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Old 07-04-2013, 11:20 AM   #41
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Members of congress and their staffs are indeed affected by the law, as Donheff pointed out, and this has turned into a real headache for them. The healthcare benefit they receive today is subsidized, and they cannot get a similar subsidy at the exchange. They can get a pay increase to offset that, but because it is not fuly deductible, their after tax income would fall.
I'm not sure of your point Michael. Are you trying to say that Congress-critters will now have smaller bundles of cash hidden in their freezers due to the "headache" of higher health insurance costs?
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Old 07-04-2013, 11:22 AM   #42
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Healthcare and the PPACA is an interesting topic, implementation will affect many of us in just a few short months. Lets' try to keep this and other PPACA threads focused on rollout, impact and suggested actions.
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Old 07-04-2013, 02:39 PM   #43
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Members of congress and their staffs are indeed affected by the law, as Donheff pointed out, and this has turned into a real headache for them. The healthcare benefit they receive today is subsidized, and they cannot get a similar subsidy at the exchange. They can get a pay increase to offset that, but because it is not fuly deductible, their after tax income would fall.
Awwww... So they're in the same boat as those of us who have to buy our own insurance, with no employer support or other subsidy? Oh, the horror of it all.

I feel so very, very sad for them.

Perhaps we could mandate that the Modified Adjusted Gross Income for all Congresscritters must be less than four times the poverty rate? Then they could enjoy subsidies via the state insurance exchanges.
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Old 07-04-2013, 03:07 PM   #44
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Getting back on topic (and hoping we can stay there) it seems Htown Harry had a point. Not much has changed, employers that would have been fined get another year. The exchanges, which have been the real point of focus for us here, are not affected by the delay.

Members of congress and their staffs are indeed affected by the law, as Donheff pointed out, and this has turned into a real headache for them. The healthcare benefit they receive today is subsidized, and they cannot get a similar subsidy at the exchange. They can get a pay increase to offset that, but because it is not fuly deductible, their after tax income would fall.
I knew Congress is required to get insurance through the exchanges but I assumed they would get covered for the average portioned covered under the existing program, about 70%. If they have to pay 100% out of pocket (especially staffers) I think that is a travesty. Most decent employers pay the lion's share of health premiums and the Federal Government should model good employer behavior. Sticking the whole nut on them would amount to a multi-thousand dollar pay cut. Are you certain they don't get most of the cost covered?
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Old 07-04-2013, 03:20 PM   #45
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Awwww... So they're in the same boat as those of us who have to buy our own insurance, with no employer support or other subsidy? Oh, the horror of it all.

I feel so very, very sad for them.
As a fellow traveler in that same boat, I know the feeling. But I do feel badly for those that will see their costs increase, even if it is only to remove the effect of inequitable subsidy and distorted policy.

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Are you certain they don't get most of the cost covered?
Currently there is no regulatory mechanism to provide a policy through the exchange that is subsidized, with limited or exclusive access, multi-priced, or anything other than single priced and open to all takers. I have read lots of speculation regarding closed, secret back room negotiations and such, but I don't believe most, and suspect it is mostly tin-foil beanie material. This is not the only group that will have to pay more as our health care system corrects, and it might give them greater insight into how to fix this. To answer your question, at this moment, there is no exception or alternative that I am aware of.

Edit to add: The one way around this I can think of is for the Treasury to allow employers to contribute to policies acquired on the exchange, and continue to allow that contribution to be fully deductible. Under this, however, any employer would be able to do the same.
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Old 07-04-2013, 05:26 PM   #46
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That doesn't look very onerous. One person should be able to implement it in a few days. Certainly, nowhere near as complicated to construct and adhere to as HIPAA regulations, electronic records, and managing the ACA at point of service.
Absolutely agree. In this age of IT, these seem simpler reporting issues than other existing employment reg's (e.g. Soc Sec withhold, Medicare tax, retirement plans, etc.). IMHO- This was NOT valid reason the large employer HI mandate was delayed.
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Old 07-04-2013, 07:59 PM   #47
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In this age of IT, these seem simpler reporting issues than other existing employment reg's (e.g. Soc Sec withhold, Medicare tax, retirement plans, etc.). IMHO- This was NOT valid reason the large employer HI mandate was delayed.
Are you thinking of all types of businesses with 50+ employee, or just the Megacorps?

The loudest protests were coming from employers with a significant number of part-time employees, e.g. the members of the National Retail Federation.

They were objecting to two issues in particular, both requiring new IT tools for the business to meet PPACA's reporting and payroll administration requirements.

One was the definition of "number of full-time employees". The full-time definition in the PPACA is 30 hours or more, a figure that isn't used elsewhere in law or regulation. Adding to that complexity, the proposed regulations require that part-time employees be converted to FTE's for measurement against the 50 employee threshold. Given that part-timers inherently work hours that fluctuate from week to week, the formula for determining whether a business employed 50+ was going to be complicated.

The other issue relates to the mandate for 50+ employers to offer coverage to those employees that exceed the full-time threshold of 30 hours per week. Treasury (the IRS) was attempting to develop a method of tracking hours on average, to recognize eligible employees without the expense of enrolling and dis-enrolling employees into coverage as they gain or lose eligibility. A proposed “look-back” method would allow employers to average hours over a set period (not to exceed 12 months) in exchange for an equal or greater period of stable coverage without regard to eligibility for coverage.

The regs that specify these formulas aren't final, so the bulk of the IT work for employers to calculate and track such figures likely hasn't started yet.

Will it be simple to complete the calculation software once the regs are complete? Maybe for the traditional Megacorp, but not necessarily for the owner of a few franchises in the food court over at the mall.
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Old 07-04-2013, 08:04 PM   #48
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...it seems Htown Harry had a point...
This happens only about once every thousand posts. Thanks for noticing.
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Old 07-04-2013, 08:20 PM   #49
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.....The regs that specify these formulas aren't final, so the bulk of the IT work for employers to calculate and track such figures likely hasn't started yet. ...
BINGO! It's the Feds delaying the final reg's that caused this. (I'll not speculate on whether reasons were political or merely bureaucratic incompetence over past 3+yrs.) Having been involved in payroll & billing for business of ~70 professionals for a decade, I have more than passing knowledge here. It was NOT a Megacorp. I vividly recall the hassles of tracking eligibility for both 'traditional' (pre-ACA) HI eligibility & retirement plan qualifications as these folks' w@rk efforts (hrs, OT,pay, etc) varied significantly over the typical yr around the diff qualification thresholds. PITA to be sure, but it was doable. HOWEVER- you are absolutely correct that businesses need to know what the gov't rules are in order to comply. NO company can hope to comply with reg's which ain't written yet
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Old 07-04-2013, 08:52 PM   #50
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I'm glad to hear that your comments have the perspective of someone who has seen other laws roll through the HR office, ERhoosier.

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BINGO! It's the Feds delaying the final reg's that caused this. (I'll not speculate on whether reasons were political or merely bureaucratic incompetence over past 3+yrs.)
There is a third possibility - that it is truly challenging to translate into regulation a complicated law that will apply to most every U.S. business with employees. Especially a law facing myriad legal and political attacks.

This "inside baseball" account of the decision doesn't discount that politics or bureaucracy are factors in the delay, but neither does it support the idea that those were the only factors.
Obamacare: How business got its surprise win - Joanne Kenen and Paige Winfield Cunningham - POLITICO.com
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The White House has held many meetings with business groups — sometimes about the health law, sometimes more general. Business lobbyists returned to the health law rules in both settings, time and again. They spent time with high-level officials, including Nancy-Ann DeParle, Gene Sperling, Alan Krueger, Melody Barnes and Valerie Jarrett, some of whom have since left the White House.

“I can’t tell you how many times we met with them,” said Neil Trautwein, vice president of the National Retail Federation, recounting his frequent conversations with White House and Treasury officials. “I’ve got to give them credit for reaching out to us and working to understand our concerns, and I think eventually, not because of any special thing we did, they came to the view that this was not going to be ready for prime time,” Trautwein added.

Several trade groups had fly-ins so Washington officials could hear from business owners across the country. The National Restaurant Association, the National Retail Federation, the National Council of Chain Restaurants and chambers of commerce were among those that took part, said Stephen Caldeira, president of the International Franchise Association.

Small Business Administrator Karen Mills was particularly receptive, Caldeira said. “The relationship with Karen Mills, from our perspective, was one of the very bright lights of the Obama administration.”

A senior administration official gave a parallel account: The White House heard the concerns about how businesses would have to report their insurance coverage, how data would be collected and verified and how each cost factor would be calculated.
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Old 07-05-2013, 07:46 AM   #51
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Harry, thanks for the additional clarification. It is very helpful to understand better why this is happening. From the above, I would suspect this delay will lead to a modification or rewriting of some of the regulation.
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Old 07-05-2013, 09:29 AM   #52
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From the above, I would suspect this delay will lead to a modification or rewriting of some of the regulation.
Right--well, maybe. This "outreach" (what we used to call "listening") might also have been done at an earlier point, which might have resulted in a better law. Politically, it may be difficult to find legislators of any stripe wanting to associate their name with anything linked to the ACA before the 2014 elections.

I'm wondering what the change means for next year in practical terms. Example: Joe works for a company that provides health care insurance for his family. Joe isn't satisfied with the coverage and service (high co-pays, long waits, etc). The health insurance exchanges in his state look like a better deal for him, and his earnings would qualify him for the federal subsidy. Can he buy the insurance through the exchanges and get the subsidy? According to the ACA, he can't get the subsidy if he has the ability to get insurance that meets the ACA requirements through his employer--but now he might have no way to know if this employer-provided insurance meets the ACA rules (since the company now doesn't have to provide this info until 2015). If Joe buys the insurance and it turns out that the employer coverage was ACA qualified, no subsidy? If he gets the subsidy anyway, shouldn't we be a bit sore that this failure by the government to do its job (i.e. administer a law they fought for) has resulted in a payment of thousands of taxpayer dollars to Joe and others that was entirely avoidable?
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Old 07-05-2013, 10:24 AM   #53
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Obviously I'm not a WH insider, but I firmly believe the "inside baseball" account was fluff. Lobbyists always have nice things to say about the WH in the press But hard truth is same issues had been raised & communicated to WH (& Congress) regularly even back before ACA was passed. Only difference now is that jobs are actually being affected (e.g. widespread cuts to 29hrs, FT hiring freezes) so WH did something. IF both sides had been working in good faith over past 3 yrs, IMHO this delay could have been avoided.
Unfortunate reality is now many employees will be faced with another year of uncertainty, lower coverage non-ACA qualified HI, or no HI at all. Many now fear WH may suddenly gut delay other parts of ACA. How do ERs & near-ERs plan for that
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Old 07-06-2013, 10:38 AM   #54
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CMS just published a new set of final rules (see here), one clarifies how the exchanges will verify healthcare for employed individuals. From Health reform GPS Health Reform GPS: Navigating the Implementation Process
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As a result of the delay, the Exchange will have no comprehensive database or official records reporting if an individual has access to affordable coverage, and thereby determine subsidy eligibility. The Exchange will therefore rely upon applicant self-reported information, verification against other information sources such as tax reforms, and sampling of a group of applicants in which the Exchange will manually call the applicant’s employer.
So, it will be trust, crosscheck some, audit and sample others.
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Old 07-06-2013, 11:02 AM   #55
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So, it will be trust, crosscheck some, audit and sample others.
What will be the penalty if you're caught getting a subsidy that you don't qualify for? Just return of the subsidy? Will there be any additional penalty?
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Old 07-06-2013, 11:13 AM   #56
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CMS just published a new set of final rules (see here), one clarifies how the exchanges will verify healthcare for employed individuals. From Health reform GPS Health Reform GPS: Navigating the Implementation Process
So, it will be trust, crosscheck some, audit and sample others.
Seems similar current IRS income tax procedures.
Except, as MooreBonds points out, no specific info on penalties for 'cheaters'.
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Old 07-06-2013, 11:28 AM   #57
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The rule clarification doesn't have any discussion on penalties. It does say (I think) the auditing will be done in the same timeframe as the application is submitted, so I imagine if there is a discrepancy it will be resolved.

Premium assistance is a function of income and MAGI, that is subject to verification and nothing has changed. An employee that has unaffordable coverage from an employer would already be eligible for coverage and assistance on the exchange. The risk for the exchange is someone who has affordable individual coverage but unaffordable (or no) family coverage; they were denied premium assistance by an IRS ruling earlier in the year. The uninsured children in this case would be referred to one of the CHIP programs, and spouses might qualify for Medicaid or other public coverage, so it's not evident that there is a real exposure here.
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Old 07-06-2013, 11:50 AM   #58
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What will be the penalty if you're caught getting a subsidy that you don't qualify for? Just return of the subsidy? Will there be any additional penalty?
IIRC there is already a true-up provision that will provide for return of the subsidy.

Typically there is some sort of penalty for cheaters beyond just making the situation whole with interest, so it would seem likely there would be eventually. IMO it wouldn't make sense not to have some sort of penalty for cheating.

Why, are you thinking of cheating if there is no penalty?
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Old 07-06-2013, 06:09 PM   #59
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Employees who will now not have coverage from their (large) employers until 2015 will be able to get the subsidies if they qualify. That will be a lot of extra taxpayer money paid out--i.e. money I'll be taxed to help a corporate balance sheet. There was a time when folks at least feigned concern about how much this would cost--now there's much more talk about just getting this thing going regardless of the number of zeros added to the deficit.
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Old 07-07-2013, 10:05 AM   #60
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The SWR "race to the bottom" thread discussing Wade Pfau's latest paper sent me to the JFP's site and the table of contents of the latest issue.

There is a paper there that is relevant to this thread.

A New Way of Thinking about Employer-Sponsored Health Care Coverage Strategies

The author does an excellent job of summarizing the options that must be considered in an employer's economic analysis of providing HI coverage in the ACA environment.

Quote:
The following are potential alternative solutions to help employers deal with ACA’s impact:
  • Continue offering current coverage “as is”
  • Decrease employer contributions to coverage
  • Switch to a cheaper plan (a plan that has a lower actuarial value)
  • Drop coverage and pay the penalty under the “play or pay” tax
  • Drop coverage, pay the penalty amount, and increase employee salaries
  • Drop coverage, pay the penalty amount, increase employee salaries, and offer voluntary benefits
  • Offer coverage through an exchange (if eligible)
  • Self-fund a plan to avoid essential health benefits mandate
  • Switch to a defined contribution plan
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