Tuesday, August 27, 2013

Plumber? Attorney? Government Flack!

I have a quick question for the business owners in the audience – How’s it going? Been busy? Terrific. I hate to bother you, but the U.S. Government has another job for you. You are going to help steer Americans to the new Health Insurance Exchanges. And by the way, the gig starts today.

The legislators and staff who gave us The Patient Protection and Affordable Care Act (PPACA) may not have known anything about health insurance, but they were experts in the federal bureaucracy. The PPACA’s home address may be the Department of Health and Human Services (HHS), but the Internal Revenue Service, the Department of Labor and other federal agencies are involved with the implementation. The law has metastasized and can now be found throughout the government, which makes the raw meat mantra of defunding “Obamacare” that much more cynical.

So Mr. or Ms. Business Owner, how are YOU involved? This next section is from the Department of Labor’s website. It is safer to print this exactly as it appears rather than to paraphrase the governmentese and miss something.

Background On The Notice to Inform Employees of Coverage Options Under the FLSA

Section 18B of the FLSA, as added by section 1512 of the Affordable Care Act, generally provides that, in accordance with regulations promulgated by the Secretary of Labor, an applicable employer must provide each employee at the time of hiring (or with respect to current employees, not later than March 1, 2013), a written notice:
  1. Informing the employee of the existence of the Marketplace (referred to in the statute as the Exchange) including a description of the services provided by the Marketplace, and the manner in which the employee may contact the Marketplace to request assistance;
  2. If the employer plan's share of the total allowed costs of benefits provided under the plan is less than 60 percent of such costs, that the employee may be eligible for a premium tax credit under section 36B of the Internal Revenue Code (the Code) if the employee purchases a qualified health plan through the Marketplace; and
  3. If the employee purchases a qualified health plan through the Marketplace, the employee may lose the employer contribution (if any) to any health benefits plan offered by the employer and that all or a portion of such contribution may be excludable from income for Federal income tax purposes.
On January 24, 2013, the Department of Labor (the Department) issued guidance stating the Department’s conclusion that the notice requirement under FLSA section 18B will not take effect on March 1, 2013 for several reasons.(2) The Department explained that this notice should be coordinated with HHS's educational efforts and Internal Revenue Service (IRS) guidance on minimum value. The guidance also stated the Department’s commitment to a smooth implementation process including providing employers with sufficient time to comply and select an applicability date that ensures that employees receive the information at a meaningful time. The guidance further stated that the Department expects the timing for distribution of notices will be the late summer or fall of 2013, which will coordinate with the open enrollment period for the Marketplace.

The Department is issuing this temporary guidance and model notice in advance of the expected timeframe announced in the guidance because, since the issuance of the guidance, the Department has received several requests from employers for a model notice on an earlier timeframe so that they may be able to inform their employees now about the upcoming coverage options through the Marketplace. Therefore, employers are permitted to use the model notice and/or rely on this temporary guidance prior to the applicability date stated below(3) to inform their employees earlier.

OK. How about in English?

Employers must provide a notice to each employee about the new Exchanges. There is no clear exemption for small businesses. Some parts of the health care laws apply to businesses with over 50 employees. There are rules for businesses with 20 employees. This regulation applies to businesses with as few as ONE employee.

The Department of Labor has, thankfully, created a pair of model documents. This link takes you to the form to use if you provide health insurance for any of your employees. This link is to the form for those employers who don’t.

Both forms advise the employee that he/she may save money by purchasing health insurance on the Exchange. Both direct the employee to the government’s healthcare.gov website (the home of the internet’s largest collection of pictures of happy people). Both forms ask who at this business may be contacted to confirm information should the employee choose to apply for coverage on the Exchange. And if the employer provides coverage, there is a third page that asks the business to voluntarily provide additional information. Don’t volunteer.

What are the penalties for failing to comply? I have no idea. I gave up looking for that. I am preparing the forms for my clients. Some businesses are sending out blank forms. That would not appear to comply with the law.

How does a small business that doesn’t offer health insurance, and thus doesn’t have an agent, know to provide this form to its employees? You’re reading it. Click on the link and access the form. And how many of your people will sign up for coverage through the new Exchanges? We’ll set sales goals next week.


Visit the website - www.bcandb.com

Sunday, August 18, 2013

You Put Your Left Foot In

It was Chicken Cordon Bleu prepared by a lifelong vegetarian. It was a doctoral thesis that had been assigned to an illiterate. It was how I spent four hours and ten minutes Saturday evening. It was the federal government’s online classes for agents and brokers. People who have never purchased nor sold a health policy created these three courses:
  • Affordable Care Act and Marketplace Basics
  • Individual Marketplace Course
  • SHOP Marketplace Course
I read. I passed the quizzes. I aced the tests. I am now qualified to sell policies that are still waiting for approval on a platform that has yet to be created. Welcome to health insurance August 2013.

The Patient Protection and Affordable Care Act (PPACA) mandates that individual health policies will be available through Exchanges. Because you can never find an insurance agent when you need one, Exchanges were to be created by every state as a way for Americans to efficiently shop for health insurance. If a state balked at the potential cost or hassle (or at, G-d forbid, appearing to in any way help implement “Obamacare”) the federal government was empowered to create its own Exchange or a state / federal hybrid. Ohio has opted for the hybrid.

The PPACA mandates Exchanges, but in a widely misunderstood and disliked law, the concept of Exchanges ranks near the bottom of consumer and employer acceptance. So the marketers at the U.S. Department of Health and Human Services (HHS) have given us a new term – Marketplace.

What is a Marketplace? Think Exchange.

Today I learned how we in Ohio, which once had hundreds of choices for small group health insurance, will now have more choices even if the actual number of options is way less. Go ahead and re-read that sentence as many times as necessary until it makes sense. I also learned that there are only nine easy steps for a small employer (2-50 employees) to purchase health insurance coverage for his/her employees through the SHOP Exchange.

The individual Exchange is one way someone can purchase personal health insurance coverage. Why bother with the Exchange? $$$$ Individuals and families earning between 100% to 400% of the federal poverty level will qualify for subsidies. You have to go through the Exchange to qualify for the subsidy. Well over 50% of all applicants will get some premium assistance.

You can almost hear the border collies herding everyone to the pens.

We have been promised a single, streamlined form that could be completed by an individual, done over the phone with a government employee, or prepared online. The online version sounds like it will be the easiest option. The insurance shopper will be able to do this alone, with a qualified agent, with the yet to be fully defined Navigator, or with a volunteer.

The form will ask:
  • Your name
  • Your date of birth
  • Your address
  • Your citizenship / residency status
  • Your marital status
  • Do you smoke
  • Are you incarcerated
  • Your Social Security Number
  • Your income
  • Do you have access to a qualified, affordable health plan at work
Are you eligible for government provided health care
And of course, if they are covering any of your family they will need all of the above for them. The form has yet to be released. There may be more questions on the actual form.

The government will verify your answers through the appropriate agencies and determine your eligibility. Once you are advised of the amount of your subsidy, you may begin to shop for insurance.

A large portion of today’s classes dealt with how to safeguard the PII, Personally Identifiable Information. We have been protecting our clients personal information for years. My office is safe. My records are private. The government should do so well. What has yet to be determined is how the Navigators and volunteer organizations will protect the taxpayer information that will be routinely collected.

Four hours of this silly dance. I suspect that I’ve got another hour with the feds next week. The State of Ohio will have its own class sometime in September. If this is a war of attrition, they’ve picked a fight with the wrong guys. Thirty-five years in the business, I’m ready for the marathon. But I am frustrated with the Hokey-Pokey.



Saturday, August 10, 2013

How Do You Spell "Knife"?

There was a time when children would ask a parent or a teacher how to spell a particular word. The adult would inevitably send us to the dictionary. This would often prove to be a lesson in self-reliance, problem solving, and phonetics. But English being English, a dictionary search could also be a frustrating waste of time.

Senator Sherrod Brown invited me to a seminar. The invitation stated that he was bringing the U.S. Department of Health and Human Services to Cleveland on August 8, 2013 to answer questions about the Marketplaces or Exchanges. I emailed my RSVP within minutes of receiving the invitation.

We have all seen a young cheerleader whoop it up after her side’s quarterback has thrown an interception, totally unaware of the gravity of the situation. Well, in the last few weeks I have been on two phone conference / webinars with the Centers for Medicare and Medicaid Services (CMS). As previously noted, the government employees hosting the meetings were woefully unprepared. Cheerleading permeated each seminar. After a basic slide show presentation high on platitudes but almost bereft of facts, questions were thrown to the hosts, who, like the Browns’ receivers, quickly dropped them. These meetings were frustrating wastes of time.

I was counting on Senator Brown to host an informative meeting. Based on the email address, I could tell that this invitation was sent to his supporters, people who had worked on the campaigns and maybe even donated to his campaigns in the past. This was going to be a friendly crowd.

The seminar was scheduled for 5:30 – 7:00 PM at The City Club. That lack of awareness should have been a tip-off. His staff didn’t know that the Browns were playing their first preseason game that night or that the Indians were hosting a Dollar Dog Night game against the Detroit Tigers. Both a few blocks away.

By the way, it shouldn’t be necessary to note this, but the Patient Protection and Affordable Care Act (PPACA) lives at the U.S. Department of Health and Human Services (HHS). Senator Brown bringing in HHS should be the equivalent of having a Supreme Court Justice explain the Constitution.

Wrong Again

Arriving at 5 PM, I knew I had wasted my time the moment I walked into the empty room. Instead of the Senator and an advance team, I saw a couple of staffers and Sherrod on a screen in the front of the room. All they had to do is hit play and we would be treated to a quick canned intro from the Senator. If this presentation wasn’t going to be good enough for him to show, I already knew that I had blown $20 on parking.

The room was eventually filled with leaders of various not-for-profits, Democratic activists, and the terminally confused. There were only three insurance agents in the room. The vibe was positive right up until the presentation started.

Our young presenter was from Chicago. We knew this because she mentioned it, and her need to catch a plane, frequently. Being from out of state was a double liability for her. She was not prepared to discuss the new regulations and she was often wrong about the Ohio health insurance marketplace. Worse, the audience quickly sensed her numerous shortcomings.

Ms. Chicago may have left her pom poms at home, but she was a determined, if not talented, cheerleader. She begged the audience to remember www.healthcare.gov. Begged is not an exaggeration. She told us that the government’s website is the answer to every question you could possibly have about health care and the solution to ANY problem you may ever encounter.

I was sitting next to the executive director of one of the dread disease foundations. My tablemate, a young woman in her early thirties, quickly grew frustrated with our presenter’s mistakes, inability to answer the most basic of questions, and repetition of the website address.

If someone representing the U.S. Department of Health and Human Services can’t answer a basic question, who can? I asked a question about the Personal Responsibility Fee, which is the new Orwellian way to say the Individual Mandate. I won’t bore you with the question. She couldn’t answer it. Worse, she said that the answer would have to come from the Internal Revenue Service. THAT IS WRONG. The IRS may have a hand in administering the PPACA, but HHS is writing the rules.

But we still have the website. Good luck finding the answer to your questions there. And we still have dictionaries. The huge Webster’s Encyclopedic Unabridged Dictionary of the English Language sitting on my bookshelf may have almost every word in the English language, but it is still a challenge to find the correct spelling of some words. Sometimes it’s darn near impossible. Don’t believe me? Have your child look up "knife".



Friday, August 2, 2013

Everybody's Happy!

A billion here, a billion there, and pretty soon you're talking real money.
Senator Everett McKinley Dirksen (1896-1969)

The new rates are out!  The new rates are out!  The Cleveland Plain Dealer reported today (won’t be able to say that much longer) that we finally have the new individual rates under the Patient Protection and Affordable Care Act (PPACA).  These are the prices that Ohioans will pay if they purchase coverage through the new exchanges.  And everyone is thrilled.  Positively giddy.

Mary Taylor, Lt. Governor and Insurance Commissioner, announced that our rates will be going up an average of 41%.  The Ohio Department of Insurance is projected our average adult premium will be $332.58 per month.  The Democrats were happy since they were worried that the number was going to be higher.  The Republicans were celebrating another opportunity to complain about escalating costs.  And average Ohioans, numb from way too many political ads last November and the recent budget shenanigans, chose to focus on the streaking Cleveland Indians.

Of course, loving the numbers wasn’t really good enough for either side.  Thankfully there are plenty of chances to evangelize their message and fight with the other side.  And everyone has a dog in this fight.

Approximately 80 – 90 percent of the people purchasing policies on the public exchange will qualify for a subsidy from the federal government.  As we have discussed previously, the federal government will help you pay your health insurance premium if you earn between 100% - 400% of the federal poverty rate.  That means if you earn less than $45,960 as a single or $94,200 as a family of four, you may qualify for assistance if your employer doesn’t provide adequate group health insurance.

The left is happily furious that Ms. Taylor reported the real number, $332.58, and not what someone might pay if he/she qualifies for a subsidy.  The Plain Dealer article notes that a 30 year old making $30,000 per year would have a premium of $285 per month, but that the federal government would cover $76 of that monthly fee.  Our hypothetical 30 year old would really have a premium of $209 per month.

At the risk of appearing to take sides – BALONEY!

1. The premium really is $285.  Some of it will be paid by the insured and the rest will be paid, in real dollars, to the insurance company.
2. That $76 is actually $912 in year one.
3. President Obama postponed the employer mandate, the tax that was scheduled to cover the cost of subsidizing the individual policies.
4. The uninsured 30 year old that was in my office yesterday was thrilled to acquire a health policy for $92.39 per month.  She would not have purchased a $209 policy.  And yes, coincidentally, she is a hairdresser making $30,000 a year.

The good news is that if my 30 year old hairdresser is forced to purchase a policy through the exchange next year, she will be acquiring maternity coverage at no additional cost.  She doesn’t think that she needs it, but it couldn’t hurt.  My healthy thirty year old male clients are looking at larger price bumps without a meaningful increase in benefits.

The Patient Protection and Affordable Care Act was supposed to be revenue neutral.  Sure there were costs associated with implementing the bill, but there were sources of revenue, too.  The first to disappear was the CLASS ACT, a program that was to pay for long term care eventually but front-load some early money for the PPACA.  That program ended almost two years ago.  The real money stream was to come from the employer mandate.

The nonpartisan Congressional Budget Office has estimated that delaying the employer mandate will cost us $12,000,000,000.  The Washington Post also reports that the CBO estimates that as many as 1 million fewer people will be insured due to the delay.

While the left denied the existence of mathematics, the right pretended that everyone in our country has access to comprehensive health care.  Blinders on and fully aware that their actions are equivalent to doing nothing, the Republicans of the U.S. House of Representatives voted today for the 40th time to repeal all or most of Obamacare (PPACA).  Then they went home for the summer recess.  This vote was so irrelevant that the major new outlets ignored it.

But back to Ohio.  Our rates are going up, but it could have been worse.  If you are unhealthy, pregnant, or earning less than 400% of the federal poverty level, the policies may prove to be a good deal.  And if you’re not, well the Indians are 60 – 48.