Carter's Benefits

eNewsletter Volume 4, Issue 4 April 2011

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Repeal of 1099 Provision Imminent ?

"Congress sent the White House its first rollback of last year's health care law Tuesday, a bipartisan repeal of a burdensome tax reporting requirement that's widely unpopular with businesses." The AP says that "even President Barack Obama is eager to" repeal this provision of the law. White House spokesman Jay Carney stated, "We are pleased Congress has acted to correct a flaw that placed an unnecessary bookkeeping burden on small businesses. ... The administration remains eager to work with anyone with ideas about how we can make health care better or more affordable for all Americans." Read more

Recent News

  1. Senate Sends 1099 Repeal Bill To Obama.
  2. Texas Not Expected To Implement Health Exchange.
  3. Law Allows Self-Employed Workers To Deduct Health Insurance Costs Before Calculating Tax.
  4. House Budget Chairman, Paul Ryan Unveils Budget Plan With Massive Spending Cuts.
  5. Administration Unveils New Rules For ACOs.
  6. Insurance Industry Response To Healthcare Law Provision May Leave Many Texas Children Uninsured.
  7. Sebelius: CLASS Program Will Be Implemented Only If It Is Viable.
  8. Guidance on Health Benefit W-2 Reporting Issued.
  9. AARP Faces Inquiry Over Its Support Of Healthcare Reform.
  10. HHS Announces Grants For Reviews Of Insurance Rates.
  11. Thomson Reuters Releases Winners Of Its Top 100 Hospital Awards.
  12. NAIC Supports House Bipartisan Group's Push To Protect Brokers' Income.

Senate Sends 1099 Repeal Bill To Obama.
The Senate vote to repeal the 1099 provision in the healthcare law received wide coverage in print and online. Most sources characterized the action as a win for small businesses, with both parties claiming victory for the effort. The AP (4/6) reports, "Congress sent the White House its first rollback of last year's health care law Tuesday, a bipartisan repeal of a burdensome tax reporting requirement that's widely unpopular with businesses." The AP says that "even President Barack Obama is eager to" repeal this provision of the law. White House spokesman Jay Carney stated, "We are pleased Congress has acted to correct a flaw that placed an unnecessary bookkeeping burden on small businesses. ... The administration remains eager to work with anyone with ideas about how we can make health care better or more affordable for all Americans."
        Politico (4/6, Haberkorn) reports, "The overwhelmingly bipartisan vote, 87-12, gives President Barack Obama the first opportunity to sign or veto a bill repealing a piece of his signature law. He's expected to sign it despite concern about how to replace the money the provision would have raised." Notably, Senate lawmakers "passed the House's 1099 repeal bill, H.R. 4, without changes, allowing it to go directly to the White House." The New York Times (4/6, Mandelbaum, Subscription Publication) "You're the Boss" blog and the Washington Post (4/6, Sonmez) "2chambers" blog also cover the story

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Texas Not Expected To Implement Health Exchange.
Politico (4/5, Kliff) reported, "Everything is bigger in Texas -- the challenges for implementing the federal health reform law included." State officials and some "lobbyists indicate that Gov. Rick Perry is unlikely to take the steps necessary to implement the insurance exchange required under the federal health reform law, which means the task will probably be left to the Obama administration." Politico noted that "health exchanges do not come online until 2014, but HHS Secretary Kathleen Sebelius has to certify that states have made significant progress at the beginning of 2013."

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Law Allows Self-Employed Workers To Deduct Health Insurance Costs Before Calculating Tax.
USA Today (4/5, Block) reports that a new tax break this year could "significantly lower the cost of buying your own health insurance." In the past, self-employed taxpayers "had to claim that deduction after they calculated their 15.3% self-employment tax, which is the amount self-employed taxpayers must pay in Medicare and Social Security taxes," which is 7.65%. But, the "Small Business Jobs and Credit Act of 2010, which was signed into law last fall, changes the calculation" for 2010 tax returns. The law allows self-employed taxpayers to "deduct their health insurance premiums against their self-employment income before calculating the payroll taxes."

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House Budget Chairman, Paul Ryan Unveils Budget Plan With Massive Spending Cuts.
The unveiling of House Budget Chairman Paul Ryan's budget plan generated extensive media attention. On the network newscasts, for example, nearly half of the 14 minutes and 25 seconds devoted to the budget debate focused on Ryan's plan. The proposal, which was received along sharply defined partisan lines, is nonetheless garnering some relatively positive coverage as a substantial -- and political courageous -- addition to the debate. Of note, both the Washington Post (4/6) and Los Angeles Times (4/6) run editorials this morning offering some degree of praise for Ryan's blueprint.
        The CBS Evening News (4/5, story 2, 2:20, Cordes) reported, "Making good on their chief campaign promise, House Republicans unveiled a plan to dramatically shrink the size of government by overhauling the social programs at the root of the nation's debt crisis."
        McClatchy (4/6, Hall) says that "budget experts gave high marks for courage and low marks for the details in" the "bold Republican plan" – the "opening move in a political chess match that's likely to unfold over several years."
        Ryan Medicare Plan Would Increase Healthcare Costs For Seniors. The Wall Street Journal (4/6, Adamy, Subscription Publication) reports that Ryan's plan to revamp the Medicare program would be likely to result in higher costs for recipients and less coverage. The Journal notes that a CBO report released Tuesday says that "most elderly people would pay more for their health care" under Ryan's plan "than they would pay under the current Medicare system."
        GOP Budget Criticized For Potential Cuts To Nursing Home Care. The Hill (4/6, Pecquet) reports, "While House Budget Committee Chairman Paul Ryan (R-Wis.) is pitching his Medicaid overhaul as welfare reform, healthcare providers and liberal groups are warning that its greatest impact may be on seniors." Since "Medicare does not cover long-term care such as lengthy nursing home stays, some 14 million seniors and people with disabilities instead rely on Medicaid." Noting that "Ryan also wants to eliminate the healthcare reform law's long-term-care entitlement, without proposing a replacement," the article highlights analysis conducted by AARP showing that "more than 60 percent of seniors will need long-term care in their lifetime" while "only about 8 million Americans have private coverage."
        Ryan Likens His Medicare Proposal To Program's Part D Plan. The Hill (4/6, Millman) reports in its "Healthwatch" blog, "Rep. Paul Ryan (R-Wis.), unveiling his 2012 budget on Tuesday, compared his proposal to overhaul Medicare to the program's popular prescription drug benefit program." According to "the proposal, which Republicans are pitching as a 'premium support' model, Medicare would pay insurers for a plan chosen by beneficiaries. The overhaul wouldn't touch individuals currently 55 and older."

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Administration Unveils New Rules For ACOs.
The Obama Administration unveiled the much-anticipated rules for accountable care organizations, or ACOs, on Thursday. The event was widely covered by print media, which noted that major stakeholders offered muted reactions initially, saying that they needed time to review the 429 pages of regulations. No television networks covered the announcement. The New York Times (4/1, A20, Pear) reports, "The Obama administration proposed long-awaited regulations on Thursday encouraging doctors and hospitals to band together, coordinate care and cut costs. In return, the government offered financial rewards to healthcare providers that slow spending growth and meet detailed federal standards for the quality of their services."
        The Wall Street Journal (4/1, Johnson, subscription required) reports that under the new rules, physicians and hospitals would form groups called accountable care organizations, or ACOs, which are intended to help coordinate care in the Medicare system. At present, Medicare patients see several specialists, who do not typically communicate with each other about the care being provided, leading to higher costs and poor quality. The ACOs are meant to change that. Commenting on the rules, HHS Secretary Kathleen Sebelius said, "We need to bring the days of fragmented care to an end."
        USA Today (4/1, Kennedy) reports that, in fact, ACOs "could save Medicare $960 million over the next three years, Health and Human Services Secretary Kathleen Sebelius said." She also underscored "the need for preventive care, saying that 1 in 5 Medicare patients who make a visit to the hospital are back within 30 days, and that 1 in 7 suffer a harmful mistake. Another 100,000 patients die from infections every year."
        The AP (4/1) reports, "Eagerly awaited by the healthcare industry, the new approach was called for in President Barack Obama's healthcare overhaul." Should it prove successful "in Medicare, it is expected spread quickly to employer-provided health insurance." In some parts of the US, "such as the Minneapolis area, insurers, hospitals and doctors have set up similar networks for privately insured patients." But, certain experts warn that ACOs "could end up costing more money because of the intensive work involved in coordinating among different providers."
        The National Journal (4/1, McCarthy, subscription required) notes, "Republicans did not outright condemn the rule, but expressed concern," with Senate Finance Committee ranking member Orrin Hatch (R-UT) saying, "It is imperative that sufficient time be given to study and understand the ramifications of these unprecedented, massive regulations." For their part, private insurers seemed "worried about the antitrust implications." America's Health Insurance Plans President and CEO Karen Ignagni stated, "We remain concerned that ACOs could accelerate the trend of provider consolidation that drives up medical prices and results in additional cost-shifting to families and employers with private coverage."
        The Hartford Courant (4/1, Sturdevant) reports, "Health insurers praised" the Administration's new ACOs rules, "but many questions, they said, are left unanswered -- including whether the new method will discourage competition among hospitals and doctors." Keith Stover, a lobbyist for the Connecticut Association of Health Plans, commented, "The most interesting question: what's the reimbursement system going to look like in five years." Meanwhile, Mohit Ghose, an Aetna spokesman, said, "We look forward to creating a more effective and cost-efficient healthcare system that delivers better coordinated, more personalized care and saves patients time and money, while improving their health."
        Also covering the story are Reuters (4/1), the Washington Post (4/1, Goldstein), the Los Angeles Times (4/1, Levey), The Hill (4/1, Pecquet) "Healthwatch" blog, Ezra Klein in his Washington Post (4/1) blog, NPR (4/1, Galewitz, Gold) "Shots" blog, National Journal (4/1, McCarthy, subscription required), and CQ HealthBeat (4/1, Reichard, subscription required).
        Officials Say ACOs Will Not Violate Anti-Trust Laws. CQ HealthBeat (4/1, Norman, subscription required) reports that the ACOs "proposed for Medicare will allow providers to collaborate without running afoul of federal anti-trust laws, according to officials from the Centers for Medicare and Medicaid Services, the Department of Justice and the Federal Trade Commission." Notably, the "largest ACOs will face a mandatory review from either the DOJ or FTC and can't move ahead without approval, though the agencies are promising a fast process." Doctors "and other healthcare providers long have worried that ACOs authorized in the healthcare law (PL 111-148, PL 111-152) for the Medicare program might also expose them to the long arm of the law and prosecution for anti-competitive practices."

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Insurance Industry Response To Healthcare Law Provision May Leave Many Texas Children Uninsured.
The New York Times /Texas Tribune (4/1, Ramshaw) reports, "Insurers in Texas and across the nation -- protesting a provision of the 2010 federal healthcare overhaul that prohibits pre-existing condition limitations for children under 19, have simply stopped offering new child-only policies." For children being "raised by their grandparents, who are not poor enough to qualify for Medicaid and have no employer-offered insurance or family plans to cover them, there are few options." Although no agency tracks "how many children in Texas are affected" by the elimination of individual child-only plans, "experts suggest it is in the thousands."

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Sebelius: CLASS Program Will Be Implemented Only If It Is Viable.
CQ HealthBeat (3/31, Norman, subscription required) reports, "Obama administration officials may have to tell Congress it has to break the health overhaul law by not implementing a long-term care insurance program if it cannot be reworked to become financially sustainable, Health and Human Services Secretary Kathleen Sebelius said Wednesday." During testimony before the Senate Appropriations Health subcommittee, "Sebelius said if her staff can't make the program work financially, 'we won't turn the switch on it.'" HHS actuaries are working to ensure that the Community Living Assistance Services and Supports (CLASS) program will be viable for at 75 years, although "if we can't have a program design we know at the outset is going to be solvent, I think we'll return to Congress and say it won't be solvent and therefore we'll be violating the law," Sebelius said.

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Guidance on Health Benefit W-2 Reporting Issued
On Tuesday, March 29, the IRS issued interim guidance to employers on the PPACA requirement to document on each employee’s Form W-2 the cost of their employer-sponsored health insurance coverage. The IRS is also requesting comments on this interim guidance. The guidance makes it very clear that this reporting requirement is for informational purposes only and in no way impacts the federal income tax exclusion for the value of employer-sponsored health benefits. Read More

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AARP Faces Inquiry Over Its Support Of Healthcare Reform.

The Hill (3/28) reported in its "Healthwatch" blog, "House Republicans will adopt a new approach to their investigations of the healthcare reform law this week with a public grilling of a powerful lobby group that supported the overhaul. On Friday, two House Ways and Means subpanels will demand that AARP answer questions about its business practices and political endorsements." Notably, "Republicans have accused the seniors lobby of endorsing healthcare reform to make more money from its endorsement of Medigap insurance policies."
        Reporting on the "hearing Friday over AARP's insurance business," the New York Times (3/28, Wilson) "Prescriptions" blog reported that AARP "plays a big role lobbying over government policies and also obtains much of its budget from insurance it recommends to older Americans." In a statement, Wally Herger (R-CA), "who chairs the health subcommittee," said that the "hearing is about getting to the bottom of how AARP's financial interests affect their self-stated mission of enhancing seniors' quality of life." Herger added, "It is important to better understand how AARP's insurance business overlaps with its advocacy efforts and whether such overlap is appropriate."

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HHS Announces Grants For Reviews Of Insurance Rates.
The Hill (2/25, Millman) reports in its "Healthwatch" blog, "States can apply for $200 million in healthcare reform grants to develop programs preventing 'unreasonable' health insurance rate hikes, the Department of Health and Human Services announced Thursday." The healthcare law "requires health insurers in the small-group and individual markets to justify rate hikes deemed unreasonable." Steve Larsen, director of HHS's Center for Consumer Information and Insurance Oversight, said, "We know that rate review is an extremely effective tool to benefit consumers," and "our preference and desire is for states to be in a position to be the reviewer of rates."
        Modern Healthcare (2/25, Vesely, subscription required) reports, "There are new four grant categories for the new funding totaling $199 million. The first grants are three-year 'baseline' grants of $3 million per state." Next, states can apply for two-year baseline grants . And, "states can...get added funding in two areas: 'Workload grants' totaling $22.5 million to states with large populations and multiple insurers, and 'performance incentives' totaling $27.5 million to states that have the statutory authority to approve or reject insurance rate increases."

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Thomson Reuters Releases Winners Of Its Top 100 Hospital Awards.
Reuters (3/28) reported that Thomson Reuters has released the list of winners of its 100 Top Hospital awards. Since 1993, the organization has been evaluating hospitals at how well they perform in the areas of medical complications, profitability, expenses, patient satisfaction, patient safety, overall mortality, length of average patient stay, attention to clinical standards of patient care, mortality rates following discharge, and rates of readmission for heart failure, heart attack, and pneumonia.

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NAIC Supports House Bipartisan Group's Push To Protect Brokers' Income.
CQ Today (3/26, Ethridge, subscription required) reported, "A bipartisan group of House members wants to alter a new consumer protection in the healthcare law, and their proposal is getting strong support from the president-elect of the National Association of Insurance Commissioners, who is advocating for the change at the group's national meeting this weekend." The "measure (HR 1206), from Michigan Republican Mike Rogers and Georgia Democrat John Barrow, would exempt fees charged by health insurance brokers from being classified as administrative costs under the law's new medical loss ratio regulations." Notably, the "National Association of Health Underwriters, which represents agents and brokers, have been urging the NAIC to reverse its position and not count brokers' fees as administrative expenses." The bill already "faces an uncertain future, because it is already running into strong resistance from Senate Democrats."
        Nevertheless, the "draft letter circulated Friday" is "another sign that the NAIC is going to increase pressure on the Obama administration to protect the income of brokers," CQ HealthBeat (3/25, Norman, subscription required) reported. "The issue of compensation for insurance brokers and how it will be affected by medical loss ratio (MLR) rules under the healthcare overhaul law 'is the subject of much intense discussion,' says the unsigned draft addressed to Health and Human Services Secretary Kathleen Sebelius. It notes that the new MLR rules 'are having a deleterious effect on professional health insurance adviser compensation.'" The Hill (3/26, Millman) "Healthwatch" blog also covered the story.

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How does Carter's Benefits help ?
We continue to stay on top of changes in this industry. In a consultative role, Eddie Carter has begun hosting live seminars to update employers and Human Resource Managers on these changes. If you would like to host a meeting with your local community or civic organization, please contact me for details.

Eddie Carter, Consultant Eddie Carter,
Benefit Consultant
Questions@CartersBenefits.Com
 
 
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