Health Reform Weekly

MICHIGAN:  In the next couple of weeks, the state Senate is expected to vote on a $400 million paid-claims tax that would be levied on insurers and third-party administrators as proposed by Governor Snyder. 

Specifically, the bill would establish an entirely new tax on health insurance claims as a way to match federal Medicaid funding. The 1 percent on tax on all medical claims paid under health, dental, automobile and workers' compensation coverage would impact fully and self-insured business. Ultimately, the cost of the tax will be borne by the sponsor of that coverage – the employer or the individual who already pays for the coverage. As introduced, the tax would begin on October 1, 2011. 

While working with lawmakers to help them understand the impact the tax would have on constituents, Aetna has mobilized its grassroots employee network to contact their state legislators regarding the issue. The bill has a strong chance of passing, and Aetna is urging all its constituents in the state to contact the Governor’s office and legislators to express any concerns they may have about the tax.

This would be a good time to contact your local and state representatives opposing this legislation and avoiding additional increases in insurance premiums.

Week of June 6, 2011

While the Affordable Care Act's (ACA) medical loss ratio (MLR) and rate review provisions have been getting most of the media attention, a new coalition of business organizations has come together to draw attention to another important requirement of the ACA. Calling themselves Stop the HIT on Small Business, more than 25 national business organizations have joined forces to work toward repeal of new taxes the ACA would impose on private health insurance starting in 2014. Business leaders behind the effort say that small business owners, their employees and the self-employed will ultimately bear the brunt of $87 billion in additional health care costs in the first 10 years as a result of the new taxes. The group is planning Capitol Hill outreaches and grassroots efforts.

Please keep in mind, these are increases in taxes above those called for in the Health Care Reform Act already made law.

Winthrop & Gray’s Health Care Reform reminders

Winthrop & Gray’s Health Care Reform reminders, up dates and timeline.

2011

Insurance Reforms

New uniform coverage documents and standard definitions developed (applicable in 2012).

Minimum medical loss ratios required.

Medical Reforms

Medicare Advantage cost-sharing limits take effect.

Medicare beneficiaries who reach the "donut hole" get a 50 percent discount on brand-name drugs.

Primary care doctors and general surgeons practicing in underserved areas, such as inner cities and rural communities, get a 10 percent Medicare bonus.

Medicare Advantage plans begin restructuring of payments and freeze 2011 payments at 2010 levels.

Other

The voluntary long-term care insurance program starts. The program provides a cash benefit to help those with disabilities stay in their homes or pay nursing home costs. Benefits start five years after paying the coverage fee.

Increased funding for community health centers to provide care for many low-income and uninsured people.

Costs for over-the-counter drugs not prescribed by a doctor excluded from being reimbursed through an HSA or FSA.

Employers may report the value of health care benefits on employee W2 tax statements (optional for 2011 tax year; mandatory thereafter).

Start of new annual fees on pharmaceutical manufacturing sector.

2012

Health System Changes

Hospitals, doctors, and payers encouraged to join forces in "accountable care organizations."

Hospitals with high rates of preventable readmissions facing reduced Medicare payments.

2013

Taxes/Deductions

Individuals making $200,000 a year or couples making $250,000 would have a higher Medicare payroll tax of 2.35 percent on earned income - up from the current 1.45 percent. A new 3.8 percent tax on unearned income, such as dividends and interest, also added.

Contributions to flexible spending accounts (FSAs) limited to $2,500 a year - indexed for inflation. And the threshold for deducting medical expenses on taxes goes from 7.5 percent to 10 percent of income.

Medical device manufacturers have a 2.9 percent sales tax on medical devices, with exemptions for some, like eyeglasses, contact lenses and hearing aids.

No more deduction for expenses allocable to Medicare Part D subsidy for employers who maintain prescription drug plans for their Medicare Part D-eligible retirees.

For more information on how Health Care Reform may impact your care or your business

contact Allen Beach at Winthrop & Gray Company 800-258-1598.

News in the IRS

The IRS has just issued Revenue Procedure 2011-32, which provides the 2012 cost-of-living contribution and coverage adjustments for HSAs, as required under Code Section 223(g). Most contribution limits and the out-of-pocket amounts have been increased for 2012.
HSA Contribution Amounts

2006     2007     2008    2009   2010/2011  2012     Coverage Levels
$2,700  $2,850  $2,900   $3,000   $3,050   $3,100      Individual

$5,450  $5,650  $5,800   $5,950     $6,150  $6,250        Family

$  700   $   800   $  900   $1,000     $1,000   $1,000      Catch-up

Max. Out-Of-Pocket Amounts for HDHP
$5,250 $5,500  $5,600    $5,800     $5,950    $6,050     Individual

$10,500 $11,000 $11,200 $11,600 $11,900  $12,100   Family

Min. Deductible Amounts for HDHP
$1,050  $1,100   $1,100   $1,150    $1,200    $1,200    Individual

$2,100  $2,200   $2,200    $2,300   $2,400     $2,400    Family

For a copy of Revenue Procedure 2011-32, please click on the link below:
 
http://www.irs.gov/pub/irs-drop/rp-11-32.pdf

Winthrop & Gray’s Health Care Reform reminders

2011
Insurance Reforms

New uniform coverage documents and standard definitions developed (applicable in 2012).

Minimum medical loss ratios required.

Medical Reforms

Medicare Advantage cost-sharing limits take effect.

Medicare beneficiaries who reach the "donut hole" get a 50 percent discount on brand-name drugs.

Primary care doctors and general surgeons practicing in underserved areas, such as inner cities and rural communities, get a 10 percent Medicare bonus.

Medicare Advantage plans begin restructuring of payments and freeze 2011 payments at 2010 levels.

Other

The voluntary long-term care insurance program starts. The program provides a cash benefit to help those with disabilities stay in their homes or pay nursing home costs. Benefits start five years after paying the coverage fee.

Increased funding for community health centers to provide care for many low-income and uninsured people.

Costs for over-the-counter drugs not prescribed by a doctor excluded from being reimbursed through an HSA or FSA.

Employers may report the value of health care benefits on employee W2 tax statements (optional for 2011 tax year; mandatory thereafter).

Start of new annual fees on pharmaceutical manufacturing sector.

2012
Health System Changes

Hospitals, doctors, and payers encouraged to join forces in "accountable care organizations."

Hospitals with high rates of preventable readmissions facing reduced Medicare payments.


2013
Taxes/Deductions

Individuals making $200,000 a year or couples making $250,000 would have a higher Medicare payroll tax of 2.35 percent on earned income - up from the current 1.45 percent. A new 3.8 percent tax on unearned income, such as dividends and interest, also added.

Contributions to flexible spending accounts (FSAs) limited to $2,500 a year - indexed for inflation. And the threshold for deducting medical expenses on taxes goes from 7.5 percent to 10 percent of income.

Medical device manufacturers have a 2.9 percent sales tax on medical devices, with exemptions for some, like eyeglasses, contact lenses and hearing aids.

No more deduction for expenses allocable to Medicare Part D subsidy for employers who maintain prescription drug plans for their Medicare Part D-eligible retirees.


For more information on how Health Care Reform may impact your care or your business
contact Allen Beach at Winthrop & Gray Company 800-258-1598.

Public Sector vs. Private Sector!!!

Why is there a huge debate in the State of Michigan between the public sector and private sector?

Please click here and you'll have your fact based reasons why. It's time for a drastic change in how our public sector employed citizens are compensated.

We just cannot afford bloated compensation packages for this sector anymore. Not only are the Tea Party groups revolting but so are all Michigan's hard working private sector tax payers.

It's time the burden of sacrifice is shared by the public sector
citizens as well as the ruling class of politicians that support them.

Please go to www.itpp.us for more facts and information about the Public  Sector vs. Private Sector battle that is taking place in Michigan and throughout our great country.

IRS Issues Interim Guidance on Informational Reporting of Employer-Sponsored Health Coverage

IRS Issues Interim Guidance on Informational Reporting of Employer-Sponsored Health Coverage; Reporting is Voluntary for All Employers for 2011 and Small  Employers for 2012


WASHINGTON - The Internal Revenue Service today issued interim guidance to employers on informational reporting on each employee's annual Form W-2 of the cost of the health insurance coverage they sponsor for employees. The IRS is also requesting comments on this interim guidance. The IRS emphasized that this new reporting to employees is for their information only, to inform them of the cost of their health coverage, and does not cause excludable employer-provided health coverage to become taxable; employer-provided health coverage continues to be excludable from an employee's income, and is not taxable.


The Affordable Care Act provides that employers are required to report the cost of employer-provided health care coverage on the Form W-2. Notice 2010-69, issued last fall, made this requirement optional for all employers for the 2011 Forms W-2 (generally furnished to employees in January 2012). In today's guidance, the IRS provided further relief for smaller employers (those filing fewer than 250 W-2 forms) by making this requirement optional for them at least for 2012 (i.e., for 2012 Forms W-2 that generally would be furnished to employees in January 2013) and continuing this optional treatment for smaller employers until further guidance is issued.
 
Using a question-and-answer format, Notice 2011-28 also provides guidance for employers that are subject to this requirement for the 2012 Forms W-2 and those that choose to voluntarily comply with it for either 2011 or 2012. The notice includes information on how to report, what coverage to include and how to determine the cost of the coverage.
The 2011 Form W-2, prior IRS Notice 2010-69 deferring the reporting requirement for 2011, and Notice 2011-28 containing the new guidance are available on IRS.gov.

Labor Law Protects Employees' Rants on Facebook

 Here's a recap of the case: After a dispute in the workplace involving a customer complaint, employee Dawnmarie Souza posted a negative remark about her supervisor on her personal Facebook page. This drew supportive responses from coworkers. Those responses then led to more negative comments from Souza about the supervisor.

Souza's employer, the American Medical Response (AMR) ambulance firm, suspended her and later terminated her because of her Facebook postings.

The AMR blogging and Internet posting policy included these statements:

"Employees are prohibited from posting pictures of themselves in any media, including but not limited to the Internet, which depicts the Company, in any way, including but not limited to any Company uniform, corporate logo or an ambulance, unless the employee receives written approval... in advance of the posting...

"Employees are prohibited from making disparaging comments or discriminatory or defamatory comments when discussing the Company or the employee's superiors, co-workers, and/or competitors."

The NLRB filed an unfair labor practice complaint against the Connecticut company.

The NLRB asserted the National Labor Relations Act (NLRA) gives all employees the right to discuss with other employees such work issues as pay, benefits, and working conditions. These discussions on work conditions and work issues are protected activities. In the case against AMR, the NLRB argued an employee's comments about a supervisor and about an employer, posted on a social media site like Facebook, is protected concerted activity when it involves comments and responses between coworkers.

The NLRB alleged the ambulance company illegally terminated Souza for violating the company's policy prohibiting employees from describing the company "in any way" on the Internet without company permission. The NLRB described the company's policy as overly broad.

A settlement is reached: In a private settlement between AMR and Souza, the employer has agreed to back off from its restrictions on employees' expressions of workplace issues outside the workplace.

The NLRB issued this statement about the settlement:

"Under the terms of the settlement... the company agreed to revise its overly broad rules to ensure that they do not improperly restrict employees from discussing their wages, hours and working conditions with co-workers and others while not at work, and that they would not discipline or discharge employees for engaging in such discussions.

"The company also promised that employee requests for union representation will not be denied in the future and that employees will not be threatened with discipline for requesting union representation." [The employee in the case, Dawnmarie Souza, was a member of the Teamsters union and the Teamsters represented her before the NLRB.]

Meaning to employers: The settlement between AMR and the NLRB strengthens the NLRB's position that employers can overreach in attempts to prevent employees from discussing matters relating to their work.

[NOTE: Information and guidance in this story is intended to provide accurate and helpful information on the subjects covered. It is not intended to provide a legal service for readers' individual needs. For legal guidance in your specific situations, always consult with an attorney who is familiar with employment law and labor issues.]