut the EPSA budget by ten million in fiscal year twenty twenty seven, which would lead to a continued reduction in full-time staff. The proposed cuts are concerning, considering the number of full-time staff at EPSA, has already declined from over nine hundred and sixty full-time employees in two hundred two thousand fifteen to fewer than six hundred and ninety full-time employees today. The results show that their work is important. Does the administration plan to prioritize the outreach and compliance support that benefit advisors provide amid planned budget and staffing cuts?

Th- thank you for letting me correct the record. I agree with you, our bene- benefit advisor program helps all americans and you'll correctly cite how they helped americans last year, they helped with lifesaving medicines and claim denials, they're the front lines for ebsa in helping americans with healthcare denials or when retirement money is not put into the plans. we we just hired forty new benefit advisors, we had seventy-four, we just added forty and we're not done. we under my leadership we're gonna have more benefit advisors than ever, because it's a priority. When I look at EPSA, we do outreach, we do clear regulations, and we do enforcement. The number one thing we do is answer the phone with compassion when Americans need help and thank you for highlighting those amazing employees at EPSA.

Well, I must admit I wasn't expecting that for an answer. That is encouraging and I truly appreciate it because these roles are really important and I'll be watching to see um ensure that we're continuing to make progress in this area because it is so important. EPSA also has jurisdiction over many laws, including oversight of employer-sponsored health plans under the Affordable Care Act. It's my understanding that EPSA has previously sent benefits advisors into community to support outreach and education efforts. Can you explain what role benefits advisors are currently playing in helping participants navigate healthcare market changes following the expiration of tax credits and many of the perceived cuts uh that are looming to Medicaid?

Thank you.

Thank you. Thank you. Um. Um. Actually, you've eliminated my last question, which was do you plan to hire additional benefits advisors? So I appreciate the opportunity for you to clarify the record, but I hope that I can leave you with the fact that um for many of these retirees, the number one benefit that they are concerned about is their health care, and how to navigate the the landscape that we are in right now. So I I truly hope that these benefits advisors are educated in those area areas, and can provide the most complete uh proactive information because it is incredibly scary, as you've heard all of my colleagues down the line talk about when you have health issues and you're waiting for an answer or being denied a claim, so those things are really important.

Thank you for highlighting what our benefit advisers are doing. I've told the secretary multiple times that it's the most important thing done at the entire Department of Labor answering the phone with compassion to help Americans in their time of need.

Answering the phone.

Agreed. Thank you. Thank you.

Thank you. I'd like now to recognize my friend from Missouri, uh, Doctor Anders.

Uh, thank you, Mister Chairman. And thank you for being here today. Um, as a physician, I've witnessed firsthand the financial strain that unexpected medical bills place on patients. Uh, the No Surprises Act, which was enacted during President Trump's first term, banned the practice of surprise medical building billing, which is when patients unknowingly receive out of network care and are left with unexpected medical bills. Uh, while the law established penalties for providers who improperly balance bill patients, it did not establish parallel penalties for insurers or for that matter any other, um, penalty, um, for uh or any other um enforcement mechanism on the insurance side of the equation. And over the years, insurers have unfortunately abused this imbalance. Um Bloomberg reported last year that after the arbitration process set up by the No Surprises Act some insurance insurers would send an updated bill to patients, uh to make up the difference. Uh we've s- we've even seen insurers refuse to cover out of network uh services altogether such as childbirth anesthesia and neonatal resuscitation. Even though under the law, patients should only pay that what they would owe if the provider were in-network. Uh, so essentially the insurers are violating the No Surprises Act by passing out-of-network bills on to patients, and we need to have some sort of enforcement mechanism, some sort of penalties when this happens. And that is why my friend, uh, Doctor Murphy, uh, filed the No Surprises, uh, Act, Enforcement Act, uh, the f- House Resolution forty-seven ten, which applies the same penalties that would

Thank you for highlighting this important issue. Our benefit advisors have been flooded with

Mm. Mm. Yes. Right.

And and I just want to mention one of our enforcement national priorities that we just updated is to enforce the No Surprises Act, so I have the team on this to ferret this out,

Excellent.

but where we learn about problems on the front lines are the calls that we get. But we're getting thousands and thousands of calls a month. That's one of the we're hiring more benefit advisors we now have contractors specifically trained on this issue and we're seeing small doctors' offices that win in the arbitration and not get paid

yes

thousands of those calls a month we're trying to figure it out and so we're we try to learn from everything and so i ask our outreach head what are we learning and how can we do it better so we're all over this issue but it's a work in progress cause it's really complicated the other thing i wanna point out is that we're working on a final i. d. r. rule to fix some of fix some of this Can't talk about what's in it, cuz I can't prejudge.

Right.

But - but we know the problems. It's a mess, and I like to fix things. That's what I like to do.

Excellent.

So - so we're trying.

No, no, thank you for your commitment to this issue. Yes, um, providers, um, continue to complain that they are not being paid within the thirty day statutory time line, that's - that's an understatement, a dramatic understatement as you well know. Practices cannot go years waiting for payment. You know, and I would just say, even apart from this issue of Um, th- this is not just a matter of a physician standing up for fellow physicians. This is really a matter, this is another thing that is driving enormous consolidation in our healthcare system. When we drive small independent practices out of, out of business, uh, patients are driven to more expensive, uh, uh, care, um, uh, more expensive, uh, places of care. Um, does, um, i- i- i- i- i- i- i- i- in your opinion, does EPSA need additional enforcement authority for Congress, um, you know, such as monetary penalties for insuring non-compliance, um, or are there things you can do administratively or both?

So thank you for highlighting that issue. I make it a practice not to tell Congress what to do, but it is my job to use the tools that I have with our team to enforce the laws, as you execute. And so we are a hundred percent focused on, on on helping Americans that have balance billing and helping providers and working through those issues as efficiently as possible. So that's what we're working on. And if you give us more authority, we will use it to help Americans.

Well, thank you so much for your commitment to this important issue. I and I appreciate it and you I yield back.

Thank you. I do now recognize my friend from Pennsylvania, Miss Lee.

Thank you, Mr. Chairman. Uh, the Employee Benefit Security Administration exists to protect retirement and healthcare benefits. for millions of workers, retirees, and their families. Um, EPSA investigations have put billions of dollars back in people's pockets, and the agency pays for itself seven times over with the amount of money it recovers each year. But under your leadership, Mr. Ronowitz, um, EPSA has dramatically shifted its priorities towards protecting corporate interests and limiting access to justice for workers and their families. The Department of Labor is touting self-audit programs that allow companies to conduct oversights on themselves and DOL and MSI have filed uh amicus briefs in favor of companies like JP Morgan Chase uh Seisman and Honeywell International. So to be clear, you're using taxpayer dollars to advocate against workers on behalf of corporations, many of which don't even pay federal taxes themselves. But of course, none of this is surprising because in twenty twenty four, you did write in a blog post that uh quote, uh "the ERISA statute is a balance of the interests of plan participants and plan sponsors. With respect to bias, we are guilty as charged. We are advocates for America's benefit plan sponsors. And biases don't just disappear when you switch jobs. Your record as Assistant Secretary is consistent with that statement from twenty twenty four so Mister Aronowitz are you aware that under uh twenty nine United States Code section five fifty one um the purpose of the Department of Labor shall be to foster, promote and develop the welfare of the wage earners of the United States, to improve their working conditions? and to advance the opportunities for profitable employment.

Th- thank you for letting me address this and thank you for reading my blog post.

Just just really quickly, if you could just if you are aware of that um of that statue, that that is what it says,

Uh,

and that is what its intention is.

I'm aware of that statue, may I address the the concern if I'm biased for plan sponsors?

A- actually, yeah, I would like to know if you've overcome your biases for benefit plan sponsors.

In my job as an insurant fiduciary liability insurance company, I was allowed to have biases. As the assistant secretary of EPSA, I am executing the mission of the agency which is to protect the system. And it is a balance between uh in a voluntary system between plan sponsors voluntarily providing benefits and then helping plan participants. That's what we're doing. All of our amicus briefs are decisively pro-ERISA. We're not pro-plan sponsor and we're not pro-participant. We follow ERISA wherever it goes. We are the most pro-ERISA. uh, EPSA administration ever.

Okay. So, while we're on the subject of just putting corporate and private interests over workers and retirees, we can debate how you have approached your biases to overcome them. I would like to talk about some of your decisions instead around cryptocurrency. Uh, there is plenty of evidence on how risky it is to invest in crypto, uh, which is why DOL have previously issued guidance that caution fiduciaries to exercise extreme care uh prior to adding crypto to 401K plans.

Thank you for that question. We are not pushing crypto on Americans' retirement plans.

Mm-hmm. Mm-hmm. Mm-hmm.

The the prior guidance put the thumb on the scale, uh, it which was for which was uh it's basically saying that if you put this in your plan we will audit you. That is not the role of EBSA or the Department of Labor to pick winners and losers. What we did was put out a pro-ERRISTA that's faithful to the statute investment selection rule,

With or without regard to the riskiness of investing a

that they

of crypto being added to four O one K plans?

We absolutely put guidance so that plan fiduciaries can assess whether it's risky or not a- and and we put out guidance that says a plan fiduciary must objectively, thoroughly and analytically review, so if they wanna review crypto it needs to meet our rigorous test. And I don't even know if there's a current product that can meet our rigorous test. But the point is is it's not my job to pick winners and losers, it's not my job to say what should be in a plan, it's my job to put out thoughtful guidance that that that is true to the ERISA statute in which it's a process, and we put out a rigorous process for any plan fiduciary to review crypto currency.

Thank you. I do, I only have a couple more seconds. I just want to say that people stay in jobs they might not otherwise choose because they rely on their health care benefits. People work their entire lives to retire with dignity. Workers and retirees are entitled to support from the federal agencies their tax dollars pay. It is not EPSA's job to advocate on behalf of large corporations or protect Trump. I yield back.

The Gen- Oh, oh, excuse me, the General Lady yields and now I call on Mister Fein from Florida for his five minutes of questioning.

Thank you, Mister Chairman, and thank you for being here today, um, your answers have been great. I have a couple questions. I don't know if they'll be so s- so ridiculous, but we'll try to make them more useful. Mister Ronowitz, the, this committee has championed legislation to increase transparency in the healthcare market. Why do you think it's important for an employer to have access to the health data of its own plan, in order to design a plan that provides quality health care for lower costs.

Th- thank you for that question. Right now many mu- mu- much of the health care spend is in a black box, and the reason we wanna shine the light on PBMs and other other health care costs is to empower plan fiduciaries to get lower cost and better value for - for their plan participants that's how we help all American workers.

OK, great answer. Um, what are the limits on health care data transparency under currently? And how can we in Congress give employers the tools that they need to lower those costs?

Thank you for letting me answer that question. When - when - when I got to EPSA, what I saw was an EPSA that was primarily focused on retirement plans, like ninety percent. We changed that. And - and - and what we're trying to do i- is use the power of ERISA for the first time to hold health insurance companies accountable drive better value, and lower cost. That's what we're trying to do.

Well, your passion is obvious. And, and, Again, I I appreciate it. Um, I wanna change topics to a bill of mine. So, um, Mister Aronowitz, I introduced HR sixty eighty-four, the ERISA Litigation Reform Act, to deal with this sort of spate of frivolous litigation, which enriches lawyers and not the beneficiaries of these plans. It clarifies the burden of proof in certain fiduciary related claims. It establishes a targeted stay of discovery during the early stages of litigation. Last year the Supreme Court interpreted ERISA to permit any claim brought in

The motion dismissed is the whole ball game. If the plaintiff lawyers get passed the motion to dismiss, they've won because they can leverage a settlement because it costs millions of dollars to defend a case even even if it's frivolous. I would point out to you that there's been about eight trials over the last five years,

Mm.

and, and, plan sponsors have won seven out of the eight trials. And why is that? Because many of these cases are against plans that have an excellent fiduciary process, and judges are allowing cases to go forward. But once they see the evidence, they see many of these plan sponsors have an excellent fiduciary process. And then they're vindicated, but it costs millions of dollars to vindicate yourself. And that's why we're losing in stifling innovation, where plan sponsors are gonna keep asking, how do I keep from getting sued, as opposed to thinking what isn't the best,

And and loo- losing a motion to dismiss doesn't mean that you're wrong. The motion to dismiss is sort of the lowest level of of uh, you know, of litigation.

Well, it's the first gate,

But

but but that gate that you go through is supposed to separate the sheep's so the sheep from the from the goats, and that's not happening, and and and and that's that's the problem because courts are supposed to do their job and and remove frivolous cases from the system. And if you add

So, I don't know how familiar you are with my bill, H R sixty eighty four, but do you think it would close, if you do, do you think it would close the loophole for service provider contracts and employer stock ownership plans?

We gave technical assistance on, on your bill. Uh, uh, it's not my job to comment publicly on your legislation,

Okay.

but I'm for anything that allows plan sponsors to do their jobs,

So my bill also strengthens pleading standards for lawsuits brought under ERISA. Frivolous class action lawsuits, they put quick payouts against truly meritorious cases. That's what you're talking about. What's the difference between a frivolous class action lawsuit and those seeking redress for real harm? I mean, are there examples where people really do deserve to be sued?

I can give you examples of a sheep from the goat in meritless cases versus case that merit. There was a case against a major

And that would have survived the motion to dismiss, and they probably would have won in the end.

In the summary judgment, the court said that they had their hand in the cookie jar. That is a case that has potential merit. You still have to prove causation, but many of the cases that are using circumstantial evidence of outcomes that the that that the plaintiff lawyers don't like and trust me these are these are plaintiff lawyer generated cases not participant cases in which they're using disfavored outcomes to to then bootstrap a- and ask the court to infer a a bad fiduciary process well those are the ones that lack merit because

Thank you.

you in under RISA you need to show that that that that it's a uh that it's a process-based defect.

Thank you, Mr. Chairman.

Uh the gentleman yields and now I call on uh Mr. DeConto from California for your five minutes of questions.

Uh, thank you, Chairman Allen. Uh, Mister Ronowitz, um, you have stated that, uh, that your last organization, uh, that w- your employee was a, quote, advocate for America's benefit pensions, plan sponsors, uh, benefit, excuse me, benefit plan sponsors, unquote. Uh, would you characterize your former company's primary clients as America's, uh, benefit plan sponsors or American workers?

Uh, I insured benefit

Benefits plan, uh benefit plans. I I I understand, sir. Uh the administration has highlighted your dedicated, your decades of commitment uh as a quote unquote advocate for sponsors of employee benefit plans, uh end quote, not employees. Uh, Mr. Ronowitz, you oversee benefit plans covering a hundred and fifty five million people, uh and despite your past role, are you committed to fulfilling the department's charter of protecting

Uh, I absolutely am committed to to the mission uh of the Department of Labor and the mission which is of the Employee Benefit Security Administration, which is protecting the retirement and health systems in America, ensuring the security of the system, and I'm doing that. I'm the most prepared abscess assistant secretary ever to do that.

A- and is the wage earner your uh as a focus?

W- we are, in the Trump administration, we are American worker first. Everything we do is for the American worker.

OK. Thank you. Thank you. Thank you, sir. It seems as though you have, but it does seem as though you have more experience protecting corporations and people. So let's move on. Uh, let's take a look at what's happening at the Department of of of Labor. Uh, Mister Ronitz, you're aware that the Department of Labor's Inspector General is investigating, uh, are you aware that the Department of Labor's Inspector General is investigating the labor secretary for professional misconduct, including drinking on the job?

Uh, I don't read any of the tabloid accounts. The secretary of labor I know.

Uh, we're talking about, we're talking about the New York Times as a tabloid?

Well, I didn't even know, I don't read the New York Times.

You are high, you know, kind of fairly high level, a lawyer experience. It's like uh hard to believe that a uh that an assistant secretary uh would not be reading the New York Times. But anyway, let's go on. Uh, Mr. Ronowitz, are you aware of reports that several members of the secretary's staff have been fired, forced to resign, or placed on administrative leave because they used tax part dollars to fund the secretary's personal travel?

I'm aware of some discussion, but

So you are aware, thank you. Um, Mr. Ronowitz, have you read the reports that have you read

No, I'm not aware. The the secretary I know is dedicated.

So you're not aware, Mister Aronowitz, thank you, um uh, Mister Chairman, I uh uh wish to enter into uh the record uh investigative report about these complaints um of the three uh with the three women involved. Yeah, I actually know there's consent for that to be on a bunch of record. Uh, Mister Aronowitz, uh, how are you protecting your staff after the secretary's husband reportedly was banned from the department's headquarters when at least two staff members accused him of making unwanted sexual advances?

I don't know anything about that other than my job

So you're not protecting your staff?

uh w- my

You're not you're not you're not uh not to put into place any plans to protect your staff?

My my staff is has our heads down and focused on

Mister Secretary, the question was whether or not you're taking any steps to protect your

I am a good leader.

So I I take it no. Is that the answer?

No, the answer's not no. I

You have not have you put plans in place, Mr. Secretary?

Mm, I am a leader with decades of experience.

The secretary is not responsive.

All my

I take the answer to be no, you have not put any plans in to protect your staff.

All my employees are protected.

Mr. Secretary, do you have any do you have confidence in the leadership of Secretary uh Chavez de Remmer?

Yes, I do.

You do, thank you.

I do.

My Republican colleagues were very interested in the secretary's predecessor during her scandal-free term where she fought fiercely for the American people and American workers. However, Republicans have been silent on the chaos, dysfunction and potential fraud being perpetrated by the current secretary. Um, and occurring and and and apparently the indifference of the assistant secretary. Uh, American workers deserve a department of labor that is focused on

The gentleman yields. Now I call on Mister Mannion from New York for your five minutes of questioning.

Thank you, Mister Chair. Uh, thank you, Assistant Secretary. I appreciate you being here today and addressing our questions and concerns. As we all know, the work of the Employee Benefit Security Administration is wide-ranging and critical. EBSA oversees the retirement and health plans of over a hundred and fifty-five million Americans, and carries out essential investigative, educational, and enforcement activities. Workers and retirees across the country expect the agency to protect their hard-earned benefits, and diligently respond to all cases of plan mismanagement. With that in mind, I want to echo the concerns of some of my colleagues, uh, that they have raised about EPSIS capacity. The agency has been under considerable strain for a long time, and Just over the last year, the majority of this committee has taken issue with the length of EBSA investigations. Um, we are concerned, uh, certainly, that as the budget request is proposed, there are fewer resources for the agency and therefore potentially less personnel to carry out these important responsibilities moving forward. Beyond the budget, um, Mister Secretary, I want to ask you about the recent changes to EBSA's national projects and priorities. From your testimony, I understand that EBSA has removed terminated vested participant searches from its list of priorities. What we're talking about here are folks that are entitled to a pension or have accrued retirement savings but maybe they switched jobs a couple times and lost track of their four O one K um that they had with a former employer. Plan sponsors often have a tough time locating these folks who are sometimes referred to as missing participants. Thanks to the leadership of the members of this committee, including Ranking Member Scott and Congresswoman Bonamici, there was a provision in the bipartisan secure two point O legislation that established a retirement savings lost and found database at the Department of Labor. The database is intended to help missing participants find and recover their lost retirement savings. So, Mister Assistant Secretary, did the existence of the

Thank you for the ability to address that and and then correct the record somewhat.

Mm.

The reason I made changes is I saw fifty percent of EBSA's enforcement was on a single issue. We absolutely care about missing participants, but I need to use our resources strategically, so I moved that to health care and to and to vindicate health care benefits to the health care department. and rights uh and I challenge the team to find a technological solution to find missing participants and so we're coming up with a way that will find more missing participants than ever using technology and the lost and found database is working it's not perfect we found certain issues including the way uh and how you log in with with some government issues we are all over it and trying to make sure that it's maximum effectiveness but we're trying to have a parallel for plan sponsors to give their data so we can find more missing

Thank you. Thank you. You mentioned fifty percent of the resources were focused on one certain type of activity. You mentioned fifty percent of the resources were focused on one certain type of activity what what was that activity, What what was that activity and why was it so onerous on on um the agency? and why was it so onerous on on um the agency?

the the the ebb set team to come up with a a tech technological way to do that work in a more efficient way that's not burdensome to plan sponsors but also finds more missing participants freeing up all that investigatory resource to go to vindicating healthcare claims.

Are they working on that technological fix and is there anything we can do as a legislative body to be of assistance?

Well, I need to consider that but there we are absolutely it's front and center, we have a task force.

The gentleman yields and now a call on um Mister Scott,

Mr. Scott.

our Ranking Ch- uh Chairman, for his five minutes of questioning.

Thank you, but thank you, Mister Chairman. Um And I'd like to ask questions about um follow-up on claim denials. Um And you mentioned you wanted plans or denying claims, you wanna hold them accountable, is that right?

Yes.

OK, um if um you're aware of the responsibility of plans to have a provision that allows consumers

I'm very aware.

OK, and the Affordable Care Act says they also have to have an external review process.

I am aware.

OK. Now if a group he- group plan or health insurer violates either of these provisions, uh what kind of fine or civil monetary penalty does the law allow you to impose?

We have very limited ability under what we currently have, but we use

OK, well that's a lot of words, but I didn't see anything you could actually do to somebody for violating the law.

Well, we we are absolutely vindicating healthcare rights a- and and we're using all of our power under ERISA, which has never been

OK, well what I asked you was what power do you have?

Well, I have the power of ERISA, the greatest in in in employee benefit history.

OK, I'm not hearing anything that you could do. If they, if the plan, you're familiar with mental health parity, the requirement that mental health be covered like all other health plans, by problems. Um, you're familiar with that, if an insurer doesn't have mental health parity, what uh monetary penalty can you impose?

I can only do what's under the law, and I'm very limited as you're indicating.

OK, and if um a plan refuses to cover pre-existing conditions, which you know is they can't do that, uh what can you do about it?

We use the power of ARISID and we're going after more service providers under the tools we have to to in

I didn't hear what tools you have.

Yeah.

The tools I have are under disclosure rules a and uh under under

If a plan refuses, if a plan refuses to cover

And part seven.

a condition, a pre-existing condition, and a patient dies, what happened? What's the recourse?

Well, let me be clear, w- we can't tell plan sponsors what to cover and what not to cover, but what we can

You can't, you can tell them they gotta cover pre-existing conditions.

W- but but what we can is enforce the law, and we do have different tools, and mental health parity is one of those, one of if there are are is not parity between the pre-existing conditions of medical medical surgical to mental health but we're using everything we have at our disposal

yeah but i didn't hear you say anything you had at your disposal

well i'm telling you that i have the power of erisa in different parts of the statute and i'm using everything i have to

well if what uh what recourse would a participant have if a family member dies because they didn't want

Well, that that's obviously problematic, but we try to we take calls.

Problematic, ok, well let me ask another let me ask another question on the fiduciary rule. What is the um present status of a of a um whether or not there's a fiduciary duty to participants under the plan?

i wanna make sure i understand but we withdrew the two thousand twenty-four fiduciary rule and restored the five part test because that is what congress wants us to do you give us authority over employee benefit plans and the sec and state insurance commissioners will do their job of enforcing iras and and annuity

you is there a fiduciary duty on the behalf of advisors when they give uh advice to plans is there a fiduciary standard

if they're giving advice to the plan there absolutely then they would be fiduciaries and they have to they have the highest duty known to law

ok and does the plan have a fiduciary duty to the participants

yes they do

ok uh you mentioned risk adjusted returns um well i'm running out of time you're back

Um, all right. Uh, the gentleman has yielded, uh, a vote has been called in the house. Pursue it to previous the previous order. The chair declares the commit committee in recess, subject to the call of the chair, will plan to reconvene promptly ten af ten minutes after the last votes have been called in the series. Uh, the committee stands in recess.

Oh, almost.

This is funny.

Okay, uh the subcommittee will reconvene, and now I call on Mister Tsanye for your five minutes of questioning.

Thank you, Mister Chairman, and um to the witness uh, Mister Secretary, thank you first of all for um being for- so forthright about your personal um family situation. I appreciate it. I've had a similar uh situation when it comes to behavioral health with my father. And uh I didn't want And and thank you. Um,

Um.

so I wanna ask these questions in the context that we talk about this a lot in this committee and for us to have the kind of relationship that I hope for is that we can have um very legitimate political differences, but in this instance, where, I say this all the time, we've got the most expensive health care system in the world for developed countries with the poorest outcomes. And there's so many inefficiencies in this. Chairman Allen and I have talked about this a lot, about whether it's PBMs or claim to dials, um, we're not serving Americans' health. And in this part of, um, our health care delivery system, as a former employer, uh, employers uh who are responsible for contributing and want their employees to get value, it seems like a a a simple thing to say we should really be collectively pushing for better outcomes for our investment. And this is your job is a key part of that. So if you can get better results with lower costs, um I'm all for that. If we have more efficient regulation that's less lawsuits. So there is a relationship there of y- your job making sure that people adhere to their contractual obligations as health clans and you have a long history in this and you've studied it um i loved your line about problematic um only delivered in a way that a really analytical person could say um about situation where somebody having a claim denied and that part's not funny that somebody died because they should have had the healthcare that they paid for so in that regard let's go right to claim denials. you've already recove- uh covered. Um, your predecessor told us that we had one inspector uh to respond to every fourteen thousand uh covered health retirement and other benefit plans. Well, to the analogy of a police officer, um, how do we get the bad performers? So we know that, for instance, in my research, uh, United Healthcare was one that was really a bad performer in denying claims that traditionally were approved and people don't have the resources to get an attorney and fight So, how do we make this more efficient in the sense that people are following the laws with the least amount of lawsuits or enforcement as possible and you got to this a little bit just prior to my questioning on technology, and I'll be honest with you, as a member of the Bay Area delegation, I'm, I've been burned by t- the technology. It's gonna ca- solve everything. We, we know that it doesn't. It can be a really good tool. So, just sticking with it overall metric but when it comes to denial of claims and what you've already said could you add to that in the context of uh the tone of my question particularly that technology may be helpful and lastly that you're going to cut staff in your budget proposal in the context of what I just told you about only one a federal employee to respond to fourteen thousand plans so I'm all in I I believe that you wanna make it more efficient including delivery of services and quality of care But how are you gonna do that? And I will just say, you're gonna be back in front of this committee in this Congress and in the next. Um, so I'm gonna hold this to you months from now, uh, in terms of asking you, well, how did that work? Did we get some performance standards improved?

Thank you for the opportunity to address that. We're trying to think strategically how can with the resource, even if you gave me a thousand more investigators, I'm still not gonna have enough. if you're looking at number of of of plans or participants to number of investigators. So we have to be strategic. And so we've asked our investigators and our head of investigations, Colleen McKee, is going after more service providers and health care companies because they they represent thousands of plans and then millions of participants. We had a recent settlement with a major company and we helped millions of participants. So we're trying to be more strategic with with the resources we have.

And this

i cannot wait to show you what we're going to do to break down barriers to

uh

mental health and what we do on mental health parity just give me a chance I I need more time.

Okay, I yield back. Right.

The gentleman yields now a call on Mister Grothman for his five minutes of questioning.

Mike.

Right, oh I gotta ask you some other questions, but I don't wanna be done until I to ask about mental health parity. Um, Mister Arnoetz, I introduced uh HR seventy three sixty two, the form fifty five hundred filing simplific simplification act to simple annual reporting requirements for employee benefit plans. No one has form fifty five hundred. I used to do taxes. They're a pain in the butt. Fifty five hundred's a horrible form. Currently, plans must request extensions to receive an extra two and a half months to file their automatic their annual returns. This legislation would eliminate that requirement by a- automatically extending the filing deadline. The legislation also specifically allows for electronic signatures on the report and the schedules that are included would this legislation provide relief for employers and eliminate red tape

it's not my job to comment publicly on on legislation but we are pleased to give technical assistance on that I would also tell you we have a task force on looking at the form fifty five hundred which has not been modernized in decades

great uh thank you for your response i'd like to enter into the record letters of support for

Uh, without objection.

Now my my final uh question i- or I got one more question, two questions. My final question is as you know, health care costs continue to rise and provider consolidation is one of the main drivers. Perverse economic incentives have driven hospitals to acquire provider

Mm. we intend to use our enforcement authority to investigate all types of of improper denials or or improper treatment and not not standing up to the promised benefits on the

Mm.

Okay, now you talked about mental health parity. And mental health is very controversial. I just had my own little subcommittee, we had a hearing, it seems like the mental health profession is out of control, with people over-drugging kids, uh, just shockingly over-drugging them, putting them on, uh, drugs that are addicting, that they might be on for twenty years, and even tell the kids they are addicting when they put them on. It seems to me in a free country that if I've got a business I shouldn't be forced to pay for a profession that at least I believe is out of control. Uh, will you help provide us with information or something and see whether it, whether we should continue on this path of forcing individuals or forcing, um, uh, companies, anybody to pay for these mental health benefits if we feel the mental health profession is a little bit out of control, over-medicating, and quite frankly excessively liberal.

The beauty of the voluntary benefit system is all plan sponsors have a choice. I do want them to pro- provide quality mental health benefits. But if there's anything EPSA can do to educate employers on how to make good decisions, then we will try to figure out what to do.

What if I've got a, what if I'm an employer and I just don't think much of these people? I'd rather have people go to their priest or read a book or something else or

Employers, employers have the right

go for a hike.

not to provide benefits.

Good.

I do hope though that they provide quality benefits for patients that want them.

OK. Um, how about um the federal government, like on Medicaid and stuff? Should they have to should should my tax dollars have to go to people? Or should we put limits on these mental health benefits, particularly after we have all this evidence that these mental health professionals are over-prescribing drugs to young people? and old people too, for that matter.

I don't have an opinion on that, but I am a believer that there are quality mental health benefits for American workers and and and and and so I I don't know enough about what you're talking about.

OK, well you should familiarize yourself, I'll try to get you some books or something on the topic, uh, and we have a little more respect for the idea that maybe mental health professionals are, are not all they're cracked up to be, and sometimes they wind up putting very young people in a position in which they are,

Uh, this gentleman yields, thank you, and uh now I'd uh like to recognize the ranking member for his closing remarks.

Uh, thank you, Mister uh, Mister Chairman, and uh thank you, Assistant Secretary, I've appreciated the hearing. Um, and as I said, well I look forward to working together for you, we could really do a lot of good work for the american public and i will say this too as a both a policy maker for many years at every every level of government um business owner but also a consumer having been a survivor of stage four cancer and a a month in a icu um and my primary care doctor who is a good friend tells me i'm not supposed to be here so i appreciate um both my good fortune but also the the dickens aspect of our healthcare system what it which in many ways is the and in a lot of ways the very worst. Trying to negotiate the health care system, um, even with a lot of resources, is a challenge for people and it's so inefficient. So I look forward, very much forward to working with you and the chairman to see if we can change that situation. Um, and as you know, Americans are struggling to afford everything from groceries to gas, health, health care is the number one uh reason why individual Americans declare bankruptcy. Uh, so we've gotta stop that. The crisis under this administration, um, has become so urgent that Americans are tapping into their retirement savings at an increased rate, and resorting to selling their plasma, as I said in my opening. So those kind of situations I very much look forward to changing, uh, knowing that you work in this administration. That doesn't mean we can't work together, particularly in this type of instance. So, with that, um, not - not to be redundant, but just closing on, we're going to continue this conversation, and it's my hope uh that our relationship goes forward, we can collectively look at some real positive outcomes, so that that person who was denied, that was mentioned by one of my colleagues, um under a pre-existing condition who ended up dying, that we will eliminate those kind of situations, so that that person can have the benefit that I have, that I can sit here and say, I'm not supposed to be alive, but I'm here, because people work to make the system work better for individual Americans and their families. I look forward to working with you and your team so that we can have that legacy. Thank you, Mr. Chairman. Hey, you're back.

I thank the ranking member. Uh, without objection, I will enter in the record statements from the employee-owned S Corporations of America, the ESOP Association, and the ERISA Industry Committee. Uh, Mr. Secretary, thank you again uh for your testimony. Uh, this committee remains committed to ensuring that health and retirement benefits actually for American families. Americans work hard to save for retirement and they deserve peace of mind that their savings are being managed with maximum performance in mind and not politics. Health care costs continue to rise and it's time that we, as a as a ranking member said, it's time we shed a light on hidden and deceptive pricing with real transparency that promotes competition and brings down costs for American families. As I said in my opening uh questioning, Uh, we have to have competition in health care. And the best way I know to do that is give ERISA and and also self-employed folks the opportunity to go and self-insure and um and and give them a waiver from the uh compliance requirements of the Affordable Care Act. Um, employers need access to health care data to allow them to design cost-effective high-quality health plans. Another driver of health care costs is provider consolidation, and economic incentives. They've driven hospitals to acquire provider offices and bill incorrectly for services obviously you know we are doing everything we can to deal with waste. In fact, the Vice President is in charge of that, I understand, and deal with waste, fraud, and abuse. This committee has championed legislation, increased transparency, and give employers the tools they need to lower costs. We will continue our work to cut red tape and expand access to more choices and better options for food. families and retirees. Simply put, we are working to put the American workers at the center of the system and ensure they have access uh to the benefits they deserve. Again, thank you, Mister Secretary, uh for taking the time to testify before this subcommittee today. Without objection, there being no further business, the subcommittee stands adjourned.