BluntPolitics.com

By Ric Joyner, CEBS, GBA, CFCI

Inside the beltway information is showing the Democrats are up against the wall with rising unemployment, cap and trade (tax on energy), health care and a deficit that is the biggest in history. Their constituents are speaking up against the “change” agenda that could stop job growth. With that said, the House came out with today with their version of Health Care Reform. A synopsis of the bill from Kilpatrick Stockton follows.

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Mark Stember, JD

While the Senate committees have been bogged down with discussions over taxing employer provided health coverage, the House Ways and Means Committee has been furiously working on a draft health care bill that uses a different funding source.  Today, the House Ways and Means Committee released a draft health care reform bill that is projected to cost approximately $1 Trillion over 10 years.  The main funding source for this draft bill is a surtax on high income individuals.  The graduated surtax starts at 1% for married couples with incomes over $350,000 and tops out at 5.4% for married couples with incomes greater than $1 Million.  The surtax is expected to raise slightly over half of the cost of the legislation.  

Other highlights of the draft bill include the following:

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  • Individuals will be required to purchase health coverage, or pay an income tax penalty.
  • Employers will be required to either provide health insurance coverage that meets certain minimum benefit and contribution requirements, or pay a penalty based on 8% of their payroll.  The minimum employer contribution would be 72.5% for individual coverage and 65% for family coverage.  The minimum benefits include preventive care with no cost sharing, as well as dental and vision coverage for children.  Annual out of pocket maximums are also capped.
  • The legislation would create a public health insurance option.
  • Pre-ex exclusions would be prohibited.
  • Changes are made to Medicare and the Medicare Part D benefit is improved.

While the draft bill is comprehensive in both size and scope (dropping in at over 1,000 pages), it is only a starting point.  The House Ways and Means Committee has scheduled a mark-up for later this week, and it must be voted on by the entire committee, and then the full House.  Afterwards, it would need to be reconciled with whatever bill is voted out of committee and then approved by the full Senate.  We are still hearing that the leadership would like to have the full House and Senate have their respective bills done by the August recess.  However, even with today’s release, that timeline still appears to be aggressive.

The employee benefits committee of KS has a summary of the bill at this link.

By Ric Joyner, CEBS, GBA

I remember in 1994 when “Hillary Care” was collapsing under it’s own weight because the change was too massive. This appears to be happening again. However, this time, President Obama has opened several “change” fronts.The list starts with Health Care Reform (1-3,500,000,000,000 [let the zeros sink in] ) in new expenses. Next is “Cap and Trade” which is a European form of energy tax. What this means for average Americans is higher energy usage taxes on electricity and gas. In Germany, where Cap and Trade is underway the average German family saw their electric bill go up 25%. Some in DC are saying this is the largest tax increase in American history, in the name of Global Warming.

Left wing view of cap and trade. http://www.americanprogress.org/issues/2008/01/capandtrade101.html

Right wing view of cap and trade. http://www.heritage.org/Research/Economy/wm1723.cfm

Another new new front is for comprehensive immigration reform. These are bold and strategic steps the President is taking. In summary, when a president attempts to take on more change fronts the projects tend to fall apart or become minimized. In my opinion I hope that the taxation of employee benefits is laid to rest including elimination of Flexible Spending Accounts, which is our livelihood as well as 1.3 million employees and 48,000,000 participants (1-6 Americans).

Jobs are being lost at a record pace and this is forcing down the presidents poll numbers. The stimulus bill dollars are slow to funnel into the economy which now has created further angst on those waiting to get funding for projects and put people to work. Ahhh…the government is so efficient. I can’t wait for my health care to be provided by a bureaucrat!

Senate now is 60% Democrat with the seating of Al Franken, which means they have majority control and  this can  means the Dems can pass bills faster. For Obama’s agenda this is strategic coup! However, your voice is now more important than ever. Your representative is accountable to you as a voter and they want to hear your comments or concerns. Get a plan and work the plan.

Good news from an NAPBA member who is educating their representatives. An mail report came in this week on status of their representative who sits on the Senate Finance Committee.

Yesterday, we spoke with Geri Gaginis, Senator Conrad’s Executive Assistant regarding setting up a meeting with Senator Conrad in DC.  Geri told us that with the markup of the health care reform bill starting next week, he won’t have time but that she does not think we need to be concerned about the issue of FSAs, HSAs and HRAs under health care reform.  She stated that both Kate Spaziani and Dana Halvorson are very close to the action and confirmed that both Kate and Dana believe that FSAs, HSAs and HRAs will remain a viable option under health care reform. 

Suzanne Rehr

Executive Vice President

Discovery Benefits, Inc.

 

Newsletter from our Attorney:

Clients and colleagues:

As we approach the July 4th holiday, Congress and key players in health care reform are still debating about the three key issues - an employer mandate, taxation of employer-provided health care benefits and a public plan option.  No substantial developments have emerged on any of the three fronts, and none is expected until Congress reconvenes after the holiday.  However, a number of other developments have emerged including the following:

• The Congressional Budget Office (CBO) scored the Senate’s draft bill at a cost in excess of $1.6 Trillion over 10 years, but recently the Senate Finance Committee believes it can scale down the the bill to $1 Trillion.  This leaves one-half to two-thirds of the bill with no revenue offset, because even taxing employer-provided coverage is only expected to raise approximately $250 -$500 Billion over 10 years.
• Wal-Mart has sent a letter to President Obama supporting employer-provided coverage and an employer mandate (see attached).

Have a great Holiday.  If you have any questions, please let us know.

The KS Health and Welfare Team

Mark L. Stember
Kilpatrick Stockton LLP
607 - 14th Street, NW, Suite 900
Washington, DC 20005-2018
202.508.5802 (P)
202.585.0018 (F)
mstember@kilpatrickstockton.com

The job of educating our representatives is up to us. Getting the word out to clients, your employees and participants is crucial. The tools to do this are located at: www.napba.og

eflex is adding this survey to our emails and you can too. Our employees are adding this to their emails: Do you like your flex plan? Please complete this survey.

http://www.zoomerang.com/Survey/?p=WEB229BAUR6MBCs

Good luck and don’t let others do all the heavy lifting…make your opinion heard.

Surprise! People will lose their insurance and gain insurance with a net increase that moves us backwards! And sacrificing Flexible Spending Accounts hurts employees and employers by eliminating the ability to afford out of pocket medical expenses, childcare and insurance premiums to pay for the health care bill which will put millions on the uninsured list not to mention unemployment. And we will lose our freedom and choice of doctor regardless of what Obama promises.

Preliminary Analysis of Major Provisions Related to Health Insurance Coverage Under the Affordable Health Choices Act

CBO and the Joint Committee on Taxation staff worked together to produce a preliminary  analysis of the major provisions related to health insurance coverage contained in the “Affordable Health Choices Act,” drafted by the Senate Committee on Health, Education, Labor, and Pensions (HELP).  The estimates are based on provisions from title 1 of the draft legislation released by HELP on June 9th. Among other things, the draft legislation would establish insurance exchanges (called “gateways”) through which individuals and families could purchase health insurance coverage. The proposed bill also would provide federal subsidies to substantially lower the cost of that coverage for some enrollees.

According to our preliminary assessment, enacting the proposal would result in a net increase in federal budget deficits of about $1.0 trillion over the 2010-2019 period. When fully implemented, about 39 million individuals would obtain coverage through the new insurance exchanges. At the same time, the number of people who had coverage through an employer would decline by about 15 million (or roughly 10 percent), and coverage from other sources would fall by about 8 million, so the net decrease in the number of people uninsured would be about 16 million or 17 million.

These new figures do not represent a formal or complete cost estimate for the draft legislation, for several reasons. The estimates provided do not address the entire bill—only the major provisions related to health insurance coverage. Some details have not been estimated yet, and the draft legislation has not been fully reviewed. Also, because expanded eligibility for the Medicaid program may be added at a later date, those figures are not likely to represent the impact that more comprehensive proposals—which might include a significant expansion of Medicaid or other options for subsidizing coverage for those with income below 150 percent of the federal poverty level—would have both on the federal budget and on the extent of insurance coverage.

CBO will continue to work on an ongoing basis with the HELP Committee and the other Senate and House committees involved in health care reform to provide estimates and analyses as legislation is developed.