Benefit Blog

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.

By Ric Joyner

eflex employees were told in meetings of the Senate Finance Committees plans to eliminate or cap employer tax breaks on employee benefits. After sharing this information with employees, and the impact that the cuts would have on them, they immediately asked what they could do to help. Then we let them know that flex plans (FSAs) could lose its tax savings and eliminate our industry! Of course they were upset and began to let their voices be known to their Congressional Representatives.  www.house.gov and www.senate.gov

Here is the video the staff put together. http://www.youtube.com/watch?v=pFOrHR637Qo&feature=channel_page

Please consider writing your representative. Here is a step by step guide.

http://napba.org/Flexplan.html

For a survey that you can send to your clients and they can pass on to their employees: http://www.zoomerang.com/Survey/?p=WEB229BAUR6MBC We are including this survey on each of our emails to customers and to clients. We will collect the data and send along to Congress.

Thanks again and pass this information along to clients, friends, and colleagues!

June 19, 2009

By DAVID HOGBERG
Investor’s Business Daily

Even as health care reform slows in the Senate over huge program costs, House Democrats doubled down Friday, betting on a more-expansive plan while offering few clues on how to pay for it.

Members from the House Ways and Means; Education and Labor; and Energy and Commerce committees released a "discussion draft" bill that reads like a reform wish list that will appeal to the Democrats’ base. It includes a public plan, a Medicaid expansion, subsidies for those up to 400% of the federal poverty level, and individual and employer mandates. Democrats expect it to cover about 95% of Americans.

It also might prove more costly than those of Sen. Ted Kennedy, D-Mass., and Sen. Max Baucus, D-Mont. The Congressional Budget Office estimated that those bills would each cost over $1 trillion, while leaving tens of millions of people without coverage.

That sent Baucus back to the drawing board, announcing his Finance Committee would delay its hearings until after July 4.

He isn’t the only one pushing dates back. President Obama has backed off his July 31 deadline for getting a reform bill to his desk.

"I don’t think it’s a surprise that this is going to take some time to do. It’s an issue that we’ve been discussing for 40 years," said White House spokesman Robert Gibbs. "The president isn’t pessimistic about being able to get this through Congress this year."

House Bill’s Cost Unknown

The CBO has yet to score the cost of a public plan or increasing Medicaid eligibility to 133% of the federal poverty level, as the House Democrat plan proposes.

Energy and Commerce Chairman Henry Waxman, D-Calif., said, "We’re going to pay for this bill. We’re going to pay for it by cutting down on expenditures in public programs like Medicare and Medicaid, and by reforms in the system that will hold down costs for everyone. And we’re going to pay for it with revenues."

On the latter point, Ways and Means and other House panels are mulling a variety of tax hikes to pay for health care, including a value-added tax and a soda levy.

Tax hikes could be politically poisonous and cut the legs out from a tentative economic recovery. But the public also is increasingly worried about soaring budget deficits.

Also, a health plan would need 51 Senate votes if it’s fully paid for — but 60 if it’s not.

A previous CBO report concluded that some Democrat reforms would save money. The employer mandate and community rating would increase federal revenues by $48 billion and $5 billion, respectively, over 10 years. Requiring drugmakers to give the same rebate to Medicare Part D that they give to Medicaid would save $110 billion.

But the Democrats’ plan increases costs by closing the "donut hole" in Medicare Part D and eliminating annual Medicare physician payment cuts. CBO estimated that doing the latter would cost at least $318 billion over 10 years.

Rep. Frank Pallone, D-N.J., chairman of the Energy and Commerce health subcommittee, was noncommittal on the cost of reform.

"We haven’t figured out exactly where we want that line to be," he said when asked if the House would have to keep the cost at about $1 trillion. "A lot may depend on the level of cuts and savings. We don’t have CBO scores, so we really can’t say at this point."

Baucus Balks

CBO scoring compelled Sen. Baucus to rework his plan. A new draft leaked to the media showed he had cut subsidies from 400% of poverty to 300% and Medicaid’s expansion from 150% of poverty to 133%.

Liberal Washington Post blogger Ezra Klein took the CBO score of the Baucus plan as a bad sign. "(H)ealth reform has just gotten harder. The hope that we could expand the current system while holding costs down appears to have been just that: a hope."

At least one key House lawmaker seems unfazed.

"Everything is on the table. Nothing is locked in cement," said Ways and Means Chairman Charles Rangel, D-N.Y. "I’ve been here a long time. We’ve got momentum."

By Ric Joyner, CEBS, GBA, CFCI

The Senate Finance Committee today noted they are delaying release of their version of the bill until after the July 4th recess. For information regarding the announcement go to: http://www.washingtonpost.com/wp-dyn/content/article/2009/06/17/AR2009061703490.html?hpid=moreheadlines

The good news for this delay is it allows time for greater debate on the magnitude of the effect of any bills. This also increases the chances that a bill will not be signed on Obama’s timetable by October. We still  have time to make our voices heard.

Don’t forget the webinar on “how to lobby” on Friday June 19th at noon central.

Space is limited.
Reserve your Webinar Seat Now at:
https://www1.gotomeeting.com/register/982420928

CDHealthWire For CD Market Report Subscribers ©

Subscriber: EFLEXGROUP      Tuesday June 16, 2009

ALERT: Finance May Double HSA Tax

The Wall Street Journal reported this morning that an option to double the withdrawal tax on non-medical HSA transactions from 10% to 20% is being considered in the final Senate Finance Committee bill. The idea has been talked about over the past several months, but it is the first time HSA changes have been leaked publicly by committee staff in the final cuts. It’s not clear if this is a trade-off for dropping claims substantiation or in addition to the mandate.

© 2009 Interpro Publications Inc. (Washington)

NAPBA Webinar on June 19th at 12.00 pm - 1.00 pm Central Standard

Flexible Spending Accounts are targeted as a way to finance health care reform. You listen and read the reports but what can you do about it? Much! This webinar will give you the tools to make your voice known. Flexible Spending Accounts (FSAs) have helped employees, and employers save tax dollars. Removing FSAs will be a tax increase on working employees and President Obama promised tax breaks during his campaign! We need to communicate the value of FSAs to our legislators and enlist the support of our clients.

Please plan on attending to gain insight into the political process, how to use tools in communication to legislators, and learn the next steps.

Our industry and your tax savings may be lost. The time is now for you to make your voice heard. We will show you how.

Please pass this email on to brokers, clients, employees and colleagues.

Space is limited.

Reserve your Webinar seat now at:
https://www1.gotomeeting.com/register/982420928

By Mark Stember, JD

Clients and Colleagues:

Some of you have been asking for a “non-technical” read of the current health care reform / tax debate.  The attached article was published in the Washington Post this morning, and I think it is the best I have seen so far at laying out the current issues that are being debated and where things stand today in the shifting Washington DC sands.

http://www.msnbc.msn.com/id/31363847/ns/politics-washington_post/

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(at)kilpatrickstockton.com

By Mark Stember, JD

Clients and Friends:

As we discussed during our client health and welfare briefing in April, the Senate HELP and Finance Committees had just released an ambitious schedule of moving a health care reform bill to the full senate by the August recess.  Although that time frame still appears to be overly optimistic, health reform became a little clearer yesterday when the Senate HELP Committee released a draft 615-page bill.  The bill is a rough framework that contains an outline of what the bill would look like, and then contains numerous placeholders for various provisions, including a potential tax on employer-provided health benefits and a potential Massachusetts style pay-or-play employer mandate.  The rough draft is as comprehensive as its 615-page length suggests, including insurance market reforms, a public health option, wellness incentives, quality reforms, and incentives for individuals to enter the health care field.  I have attached a Word document that contains a narrative of the draft bill with the various options that the committee is considering.  The actual draft bill can be found at:  http://help.senate.gov/BAI09A84xml.pdf

The next step now is for the Senate HELP committee to markup the bill in the hopes of coming to a final and complete draft that can be voted on by the HELP committee members.  It is unclear whether this would occur either before or after the Senate Finance Committee begins its work on the tax aspects of the bill.  Assuming the HELP Committee completes and approves the bill and the Senate Finance Committee completes and approves the tax provisions, the full Senate can then begin to debate the bill.  Although it is clear that there is much more work to be done and many contentious issues remain, the HELP and Finance Committees are moving forward.  As things develop in Washington, the Kilpatrick Stockton Health and Welfare Team will keep you apprised of the major developments.  If you have any questions, please feel free to contact us.

Summary of Bill

eflex note: It appears that FSAs have dodged a bullet at this point in the health care reform change discussion

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

By Ric Joyner, CEBS

The explanation for the tests are best understood from EBIA.com. This is a comprehensive resource, but I do not have permission to hold their copyright 105 instruction material for public viewing. Please contact EBIA.

The first link is the instructions for the non-discrimination testing. http://www.screencast.com/t/CLjsdvL79e6

The second and third links are applying this to a real company now called “no name company”.

http://www.screencast.com/t/3hWeTNxk

http://www.screencast.com/t/j44kV5fXIwe

This will be on BB for two days.