One Nagging Question About Qualifying for PPACA Exchanges

by LAS

One of the nagging questions that keeps bothering me about the states insurance exchanges is whether the people who need it will be be able to get coverage.

The PPACA law was intended to expand Medicaid coverage to all low-income adults under age 65 beginning in 2014. This would have brought 16 million uninsured under the Medicaid umbrella – assuming income of up to $15,415 for an individual and $26,344 for a family of three.

However, the Supreme Court ruled that the states can decline (opt out) of the expansion of Medicaid. About a dozen governors have said they will not expand Medicaid in their states, or are leaning in that direction. Now, since the Supreme Court ruled on this matter, I hear that the federals are trying the ol' carrot-and-stick approach with the recalcitrant states in question.

While I am on the subject of PPACA, here is what goes into effect in 2014:

by LAS

Several provisions of the PPACA law, aka Obama-Care, will go into effect in 2014. Let's review them now.

First, we should mention that the “employer mandate” has been pushed back to 2015. No word on what happens then.

Second, rules regarding waiting periods will go into effect. The most important provision is that waiting periods for health care coverage can no longer extend past 90 days. This may be a bit tricky for employees who work seasonal or variable hours. In that case, it may be that these employees might not be covered at all in 2014 if the employer requires its employees to work a minimum number of hours to be covered.

Third, pre-existing conditions cannot be used as a grounds for denying a policy nor for denying treatment for that condition. Plans cannot discriminate against persons for any of a range of health factors. Plans cannot impose restrictions on eligibility or charge more for coverage based on health history, etc. Women cannot be charged more than men. Also a part of this clause is that all employees must be given comparable healthcare plans; that is, high-income employees cannot get gold-plated plans and everyone else gets a tin version.

Fourth, starting in July 2013, employers start paying one dollar per employee into a fund for the Patient-Centered Outcomes Research Institute, which will collect and publish data relating to effectiveness of medical treatments. The assessment goes up to $2 per employee for years 2 thru seven, when it is designed to terminate.

Fifth, rewards for meeting requirements under wellness programs will increase from 20 percent of cost of coverage to 30 percent. Wellness incentives for quitting smoking will increase up to 50 percent.

Sixth, the so-called “donut hole” in Medicare Part D prescription coverage will shrink until it is eliminated in the year 2020.

Seventh, the individual mandate may (or may not) also be pushed back, but there was never any provision for sending people to jail for not buying insurance. People may lose all or part of a tax refund, or pay an annual tax for 2014 of one percent of income or $95, whichever is greater. 

The House tries yet again to delay or gut Obama-Care mandates; And who is behind all these attempts

by LAS

The GOP-dominated House has yet again passed a bill to delay or gut key provisions of the PPACA (aka Obama-Care) law. This week they passed bills to delay implementation of two key provisions, the individual mandate and the employer mandate (for businesses with 50 or more workers).

First of all, even though the House has made several attempts to delay or gut provisions of the reform law, it is very unlikely that the Senate will even discuss comparable bills on the floor. In fact, the House has voted 37 times already to “repeal or defund at least part of the health-care law, including three times to annul the entire measure” since 2010.

The Obama administration said in a statement that the measure to delay the employer mandate is “unnecessary,” and legislation postponing the individual requirement “would raise health insurance premiums and increase the number of uninsured Americans.”

However, House members of the GOP ran on promises to delay or defund PPACA in 2010 or 2012, and so they wish to make a little political hay during the summer months by keeping the issue on the House floor.

But my question is more about who is behind all these attempts to gut the bill. The key is the the employer mandate applies to companies with 50 or more employees. Specifically, companies that may have thousands of employees.

What many Americans may not know is that the PPACA law includes something called the non-discrimination clause. This has nothing to do with the color of a policy-holder's skin or what religion he or she believes in.

As it is now, companies can design deluxe healthcare plans for executive employees,as long as the plan was fully insured. But the non-discrimination clause in Obama-Care applies to ALL group healthcare plans, in terms of eligibility or benefits. The fact is that current healthcare plans treat different groups of employees differently. Most people are aware that the top brass gets the best perks package in the company. But most people may not be aware that even their healthcare plans are different, and that the PPACA specifically bars this and penalizes this practice.

First let us define the term “highly compensated” employees. This group includes the five highest-paid officers of the company, the shareholders who own 10 percent or more of the company, and all employees among the top 25 percent of all the company's employees.

Violators of the non-discrimination rules will be subject to stiff fines. This starts at $100 per day, per “failure penalty” – which will likely apply to each NON-highly-compensated employee who is left out of the cushy coverage plans. The company is also vulnerable to a civil lawsuit to compel it to provide the same upscale coverage plan to the non-covered employees.

Multiply that $100 per day per non-covered employee for a large multinational corporation, and you are talking about a significant hit to the corporate pocketbook. For a company with say, 500 employees, this easily adds up to a fine of $37,500 PER DAY. This is where I believe the pressure is coming from on House members to keep trying to negate provisions of the PPACA law.

Corporate America really believes that the executive class has to be lured to work for a given company with the most extraordinary gold-plated perks of every kind. Not being able to offer a healthcare plan that has no deductibles and no copays seems like a small loss when they are offering a company car, country club and health club and golf club memberships, the proverbial key to the executive washroom, stock options, and much more.

The employer mandate is being delayed for one year with White House permission. And the government has stated that there will be a phasing-in period where employers will be given time to make adjustments before the government begins sanctioning those that do not comply. But still I would not be surprised if corporate America tries to get all current healthcare plans to be grandfathered under the law, thereby escaping all sanctions and fines entirely. 

Why health insurance premiums are tumbling in New York under Obama-Care

By LAS

The Washington Post of July 17 reports that health insurance premiums in New York state will plummet under PPACA (aka ObamaCare) provisions – some at least by half and some to as little as a third of the cost before controls take effect.

According to the Post, “Individuals in New York City who now pay $1,000 a month or more for coverage will be able to shop for health insurance for as little as $308 monthly,” Roni Caryn Rabin and Reed Abelson report. “With federal subsidies, the cost will be even lower.”

New York has had a law since 1993 that insurers have to accept anyone who applies for a health care insurance policy, no matter what kind of pre-existing condition they might have. That explains the highest premiums in the country. In fact, the Post explains it in scintillating simplicity thus: “New York has, for 20 years now, been a long-running experiment in what happens to universal coverage without an individual mandate. It’s the type of law the country would have if House Republicans succeeded in delaying the individual mandate, as they will vote to do this afternoon. The result: a small insurance market with very high insurance premiums.” (my bold)

However, now that some of the provisions of the PPACA law are taking effect, healthy individuals who had believed that they would always be healthy and never have to have medical care, will now be contributing to the pooled coverage, and bringing the average cost of healthcare (AND insurance premiums) down. Yes, DOWN.

That is why the House attempts to gut the individual mandate are very disturbing and will only serve to undermine the promised savings of the program. So far, the Senate has not caved in to Republicans or to the corporate pressure to delay or delete sensitive provisions of the PPACA program. Let's hope it stays that way!

[For original story in the Washington Post, you may go to http://www.washingtonpost.com/blogs/wonkblog/wp/2013/07/17/heres-why-health-insurance-premiums-are-tumbling-in-new-york/ ]

Another End-Run Around ObamaCare that Employers May Try: Cutting Hours Down to Part-Time

By LAS

It is well for workers to be aware that if ObamaCare does in fact become the law of the land for group plans as currently scheduled, employers may try yet another end-run to get out of having to comply – a risky end-run, but nevertheless, they could be tempted to try it.

That end-run is to cut affected employees' hours to less than the mandated 30 hours-per-week work schedule which triggers qualification for benefits.

I am told that “countless” employers and advisors are seriously considering this game-playing, this strategy to undercut the unpopular (among corporations) costs of ObamaCare.

However, employees who face loss of eligibility for any benefit should know that this may trigger legal ramifications that could prove costly to the employer if he should try this strategy. 

Employees are covered by provisions of the ERISA law – specifically, Section 510 (which in turn refers back to Section 502).

The pertinent paragraph of ERISA Section 510 states:

“It shall be unlawful for any person to discharge, fine, suspend, expel, discipline or discriminate against a participant or beneficiary for exercising any right to which he is entitled under the provisions of an employee benefit plan – or for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan.”

Aha! We gotcha now, you think. Well, maybe – depending on how much of a junkyard dog your attorney is.

Now, this is not affected by a short-term cut in hours due to a slow period. Many industries have slow periods in the spring or summer, and then ramp up sharply for the fall or winter. This is true of retail, for example, or of the tire business.

BUT if the SINGLE MOTIVE for cutting hours is to deprive employees of qualifying for any employment benefit – which includes ObamaCare – then the company faces legal shaky ground and fines for doing so.

The company stands to be assessed penalties for violating ERISA law. The Department of Labor can assess these fines if the company is found guilty of violating ERISA law, and these penalties are assessed FOR EACH INSTANCE of such violation of the law. Put into other words, the company will have to pay for each employee affected by their shenanigans.

How do you go about exercising your rights under the ERISA law? First you have to start a civil action against the company complaining of the loss of your ERISA rights, or complaining of their retaliation for exercising your rights under ERISA.

Keep a little diary or journal for each day from the moment that the company announces that some employees will have a cut in hours. Keep copies of any newsletters or memos related to this action. Note how many hours a day you worked. Keep this and other pertinent papers together in a little file or large envelope.

And good luck!

We Will Have to Watch Congress like Hawks to Keep Them from Repealing ObamaCare

by LAS

While the current political situation (i.e. – factional infighting) keeps any one party from being able to repeal the Affordable Care Act outright – that will not stop them from attempting the “death by a thousand cuts.” In other words, according to the National Association of Underwriters (an arm of the insurance industry), lobbyists will attempt to get individual provisions of the act repealed by inserting lines into other bills.

The insurance industry will be working with friendly members of Congress to insert language repealing just one given provision of the Affordable Care Act into bills that may about entirely unrelated matters. And they will do this for each provision of ObamaCare until it looks like Swiss cheese and totally useless for providing healthcare to those who need it.