by Admin. | Mar 24, 2017 | Obamacare, PPACA
Trump’s First Legislative Effort Fails as G.O.P. Pulls Bill to Repeal Obamacare
THE NEW YORK TIMES
By ROBERT PEAR, JULIE HIRSCHFELD DAVIS, JENNIFER STEINHAUER and THOMAS KAPLAN
MARCH 24, 2017
WASHINGTON — House Republican leaders, facing a revolt among conservatives and moderates in their ranks, pulled legislation to repeal the Affordable Care Act from consideration on the House floor Friday afternoon in a humiliating defeat for President Trump on the first legislative showdown of his presidency.
Paul D. Ryan, the House speaker, rushed to the White House shortly after noon to tell Mr. Trump he did not have the votes for a repeal bill that had been promised for seven years — since the day President Barack Obama signed his landmark health care act into law.
Mr. Trump, in a telephone interview moments after the bill was pulled, blamed Democrats and predicted that they would seek a deal within a year after, he asserted, “Obamacare explodes” because of higher premiums. The president said he did not fault Mr. Ryan and said that he was pleased to move past his first legislative fight. He maintained that he was merely going along with the House bill.
But the effort to win passage was hardly kept secret. Vice President Mike Pence and Tom Price, the health secretary, rushed to Capitol Hill for a late appeal to House conservatives, but their pleas fell on deaf ears.
“You can’t pretend and say this is a win for us,” said Representative Mark Walker, Republican of North Carolina, who conceded it was a “good moment” for Democrats.
“Probably that champagne that wasn’t popped back in November may be utilized this evening,” he said.
At 3:30 p.m., Mr. Ryan called Republicans into a closed-door meeting to deliver the news that the bill would be pulled, with no plans to try again. The meeting lasted five minutes.
“We’re going to go home and spend time with our families and time with our constituents, and one day I hope we can eventually repeal,” said Representative Chuck Fleischmann, Republican of Tennessee.
The Republican bill would have replaced the Affordable Care Act, known informally as Obamacare, which mandated that almost everyone have health insurance, with a system of age-based tax credits to purchase health insurance plans.
But it never won over conservatives who wanted a far more thorough eradication of the Affordable Care Act. Nor did it have the backing of more moderate Republicans who were anxiously aware of the Congressional Budget Office’s assessment that the bill would leave 24 million more Americans without insurance.
With the House’s most hard-line conservatives holding fast against it, the bill’s support collapsed Friday after more rank-and-file Republicans came out in opposition, including Representatives Rodney Frelinghuysen of New Jersey, the soft-spoken chairman of the House Appropriations Committee, and Barbara Comstock of Virginia, whose suburban Washington district went handily for the Democrat nominee, Hillary Clinton, in November.
“Seven years after enactment of Obamacare, I wanted to support legislation that made positive changes to rescue health care in America,” Mr. Frelinghuysen wrote in a statement. “Unfortunately, the legislation before the House today is currently unacceptable as it would place significant new costs and barriers to care on my constituents in New Jersey.”
In the end, Republican leaders doomed the bill by agreeing to eliminate federal standards for the minimum benefits that must be provided by certain health insurance policies.
“This provision is so cartoonishly malicious that I can picture someone twirling their mustache as they drafted it in their secret capitol lair last night,” said Representative Jim McGovern, Democrat of Massachusetts. “This backroom deal will kill the requirement for insurance companies to offer essential health benefits such as emergency services, maternity care, mental health care, substance addiction treatment, pediatric services, prescription drugs and many other basic essential services.”
Defeat of the bill could be a catalyst if it forces Republicans and Democrats to work together to improve the Affordable Care Act, which virtually every member of Congress believes needs repair. Democrats have been saying for weeks that they want to work with Republicans on such changes, but first, they said, Republicans had to abandon their drive to repeal the law.
President Trump, through his budget director, Mick Mulvaney, told House Republicans on Thursday night that he was giving them this one chance to repeal the Affordable Care Act. If they failed, Mr. Mulvaney told them, the president would live with his predecessor’s law.
Rejection of the repeal bill may also prompt Republicans to reconsider the political strategy they were planning to use for the next few years.
“We have to do some soul-searching internally to determine whether or not we are even capable of functioning as a governing body,” said Representative Kevin Cramer, Republican of North Dakota. “If ‘no’ is your goal, it’s the easiest goal in the world to reach.”
Representative Robert Pittenger, Republican of North Carolina, offered this advice to hardline conservatives who helped sink the bill: “Follow the example of Ronald Reagan. He was a master, he built consensus. He would say, ‘I’ll take 80 percent and come back for the other 20 percent later.’”
Failure of the House effort leaves the Affordable Care Act in place, with all the features Republicans detest.
The Republican bill would have repealed tax penalties for people who go without health insurance, rolled back federal insurance standards, reduced subsidies for the purchase of private insurance and set new limits on spending for Medicaid, the federal-state program for more than 70 million low-income people. The bill would also have repealed taxes imposed by the Affordable Care Act on health insurance providers, manufacturers of prescription drugs and medical devices, and many high-income people.
The bill would also have cut off federal funds to Planned Parenthood for one year.
Mr. Ryan said the bill included “huge conservative wins.” But those provisions were ultimately not enough.
by Admin. | Mar 9, 2017 | Health Care Reform, Obamacare, Small Business Group Health, Tax
Don’t Tax My Workplace Health Plan
ISSUE SUMMARY
Don’t Tax My Workplace Health Plan. Congress is currently considering healthcare reform proposals that would eliminate or place a cap on the employer-tax exclusion for health insurance. These proposals would undermine the employer-sponsored health insurance system that provides coverage for more than 175 million Americans. Eliminating the exclusion would eliminate most of the advantages of employer-sponsored insurance, while capping it would degrade the benefit and serve as a tax increase for middle-class Americans.
Lets highlight one particular issue of concern to most of our clients. Today, employers may deduct as a valid business expense the full cost of health insurance and other employee benefits. One of the considerations being discussed would restrict this tax-advantaged status.
The infographic paints a picture of the importance of job-based health insurance and how valuable it is for employers as well as for American workers and their families.
Impact on American Workers
- A study by the City University of New York School of Public Health found that the “Cadillac Tax” will hit the middle class the hardest.
- A study by the Economic Policy Institute found that because the tax is focused on high premiums, not high levels of coverage, companies that tend to pay higher premiums — such as small businesses and employers with a high proportion of sick workers — could wind up paying the tax even though their benefits are not particularly generous. Also, if employers try to avoid the tax by shifting to less generous plans, workers will likely suffer when it comes to their overall compensation, even if they get a boost in wages to make up for the lost health benefits.
- The tax will disproportionately affect women, older employees and certain geographic areas. A 2014 report by actuarial and benefits consulting firm Millimani dentified that geography could potentially account for a 69.3% variation in premium. For example, a plan that would cost $9,189 in one area would cost $15,556 elsewhere. The report also demonstrates that the 40% tax’s age and gender adjustment fails to compensate for the impact those factors have on premiums when combined with a high-cost geographic area and/or lower provider discounts.
- According to a 2014 study by Truven Health Analytics, the 40% tax will result in a cost increase of up to $480 per employee per year for plans that are expected to incur the tax. Early retirees are projected to incur the tax at a much higher rate than active employees, with 81% of such plans likely to trigger the tax.
- A study by the American Health Policy Institute estimated the 40% tax “could cost 12.1 million employees an average of $1,050 in higher payroll and income taxes per year, if employers increase their taxable wages as they reduce the cost of health care benefits. Alternatively, these employees could see up to a $6,150 reduction in their health care benefits and little or no increase in their pay.”
Impact on Employers
- An issue brief by the Kaiser Family Foundation found that “a meaningful percentage of employers would need to make changes in their health benefits” to avoid the 40% tax, and this percentage grows significantly over time unless employers are able to keep heath plan cost increases at low levels. In fact, 19 percent of employers already in 2015 have a plan that would exceed the threshold when flexible spending accounts are included in the calculation. These firms would need to reduce their current plan costs over the next several years to avoid the tax. By 2028, 42% of employers would have plans where costs would exceed the threshold for some or all employees. And if health plan premiums continue to grow faster than inflation, as expected, all employers will eventually be affected by the tax.
- According to Tower-Watson survey48% of employers believe the plans they provide will be affected the first year the law is implemented. And that rises to 82% of employers by 2023, just five years later.
- The Lockton Companies wrote in a 2015 benefits guidance document, “When we project five and ten years into the future, based on current guidance, the majority of our clients will eventually trigger the tax.”
- Eventually, the 40% tax will apply to modest plans, not just high-cost coverage as intended. A recent study by actuarial and benefits consulting firm Mercer, found that the Federal Employees Health Benefits Program’s (FEHBP) Blue Cross Blue Shield standard option plan was projected to hit the 40% tax soon after it was originally set to go into effect.
- A study by the American Bankers Association’s HSA Council found that “If your current HSA-qualified family health plan costs more than $17,000, including wellness programs, your firm is likely to incur excise tax liability in 2018 if anyone makes a maximum contribution.”
Impact on Health Benefits
- The actuarial and benefits consulting firm Aon Hewitt reported in 2015 that 33% of employers surveyed are increasing deductibles and other cost-sharing, to avoid being on a trajectory to trigger the tax when it goes into effect. But fully 40% of employers expect at least one plan to unavoidably hit the tax threshold regardless.
- A survey conducted by the National Business Group on Health found that 42% of employers said they will increase employee cost-sharing, and 37% said they will reduce spousal subsidies or implement a surcharge for covering them to minimize the impact of the excise tax.
- A survey of 700 employers by Mercer in 2015 found that anticipation of the 40% tax is already leading many employers to consider excluding employees’ spouses from their health policies or imposing a surcharge for including them. The survey found that the tax has consistently been the primary concern of employers since passage of the Affordable Care Act.
- The 40% tax is triggered when the value of an individual’s health plan exceeds the threshold — a supposedly high-end number for “Cadillac” plans. But a 2013 Mercer survey found that the average price of all employer-provided health plans in the state of Florida, for example, was already approaching the threshold — years before the tax is set to go into effect.
Because its thresholds are indexed to general inflation instead of faster-growing medical inflation, more plans will be hit by the tax every year. The tax thresholds are indexed to the Consumer Price Index, which the Congressional Budget Office (CBO) estimates will rise annually by 2.4% on average over the next decade. But the Centers for Medicare and Medicaid Services (CMS) projects private health care spending to rise 5.8% on average each year, as health care costs increase significantly faster than general inflation. This insufficient indexing of the thresholds means more and more plans will trigger the tax, and to a greater extent, over time.
Take Action Today:
- Tell Congress to Oppose Eliminating or Capping the Employer Exclusion – click here
- Join Fight the Cadillac Tax – click here.
Contact Us Now Learn how our Agency is helping buinsesses thrive in today’s economy. Please contact us at info@medicalsolutionscorp.com or (855)667-4621.
by Admin. | Feb 15, 2017 | Health Care Reform, Obamacare, PPACA, State Exchanges
Leading article on the direction of TRUMPCARE we’ve read thus far. Former president Barack Obama’s budget director, Peter Orszak thinks Obamacare will be replaced through the waiver process.
Here’s How Trump Will Change Obamacare
By Peter R. Orszag FEB 14, 2017 6:00 AM EST
Promises made by Donald Trump and Republicans in Congress to repeal and replace the Affordable Care Act are proving to be more complicated than they sounded on the campaign trail. With reality now setting in, what’s most likely to happen?
I expect to see Republicans stage a dramatic early vote to repeal, with legislation that includes only very modest steps toward replacement — and leave most of the work for later. Next, the new administration will aggressively issue waivers allowing states to experiment with different approaches, including changes to Medicaid and private insurance rules. At some point, then, the administration will declare that these state experiments have been so successful, Obamacare no longer exists.
In other words, the repeal vote will be just for show; the waivers will do most of the heavy lifting.
I predict something like this will happen because of two core challenges that stand in the way of Republicans’ replacing the ACA through legislation: the need for so-called community rating and the need to have 60 votes in the Senate to pass a comprehensive new health-care law.
First, community rating. It is one of the basic building blocks needed to create a workable private insurance market — whether Democrats or Republicans are doing the building. If your insurance covers a pre-existing condition but at a cost of, say, $100,000, that doesn’t really help. Community rating requires that your premium be the same as that of other people in your area, no matter how unhealthy you are.
With community rating in place, the next step is to recognize how easy it is to game the system: People can just wait until they get sick, then buy insurance at the community rate. To discourage that practice, the system needs to give people some strong incentive to purchase insurance before they get sick. The Affordable Care Act used an individual mandate; most Republican plans instead propose a requirement for continuous coverage. That is, people enjoy access to community-rated premiums in the future only if they have kept themselves insured over some period of time in the past.
Given the costs involved, subsidies are also needed to ensure that low- and moderate-income households can afford the coverage. This overall structure means that younger, healthier people implicitly subsidize older, sicker people.
Such are the inescapable constraints imposed by community rating. Community rating could be discarded, as Mark Pauly of the University of Pennsylvania has argued. Pauly instead proposes that insurance companies be allowed to vary people’s premiums according to their health status, and that general revenue be used to pay sicker people’s higher premiums. This would require substantial new taxes, however, which is presumably a nonstarter in a Republican plan. In any case, it would only make the transfers to older, sicker people more explicit.
The second challenge is more nakedly political: Without a substantial change in Senate procedure, a bill to fully replace the Affordable Care Act, including changes to insurance rules, will require 60 votes. Republicans have only 52, so at least eight Democratic senators would need to be persuaded to go along. This is a much tougher assignment, especially since the administration will already be calling in legislative favors on ongoing confirmations, the debt limit, tax reform and other issues.
The Republicans’ desire to hold an early partisan vote repealing the ACA (through the reconciliation process that requires only a simple majority in the Senate) seems too strong to resist. The repeal will probably be set to become effective in the future, perhaps 2019 or 2020.
This vote will probably be closer than many people think, given the concerns that some moderate Republican senators have expressed about repealing the ACA with no replacement ready. Some far-right Republicans may also balk at anything less than a full immediate repeal. For the White House, however, the closeness of the vote will be a feature rather than a bug, because it will create the impression that the vote is significant.
The repeal legislation will probably include some modest steps toward replacing the ACA, but these will be mostly symbolic measures such as allowing insurance companies to sell across state lines (which by itself would do little to lower people’s premiums). The hard work of a creating comprehensive replacement is then likely to get bogged down in legislative muck.
But the administration can use its expansive waiver authority to allow states to experiment with both Medicaid and the individual insurance markets. As these 50 flowers bloom, President Trump could at some point declare victory and assert that the ACA has been sufficiently reformed.
This approach, whatever its potential substantive shortcomings, provides a major political benefit: The administration would not necessarily own the many problems that inevitably would remain. In response to any particular complaint in a specific state, the administration could simply shrug its shoulders and direct the inquiry to the relevant governor.
This outlook assumes that the Republican leadership in Congress isn’t willing, or lacks the votes, to change the Senate’s traditional rules, and that a comprehensive replacement for the ACA will indeed require 60 votes. If that changes, all bets are off.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
To contact the author of this story:
Peter R. Orszag at porszag5@bloomberg.net
To contact the editor responsible for this story:
Mary Duenwald at mduenwald@bloomberg.net
by Admin. | Nov 21, 2016 | Obamacare
1095 Filing Extended to March 2, 2017.
The employer reporting deadlines are delayed, not deleted! When are the 1095 filing forms due?
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Form
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Delivered to the Employee
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Delivered to the IRS (Paper)
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Delivered to the IRS (Electronically)
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1095-C
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3/2/2017
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2/28/2017
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3/31/2017
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1094-C
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N/A
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2/28/2017
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3/31/2017
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What does this mean?
Similar to last year, the IRS is making an accommodation to employers to prepare their forms. The filings are still due to the IRS as per the original deadline. Our HR/Payroll parters are still prepared to help your compliance needs and meet all of the deadlines and reporting burdens.
For a copy of Notice, please click on the link below:
https://www.irs.gov/pub/irs-drop/n-16-70.pdf
Please contact our team for immediate answers on your HR/Payroll/Compliance needs at Millennium Medical Solutions Corp (855)667-4621 for immediate answers.
Note: This delay does not impact the timing of Form 1095 A, Health Insurance Marketplace Statement. 1095 A is the form you receive if you purchase your health insurance through the Marketplace and not through your employe
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Sincerely,
Alex Miller
by Admin. | Nov 10, 2016 | Health Care Reform, Obamacare
2017 Election Results and ACA
The 2017 Election Results and ACA is a hot topic creating buzz. With the outcome of the 2016 elections now official, the Republicans will hold the majority in both chambers of Congress and control of the White House beginning in 2017. Our posting CLINTON VS TRUMP ON HEALTHCARE was a general summary of their differences on Healthcare.
Since President-elect Trump ran on a platform of “Replace and Repeal” of the Affordable Care Act (ACA), we anticipate that acting on this campaign promise will be one of the top priorities of the new Trump administration. We anticipate there will be significant disruption for individuals, employers, brokers and carriers across the country.
Republicans will likely need to use the process of Budget Reconciliation to pass legislation through the Senate, given the party did not secure enough seats to control a filibuster-proof supermajority. In other words, the legislation can pass in the Senate with a simple majority vote and not a super majority (which requires 60 votes). Reconciliation can be used to take away some, but not all, of the ACA. It is anticipated that certain provisions of the ACA would be targeted such as Medicaid expansion, the availability of subsidies and premium tax credits in the Marketplace, and the employer and individual mandate. It cannot be used to remove non-budgetary provisions (for example, insurance mandates like “to age 26”). In addition, it is conceivable that a Trump administration may simply direct various federal agencies (such as the Department of Labor) to not enforce certain ACA provisions.
The Republicans have not laid out a specific plan on what will replace the ACA. Generally, the party has supported the existing employer-based system (with some party members calling for limits on the tax exclusion). Based on published white papers on the President-elect Trump’s website, other aspects of a healthcare overhaul plan may include:
- Tax credits for purchasing individual health insurance;
- Expansion of Health Savings Accounts and HighDeductible Health Plans;
- Continuation of the prohibition on pre-existing condition exclusions from health insurance;
- High risk pools;
- Interstate sales of insurance; andMedical malpractice reform.
The process to repeal and replace the ACA will take time and nothing will happen between now and the New Year. Open enrollment is currently underway in the Marketplaces across the country and it is expected that individual policies (and subsidies for lower and middle-income individuals) will be available to enrollees as of January 1, 2017. What is unknown is whether the Trump administration and subsequent legislation will affect the Marketplace and subsidies in mid-2017 or instead phase out this coverage after the 2017 calendar year.
- The employer mandate (for applicable large employers);
- Form 1094-C and 1095-C reporting for CalendarYear 2016;
- Any ACA taxes and fees for self-funded plans to pay directly (such as reinsurance fees); and
- Plan design changes applicable to plan years thatbegin on or after January 1, 2017.
In addition, all other federal law mandates impacting employer health and welfare plans such as ERISA,HIPAA, COBRA, Code Section 125, the Mental Health Parity and Addiction Equity Act, and the Service Contract Act / Davis Bacon and Related Acts are still good law. There has been no indication that these non-ACA laws are targeted for repeal or replacement.
Stay tuned for updates as more information gets released. Sign up for latest news updates. Please contact our team on your 2017 health plan renewal at Millennium Medical Solutions Corp (855)667-4621 for immediate answers.
by Admin. | Sep 13, 2016 | Health Care Reform, Health Exchanges, Obamacare, regional health insurance co-ops, State Exchanges
Health Republic NJ Shutting Down
Health Republic NJ Shutting Down
In yesterday’s surprise announcement, NJ regulators will be shutting down Health republic NJ for 2017 “because of its hazardous financial condition”. This marks the demise of the second Metro area healthcare co-op with the same name-sake Health Republic but different managed healthcare co-op, see Health Republic NY Shutting Down Nov 30.
Since Obamacare’s rollout in the fall of 2013, 16 co-ops that launched with money from the federal government have collapsed. Now, just six co-ops—Wisconsin’s Common Ground Healthcare Cooperative; Maryland’s Evergreen Health Cooperative; Maine Community Health Options; Massachusetts’ Minuteman Health; Montana Health Cooperative; and New Mexico Health Connections—remain.
In a bizarre twist of fate or unintended Affordable Care Act design flaw small affordable startups not only have to gain new client footholds but also support large
established companies “with sicker patients”. Start-ups, by contrast, with much lower rate of diagnosed sick patients essentially pay into this tax. This tax is part of the risk adjustment program intended to stabilize Insurers who took on sicker patients and spread this risk. While some correctly blame too low pricing and some miscalculated business decision-making the inherent extra tax doomed the majority of the original 16 co-ops.
Health Republic in fact grew steadily and made money the first 9 months of 2015. However, HRNJ lost 17.6 million end of 2015 and is choking off at this $46.3 million payment to the government through the risk adjustment program. This is considered one of the 3 R’s of the reinsurance program – risk corridor, reinsurance and risk adjustment that were intended to level the playing field. The first “R”—“reinsurance”—subsidizes insurers that attract individual customers who rack up particularly high medical bills. The second—“risk adjustment”—requires insurers with low-cost patients to make payments to plans that share the benefits with those who insured higher-cost ones. And the third, called “risk corridors,” is a program to subsidize health plans whose total medical expenses for all their Obamacare customers overshoot a target amount.
The co-ops received less money than they initially anticipated last year under Obamacare’s risk corridor program, which resulted in the collapse of at least five co-ops and a $5 billion class action lawsuit
filed by 6 state’s co-ops – ” Oregon-based insurer Moda Health Plan Inc., Blue Cross Blue Shield of North Carolina, Pittsburgh-based Highmark Inc., and the failed CoOportunity Health, which was based in West Des Moines, Iowa, and Health Republic Insurance Co. of Oregon, which was based in Lake Oswego.”
From Politico’s “Obamacare’s sinking safety net”:
“The risk corridor program, however, has been an unmitigated debacle. In December 2014, the Republican Congress voted to prohibit the Obama administration from spending any money on the program, decrying it as a bailout for the insurance companies. Sen. Marco Rubio, then thought to be a leading GOP presidential contender for 2016, was particularly vocal in pillorying the program.
Unlike all those symbolic “repeal Obamacare” votes, Congress actually succeeded in blocking those risk corridor payments, and it hit Obamacare hard. Insurers filed claims seeking $2.9 billion, but under the limits imposed by the GOP there was less than $400 million available to make good on those payments. The end result: insurers initially received only 12.6 cents for each dollar they had counted on. Many of the new Obamacare co-op plans that went out of business blamed their collapse in part on the fact that they’d been counting on the full payments to keep them solvent.”
Regrettably, in a Presidential year no one wants to touch this burning hot potato. Perhaps NJ’s handling of this pressure cooker and taking 2017 off may be the best course of action after all.
9/16/16 Addendum:
As of Monday, September 19, 2016, the portal for Health Republic Insurance will be shut down, as they are no longer accepting new business for the year.
The New Jersey State Department of Banking and Insurance has also provided a list of FAQs related to the shutdown and how it affects individuals, small employers, brokers and providers. For more information, click here.
As always, our team is here to assist you and to help you grow your business.
