From Yuppies to Guppies : Unfunded Mandates and Benefit Plan Regulation

This article considers the debate and literature on unfunded federal mandates in the context of federal health care and pension regulation. The debate over mandated coverage, especially in health care coverage, has more in common with the unfunded mandates literature than just the use of the term "mandate" -- a term now widely viewed as a pejorative. On the theoretical level, the article considers whether the unfunded mandates literature can explain the dichotomy between the widespread use of plan content regulation and the consistent defeat of plan sponsorship legislation. On the political level, it asks whether requiring increased attention to the incremental costs associated with proposed regulation would increase the stability, cohesiveness, and long-range policy objectives of the regulation of health care and pension plans. The article argues that, though such analysis might appear to offer some superficial advantages, it actually would pose a significant threat to the normative quality of legislation. The article then identifies three categories of important policy criteria that should govern legislative debate on these issues and shows that the narrow consideration of incremental costs may divert attention from those criteria