Obamacare Creates Boom For Federal Contractors
18,000 Californians use extended Obamacare sign-up to avoid tax penaltyby Chad Terhune
California officials said about 18,000 people have taken advantage of an extended Obamacare enrollment period that was created as a final opportunity to escape the health law's tax penalties.
The special enrollment window runs until April 30 for people who claim they were unaware of the Affordable Care Act's financial penalties for being uninsured.
Peter Lee, executive director of the Covered California exchange, said Tuesday that since Feb. 23 more than 18,000 people have signed up for a private health plan and cited that reason for enrolling during the extended period.
Normally, obtaining a policy outside regular open enrollment, which closed Feb. 20, is reserved for people who experience a qualifying event such as divorce, having a child or losing employer coverage. That type of special enrollment is available year round.
Overall, 1.4 million Californians get their health coverage through the state marketplace.
Uninsured people can't avoid a health-law penalty for lacking coverage in 2014. But there's still time to do something for the 2015 tax year.
"It's not too late to avoid a penalty for 2015," Lee said. "2014 is water under the bridge. You can't affect that."
Lee said the exchange is working with tax preparers and other government agencies to help ensure that people aren't surprised by the federal penalties.
An individual making $40,000 who can afford coverage would face a tax penalty of about $600 for being uninsured in 2015, Lee said.
A family of four with a household income of $70,000 might have to pay nearly $1,000 to Uncle Sam for lacking health coverage this year, according to the state.
"Some people are just now discovering that being uninsured can be an expensive proposition," Lee said. "We don’t want there to be any surprises."
Consumers can seek an exemption from the federal mandate to buy health insurance. Grounds for getting exemptions include financial hardship and religious reasons.
For the 2014 tax year, the penalty for being uninsured is $95 per adult or 1% of modified adjusted gross income, whichever is greater.
Those penalties are increasing for future tax years. For 2015, they rise to $325 per adult or 2% of income, whichever is higher.
Epidemiologist: Maine poorly prepared to deal with disease outbreaks
Posted April 07, 2015, at 10:41 a.m.
BANGOR, Maine — A Belfast-based epidemiologist and family physician who investigated infectious disease outbreaks for the Centers for Disease Control and Prevention said Monday that public hysteria and paranoia are not the answer when such crises emerge.
A case in point was the recent furor over Ebola. Maine made international headlines when Kaci Hickox, a nurse who until recently lived in Fort Kent, was quarantined after returning from treating Ebola patients in West Africa despite having no symptoms of the disease.
As Dr. Peter Millard sees it, there is a better way.
“We’re going to have epidemics. Epidemics are always going to be with us. We’re going to have a bad epidemic eventually and if we don’t pull together and use science as a basis for our response, we’re going to be in big trouble,” Millard said Monday evening during a lecture in Husson University’s Kominsky Auditorium.
With regard to Maine’s level of preparedness for handling epidemics, Millard, who recently returned to the United States after a five-year stint as a professor at the Catholic University of Mozambique Medical School, had this to say:
“It’s terrible. We have no state epidemiologist. We have no assistant state epidemiologist,” he said.
While many of the Maine Center for Disease Control and Prevention’s functions are fueled with federal dollars, Millard said, “they’ve laid off a lot of people. I think we’re really poorly prepared now in Maine, which is a shame because we historically have been pretty well prepared, but I think we’re in really bad shape now.
“We don’t have the leadership in the governor’s office,” he said. “Leadership is really important in public health. People, they don’t think it’s important, so that’s when leadership is especially important.”
State health officials, however, took exception to Millard’s assessment of the situation.
“Maine is well-prepared for a disease outbreak, and recent results speak for themselves,” John Martins, the state’s public health information officer, said Tuesday, citing as an example Maine CDC’s recent response to a sudden onset of illness at a Portland school recently.
“Maine’s response to Ebola was effective, and its protocols offered an additional level of protection for Maine people,” Martins said.
“As is the case in any organization when a key vacancy exists, the state epidemiologist’s work has been reassigned and continues to get done. The responsibilities are currently being fulfilled through a contract with experts here in Maine,” he said. “We plan to fill the position and interviews will begin shortly.“
The state’s disease control and prevention staff also includes eight epidemiologists, two federal CDC fellows, an epidemiology program manager and a coordinator who focuses on healthcare acquired infections, Martins said.
“While we look forward to the selection of a new state epidemiologist, it is imperative that all spending continues to be assessed to ensure efficient and effective use, regardless of the funding source,” Martins said, adding, “this administration is committed to financial accountability, and we recognize there’s room for improvement. To say that Maine is ill-prepared for a disease outbreak because there is no state epidemiologist is an insult to the hard-working professionals who do this work daily.”
Also during his address, Millard said there are much worse threats than Ebola.
While Ebola is transmitted through direct contact with blood and other body fluids, other diseases are transmitted through the respiratory system, as are influenza or Severe Acute Respiratory Syndrome, he said.
“The respiratory ones are the scary ones. With measles, if a person with measles enters a room and nobody is immunized, everybody in the room is going to get measles,” he said. “That’s how easily it is transmitted.”
Millard credits a timely, ethical, science-based approach for the country’s “big close miss” with SARS in 2003-04. He said good preparation was key.
“We all worked together. People didn’t get hysterical. They recognized the seriousness of of the situation. The whole world’s health agencies worked together. We were very lucky. It was a close call,” he said.
'Cadillac tax' the next big Obamacare battle
Experts say a majority of employers could eventually face the tax on health care benefits.
Read more: http://www.politico.com/story/2015/04/obamacare-health-care-cadillac-tax-116659.html#ixzz3WjRCxizvA mix of business groups and labor unions are pushing to tee up the next big Obamacare fight: killing its so-called Cadillac tax.
It is, they say, the type of Obamacare “fix” that Republicans and Democrats can agree on — notwithstanding the problem of filling an $87 billion budget hole that nixing the levy would produce.
Story Continued Below
Many expect it to be the next protracted battle over Obamacare — one that threatens to become a headache for Democrats, many of whom never liked the tax despite supporting the law more generally.
It’s one of the last big parts of the Affordable Care Act to go into effect — lawmakers delayed the levy until 2018 in part because it is so controversial — but companies are wrestling with it now as they plan employee benefits. Some are already negotiating with unions over benefits that could spill into 2018.“This is going to have a life of its own as the clock ticks closer to 2018,” said Rep. Joe Courtney (D-Conn.), a critic of the tax.
Though the nickname suggests it will apply to a select few, experts say a majority of employers could eventually face the prospect of imposing what will be the first-ever tax on health care benefits.
The IRS began last month spelling out the nitty-gritty of how exactly the tax will work, though it left out many of the details employers say they need.
At issue is a 40 percent excise tax on the health benefits companies provide their workers above a certain threshold. In 2018, the tax will hit insurance and related perks valued at more than $10,200 for singles and $27,500 for families. So for family benefits worth $30,000, the tax would apply to the $2,500 that’s above the limit.
Taxing those benefits represents a major shift in generations-old tax policy.
The government has encouraged companies to offer health insurance by letting them write off from their taxes the cost of providing workers with coverage for more than a half-century, a byproduct of World War II-era wage controls.
Eager to attract workers and unable to increase pay, companies turned to expanding fringe benefits such as health insurance. But economists of all stripes have long complained the open-ended tax break companies get for providing that coverage drives up health care costs while disproportionately benefiting the affluent.
Nonetheless, it’s a major reason why millions of Americans get coverage through their jobs. So for lawmakers, it’s long been all-but-politically untouchable. Ironically, Barack Obama as a presidential candidate attacked Sen. John McCain in 2008 for proposing to tax health benefits.
Unions, which often have generous health benefits and have opposed the tax since the law’s inception, say the looming levy is already becoming a factor in their contract negotiations.
http://www.politico.com/story/2015/04/obamacare-health-care-cadillac-tax-116659.html
What does the ACA excise tax on
high-cost plans actually tax?
Robert H. Dobson, FSA, MAAA
Stuart D. Rachlin, FSA, MAAA
Prepared for:
National Education Association
Prepared by:
National Education Association
Prepared by:
EXECUTIVE SUMMARY
Milliman was retained by the National Education Association (NEA) to assess two components of the excise tax on high-cost employer-sponsored health plans that is part of the Patient Protection and Affordable Care Act (ACA). The first component was the degree to which the excise tax on high-cost plans taxes the level of a health plan’s benefits versus the degree to which it taxes a plan based on factors exogenous to the plan’s benefits. The second component was the degree to which that tax’s age and gender adjustment appropriately corrects for the impact of age and gender on health insurance premiums.
The analyses demonstrate that there are several quantifiable elements of premium determination, including plan members’ geographical location, the industry in which they work, their age and gender, and the number of people in the health insurance group in which they participate, that can increase premiums in addition to the level of benefits. See Summary One below for a sample of these results.
Depending on the combination of these premium-driving factors other than benefit level, premiums for a given employer can be expected to exceed the threshold for incurring the tax even for a plan without especially rich benefits. As a result, although the excise tax is often referred to as a tax on overgenerous health benefits, it is likely to be a tax based on factors other than benefit level and beyond the control of health plan members. In our analysis, this was the case for our baseline plan (using the plan design of the Blue Cross and Blue Shield standard benefit option under the Federal Employees Health Benefits Program), the platinum plan, and the gold plan (the latter two using the benefits of plans offered on an exchange). The opposite is also true: There are also many areas of the country where the combined effect of premium-driving factors will make it unlikely that the threshold could be exceeded, no matter how rich the benefit plan. Unexpected consequences of the tax, therefore, include imposing a tax on moderate-benefit plans based primarily on geography, age, and gender, while failing to impose a tax on rich-benefit plans for the exact same reasons.
Although the statute attempted to correct for the impact on premiums of age and gender, we find that it does not always do so. For that reason, age and gender remain on the list of factors that can drive an employer to face a tax. We find that the age and gender adjustment accurately reflects the age and gender characteristics of employers, but does so only for employers generally in areas with average healthcare costs and average network discounts. For example, using all of the assumptions described in this paper, our analysis shows 30 metropolitan statistical areas (MSAs) around the country where the benefits of the Blue Cross and Blue Shield standard benefit option under the Federal Employees Health Benefits Program (FEHBP) are estimated to generate an excise tax for a standard employer population based on the national labor force. In these same areas, the age and gender adjustment may prove to be inadequate, for reasons discussed below, increasing the tax for employers whose employees are older or higher-cost male/female profiles.1 In many of these areas, a less rich gold plan is also estimated to generate a tax and inadequate age and gender adjustment.
1 In general, women are more expensive to insure until age 60, when men become, in general, more expensive to insure.
Milliman Client Report 1 What does the ACA excise tax on high-cost plans actually tax?
Milliman was retained by the National Education Association (NEA) to assess two components of the excise tax on high-cost employer-sponsored health plans that is part of the Patient Protection and Affordable Care Act (ACA). The first component was the degree to which the excise tax on high-cost plans taxes the level of a health plan’s benefits versus the degree to which it taxes a plan based on factors exogenous to the plan’s benefits. The second component was the degree to which that tax’s age and gender adjustment appropriately corrects for the impact of age and gender on health insurance premiums.
The analyses demonstrate that there are several quantifiable elements of premium determination, including plan members’ geographical location, the industry in which they work, their age and gender, and the number of people in the health insurance group in which they participate, that can increase premiums in addition to the level of benefits. See Summary One below for a sample of these results.
Depending on the combination of these premium-driving factors other than benefit level, premiums for a given employer can be expected to exceed the threshold for incurring the tax even for a plan without especially rich benefits. As a result, although the excise tax is often referred to as a tax on overgenerous health benefits, it is likely to be a tax based on factors other than benefit level and beyond the control of health plan members. In our analysis, this was the case for our baseline plan (using the plan design of the Blue Cross and Blue Shield standard benefit option under the Federal Employees Health Benefits Program), the platinum plan, and the gold plan (the latter two using the benefits of plans offered on an exchange). The opposite is also true: There are also many areas of the country where the combined effect of premium-driving factors will make it unlikely that the threshold could be exceeded, no matter how rich the benefit plan. Unexpected consequences of the tax, therefore, include imposing a tax on moderate-benefit plans based primarily on geography, age, and gender, while failing to impose a tax on rich-benefit plans for the exact same reasons.
Although the statute attempted to correct for the impact on premiums of age and gender, we find that it does not always do so. For that reason, age and gender remain on the list of factors that can drive an employer to face a tax. We find that the age and gender adjustment accurately reflects the age and gender characteristics of employers, but does so only for employers generally in areas with average healthcare costs and average network discounts. For example, using all of the assumptions described in this paper, our analysis shows 30 metropolitan statistical areas (MSAs) around the country where the benefits of the Blue Cross and Blue Shield standard benefit option under the Federal Employees Health Benefits Program (FEHBP) are estimated to generate an excise tax for a standard employer population based on the national labor force. In these same areas, the age and gender adjustment may prove to be inadequate, for reasons discussed below, increasing the tax for employers whose employees are older or higher-cost male/female profiles.1 In many of these areas, a less rich gold plan is also estimated to generate a tax and inadequate age and gender adjustment.
1 In general, women are more expensive to insure until age 60, when men become, in general, more expensive to insure.
Milliman Client Report 1 What does the ACA excise tax on high-cost plans actually tax?
December 9, 2014
Milliman Client Report – What does the ACA excise tax on high-cost plans actually tax?
Summary Two and Summary Three below show samples of the results for six of the areas in our
chosen 30 markets.
There are two important considerations to note about these analyses.
There are two important considerations to note about these analyses.
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First, we have only identified some areas where the combined geographical area and
average provider discount cause the threshold to be exceeded, which is just due to the
location of the employer. There are also many areas where the combined effect of these two
factors is to make it unlikely that the threshold could be exceeded based on location of the
employer, no matter how rich the benefit plan. Looking at those areas is beyond the scope
of this paper.
-
Second, there are other combinations of elements of premium determination that may also
result in the threshold being exceeded even for the baseline benefit plan. The examples we
show should be considered illustrative, not exhaustive.
Please see the full report that follows for a detailed description of our results and some important considerations and caveats concerning our work. The opinions expressed in this paper are those of the authors and not necessarily those of the NEA or other Milliman consultants.
http://www.nea.org/assets/docs/Milliman--What_Does_the_Excise_Tax_Actually_Tax.pdf
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