Congress OKs Bipartisan Bill Changing Doctors’ Medicare Fee

WASHINGTON (AP) — Legislation permanently overhauling how Medicare pays physicians won approval Tuesday from an atypically united Congress as lawmakers banded together to erase an irritant that has dogged them for years.

Adding urgency to legislators’ work, the measure headed off a 21 percent cut in doctors’ Medicare fees that would have hit home Wednesday, when the government planned to begin processing physicians’ claims reflecting that reduction. The bill also provides billions of extra dollars for health care programs for children and low-income families, including additional money for community health centers.

Working into the evening, the Senate approved the measure 92-8 less than three weeks after the House passed it by a lopsided 392-37.

“It’s a milestone for physicians, and for the seniors and people with disabilities who rely on Medicare for their health care needs,” President Barack Obama said in a written statement after the vote. He added, “I will be proud to sign it into law.”

Conservatives were unhappy that two-thirds of the bill’s $214 billion, 10-year costs were financed by simply making federal deficits even bigger, while liberals wanted added money for children and women’s programs. Eager to demonstrate his party’s ability to efficiently run the Senate they’ve controlled since January, Majority Leader Mitch McConnell, R-Ky., defended the measure.

“It’s another reminder of a new Republican Congress that’s back to work,” he said. “And while no bill will ever be perfect, this legislation is a sensible compromise with wide bipartisan support.”

Top Democrats also expressed support for the legislation.

“This is a significant and hard won achievement that will ensure better quality health care and certainty for millions of seniors and children,” said Sen. Ron Wyden, D-Ore.

The bill marks a tandem effort by Democrats and Republicans at a time when the two parties are far likelier to block each other’s initiatives.

All eight “no” votes came from Republicans, including some of their most conservative members. Among presidential hopefuls, Sens. Ted Cruz, R-Texas, and Marco Rubio, R-Fla., voted against the bill, while Rand Paul, R-Ky., voted for it.

The bill’s chief feature was its annulling of a 1997 law aimed at slowing the growth of Medicare that has repeatedly threatened deep cuts in reimbursements to physicians and led to threats by doctors to stop treating the program’s beneficiaries. Congress has blocked 17 reductions since 2003, an exercise that invites intense lobbying and difficult choices about finding budget savings that both parties detested.

Instead, the measure would create a new payment system with financial incentives for physicians to bill Medicare patients for their overall care, not individual office visits.

While Democrats touted the legislation’s added funds for children and the poor, Republicans were claiming victory in changes the bill makes in Medicare that would have a long-term though modest impact on the huge program’s finances.

While $141 billion of the measure’s costs over the decade would come from added federal red ink, about $35 billion would come from Medicare beneficiaries, mostly by raising the medical and prescription drug premiums paid by some upper-income recipients starting in 2018. Though the affected beneficiaries already pay higher premiums than lower-earning people, Congress seldom increases costs on seniors, fearing retribution come the next Election Day from older voters.

The bill would raise another $37 billion by cutting Medicare reimbursements to hospitals and other providers.

Before passage, senators rejected six amendments, three from each party, that were all but sure to lose but let lawmakers demonstrate their disapproval of provisions they opposed.

A Democratic proposal to extend the two years of extra money the measure provided for the popular Children’s Health Insurance Program to four years lost on a 50-50 vote — short of the 60 votes needed to prevail. By 58-42, the chamber rejected an effort by conservatives to force Congress to find enough savings to pay for the entire measure without increasing federal red ink.

“Honestly it’s my hope that the amendments are not approved, because we need to get this bill down to the president for signature before midnight,” McConnell told reporters.

Senators faced conflicting pressures from lobbying groups.

The American Medical Association and other providers’ organizations were urging lawmakers to pass the bill. AARP, the senior citizens’ lobby, wanted legislators to back an amendment ending Medicare’s annual coverage limits for therapy but stopped short of urging the bill’s defeat without that change.

Conservative groups including the Club for Growth and Heritage Action for America pressed lawmakers to support the GOP amendment — which lost — to require Congress to pay for the entire bill.

House Speaker John Boehner, R-Ohio, who crafted the compromise with House Minority Leader Nancy Pelosi, D-Calif., warned senators of the impending doctors’ cuts and underscored the futility of trying to amend the bill.

“The House legislation passed with overwhelming bipartisan support, and we do not plan to act again, so we urge the Senate to approve the House-passed bill without delay,” Boehner said in a written statement.

The 21 percent cut in doctors’ fees technically took effect April 1. Citing federal law, the Centers for Medicare and Medicaid Services stopped processing those claims two weeks ago — in effect giving lawmakers time to complete the legislation. The agency processes around 4 million Medicare payments for doctors daily.

To view article, go to: http://news.yahoo.com/congress-oks-bipartisan-bill-changing-014834438.html

Fram, Alan. “Congress OKs Bipartisan Bill Changing Doctors’ Medicare Fees.” Associated Press. Yahoo!, 15 Apr. 2015. Web. 15 Apr. 2015.

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IRS Delays Penalties on Businesses That Reimburse Workers for Health Insurance

The Internal Revenue Service will delay imposing excise taxes on small businesses that reimburse their employees for the cost of buying individual health insurance policies.

These types of employer payment plans are group health plans that don’t comply with the market reforms in the Affordable Care Act, according to the IRS. As a result, employers that offer health reimbursement arrangements (HRAs) could be subject to excise taxes of $100 a day per employee.

In a new notice, the IRS said small businesses — those with fewer than 50 employees — with HRAs will not be subject to excise taxes until July 1, 2015.

The IRS said it understands “that some employers that had been offering health coverage through an employer payment plan may need additional time to obtain group health coverage or adopt a suitable alternative.” It also concedes that the Small Business Health Options Program, which was supposed to give small businesses better options for health insurance, isn’t yet fulfilling its potential.

“The market is still transitioning, and the transition by eligible employers to SHOP Marketplace coverage or other alternatives will take time to implement,” the IRS states.

Thanks for the delay in imposing the tax penalty for HRAs, but that’s not good enough, responded the National Federation of Independent Business.

“This temporary delay serves as an important immediate step to protect small businesses from costly penalties when trying to assist employees with the purchase of health insurance,” said Amanda Austin, NFIB’s vice president of public policy. “However, another delay to Obamacare does not fix the underlying problems – which the administration is conceding with these actions. We urge Congress to provide permanent relief from catastrophic penalties associated with health reimbursement arrangements and to find a solution to rising health insurance costs for small businesses.”

Around 14 percent of small businesses that don’t provide health insurance coverage use reimbursement arrangements to help their employees purchase insurance on their own, according to the NFIB Research Foundation. Penalizing HRAs limits small businesses’ flexibility when making health care decisions, NFIB contends.

To view the website, go to: http://www.bizjournals.com/bizjournals/washingtonbureau/2015/02/irs-delays-penalties-on-businesses-that-reimburse.html

Hoover, Kent. “IRS Delays Penalties on Businesses That Reimburse Workers for Health

Insurance.” The Business Journals. N.p., 18 Feb. 2015. Web. 12 Mar. 2015.

Affordable Care Act Tax Provisions for Large Employers

Some of the provisions of the Affordable Care Act, or health care law, apply only to large employers, generally those with 50 or more full-time equivalent employees. For example, in 2015 large employers will have annual reporting responsibilities concerning whether and what health insurance they offered to their full-time employees.

Coverage Reporting Payments & Provisions
If you have 50 or fewer employees, you can purchase affordable insurance through the Small Business Health Options Program (SHOP).

To learn more about market reforms and various plan requirements, visitHealthCare.gov.

You must withhold and report an additional 0.9 percent on employee wages or compensation that exceed $200,000. Learn more.

You may be required toreport the value of the health insurance coverage you provided to each employee on his or her Form W-2.

Effective for calendar year 2015, you must file anannual return reporting whether and what health insurance you offered your employees. This rule is optional for 2014.

Effective for calendar year 2015, if you provide self-insured health coverage to your employees, you must file an annual returnreporting certain information for each employee you cover.This rule is optional for 2014.

Effective for calendar year 2015, you may have to make a payment if you do not offer adequate, affordable coverage to your full-time employees, and one or more of those employees get a Premium Tax Credit. Learn more about the employer shared responsibility provision.

If you self-insure, you may be required to pay a fee to help fund the Patient- Centered Outcomes Research Trust Fund.

To view the website, go to: http://www.irs.gov/Affordable-Care-Act/Employers/Affordable-Care-Act-Tax-Provisions-for-Large-Employers

“Affordable Care Act Tax Provisions for Large Employers.” Affordable Care Act Tax Provisions for

Large Employers. N.p., 6 Mar. 2015. Web. 12 Mar. 2015.

Affordable Care Act Tax Provisions for Small Employers

Some of the provisions of the Affordable Care Act, or health care law, apply only to small employers, generally those with fewer than 50 full-time employees or equivalents.

If you have fewer than 50 employees, but are a member of an ownership group with 50 or more full-time equivalent employees, you are subject to the rules for large employers.

Coverage Reporting Payments & Credits
If you have 50 or fewer employees, you can purchase affordable insurance through the Small Business Health Options Program (SHOP).

To learn more about how the Affordable Care Act may affect your business, visitHealthCare.gov.

You must withhold and report an additional 0.9 percent on employee wages or compensation that exceed $200,000. Learn more.

You may be required toreport the value of the health insurance coverage you provided to each employee on his or her Form W-2.

Effective for calendar year 2015, if you provide self-insured health coverage to your employees, you must file an annual return reporting certain information for each employee you cover. This rule is optional for 2014. Learn more.

You may be eligible for theSmall Business Health Care Tax Credit if you cover at least 50 percent of your full-time employee’s premium costs and you have fewer than 25 full-time equivalent employees with average annual wages of less than $50,000.

If you self-insure, you may be required to pay a fee to help fund the Patient- Centered Outcomes Research Trust Fund.

To view the website, go to: http://www.irs.gov/Affordable-Care-Act/Employers/Affordable-Care-Act-Tax-Provisions-for-Small-Employers

“Affordable Care Act Tax Provisions for Small Employers.” Affordable Care Act Tax Provisions for

Small Employers. N.p., 9 Dec. 2014. Web. 11 Mar. 2015.

Medical Underwriting and the ACA

If you’ve never purchased a health plan before, you’re probably not familiar with the term medical underwriting. The good news is, you don’t really have to know much about it now that the Affordable Care Act is in effect — but it’s still smart to know how the laws have changed.

To start, medical underwriting was the main reason why people couldn’t get insured before the health law was in place.

If you had a history of health problems, you would be dismissed, limited or rated up by an insurer.

What Was Medical Underwriting Like Before 2014?

The underwriting process used to be much, much longer. When filling out a health insurance application, an applicant would have to go write in several years worth of treatments, provider names and outcomes in order to be considered for a policy, if they had any history of illnesses.

If an applicant was sick before they signed up for coverage, they would have to include this information. How much information they were required to provide depended on the state’s look-back period.

Signing up for insurance after being diagnosed with or receiving care for an illness gave an applicant the “pre-existing condition” title. This served as a red flag to medical underwriters at the insurance company, who would adjust monthly premium rates and access to coverage according to how sick the person was.

Before Obamacare, a medical insurance underwriter could:

Increase your monthly premiums based on your health status or history of treatments

Decide your plan would never cover certain costly benefits you were likely to need because of your health

Decide not to cover condition-related services for a period of time, which was usually capped by the state anywhere from 6-24 months

Underwriting rules were different in each state, but they are now uniform — and basically nonexistent — under the federal healthcare law. Underwriters still have a job, though, as it’s important to figure out how much plans will cost policyholders according to their age and tobacco use.

These are the only variables that can increase your premiums beginning in 2014.

How Does the ACA Change Underwriting?

Under the Affordable Care Act, insurers cannot discriminate against anyone for their health. This means they aren’t allowed to ask for your medical history when you apply for coverage.

No more medical underwriting, or hardly any, also helps the health plan application process move more smoothly and quickly. You don’t have to wait several weeks for your insurer to contact doctors or figure out how expensive you’ll be to insure.

This is a bit of a loss for insurers, who depended on underwriting to balance enrollment between very healthy (inexpensive) and not-so-healthy (more expensive) policyholders. As a result of health insurance being guaranteed issue, the risk is spread through new federaltaxes that compensate insurers for the amount of sick patients they take on.

In other words, don’t worry: your health plan will stay in business, and you’ll be covered — even if you’ve had cancer, a pregnancy or allergies that kept you from getting insured in the past.

What your insurer can’t do under the health law:

  • Ask for your health information on an application
  • Increase your premiums based on your risk level
  • Exclude benefits that you’ll need to care for a condition
  • Refuse to cover services with an elimination rider

Underwriters could also restrict people’s access to coverage if they were female or had a high-risk job or hobby before the ACA. So that everyone has a fair shot at avoiding the penalty tax for being uninsured, these limitations, too, were removed by the law.

To view the website, go to: http://echealthinsurance.com/obamacare/affordable-care-act-facts/medical-underwriting-and-the-aca/

“Medical Underwriting and the ACA.” East Coast Health Insurance. N.p., 2015. Web. 12 Mar. 2015.

For Fully Insured Employers With 50+ Employees

Large Group Healthcare Reform Checklist
  • Are you a Large Employer? Beginning in 2014, employers with more than 50 full-time employees and full- time equivalents will be determined to be a “Large Employer” and starting in 2015, may be subject to a penalty if they do not offer medical coverage to all full-time employees that is affordable and meets the minimum value requirement under the ACA. Controlled and Affiliated Service Groups must add total number of employees for all companies within the group to determine status. Ask your broker if this applies to you.
  • Do you have part-time, seasonal or variable-hour employees? If you have a part-time or seasonal workforce that is not entitled to enroll in your group health plan, you will need to establish a formal procedure for monitoring hours of service for this employee population. This will allow you to identify potential full-time employees by tracking hours during a specified “measurement” period and provide coverage if necessary during another specified “stability” period. Your broker can explain the “new employee” and “ongoing employee” safe harbors for tracking coverage over extended periods of time.
  • Are you reporting health insurance benefits on your employee’s W-2s? Employers who issue more than 250 W-2s are required to report the aggregate cost of coverage under their employer-sponsored group health plan in Box 12 on their employees’ W-2s. This reporting is for informational purposes only and is not taxable. Ask your broker about additional IRS reporting requirements.
  • Are you aware you need to report to the federal government on whether you offer health coverage, the total number and names of those receiving coverage, and the cost of the plan? The first report is due in 2015 for the year 2014.
  • Are your employees aware of new rules for health flexible spending accounts (FSA)?  Your employees should be aware that 1) employee salary reduction contributions to health FSAs will be limited to,500 per plan year, with indexed increases allowed in future years to adjust for inflation. 2) funds from these plans can no longer be used to buy over-the-counter drugs (except insulin) without a prescription. 3) employees will pay higher penalties (20%) for withdrawing HSA funds for nonmedical expenses.
  • Are you providing written notice about Exchanges (Health Insurance Marketplaces)? Employers must provide written notice to current employees by Oct. 1, 2013, and new employees within 14 days of their start date to inform them of their coverage options available through the new Exchange (Covered California).  The U.S. Department of Labor shared a Model Notice employers may use to meet this requirement that can be found on the Department of Labor website at www.dol.gov/ebsa/pdf/FLSAwithplans.pdf‎  or www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf
  • Have you provided a Summary of Benefits and Coverage (SBC) and Uniform Glossary?  On or after Sept. 23, 2012, group health plans and health insurance issuers offering group or individual health insurance coverage are now required to provide a Uniform Glossary and an SBC that accurately describes the benefits and coverage under the applicable plan or coverage. The final regulations require that the SBC be provided in several instances (upon application, by the first day of coverage if there are any changes, special enrollees, upon renewal, upon request and off-renewal changes) and can be included as part of the SPD. A model SBC can be downloaded from the Department of Labor website at www.dol.gov/ebsa/pdf/SBCtemplate.pdf‎  TheSBC Uniform Glossary template is located here: http://www.dol.gov/ebsa/pdf/SBCUniformGlossary.pdf
  • Do you know the employee eligibility Waiting Period? A “waiting period” is defined as the period that must pass before coverage for an employee or dependent who is otherwise eligible to enroll under the terms of a group health plan can become effective. In California, this waiting period is limited to 60 days from date of hire effective January 1, 2014.

New fees you should be aware of.

Tax/Fee

Party Responsible for Remitting Effective Date

Amount

PCOR Fees—

Used to fund the Patient-Centered

Outcomes Research Trust Fund, a private, nonprofit corporation supporting clinical effectiveness research

Insurers of fully-insured health plans

Plan sponsors of self-funded health plans

First fees due as early as July 31, 2013

Applies for 7 plan years.

.00 multiplied by the average number of covered lives (not just number of employees) in the first plan year

.00 per covered life in second plan year

Indexed by medical inflation thereafter

Transitional Research Fee—Designed to fund re-insurance payments to health insurance issuers that cover high-risk individuals in the individual market Insurers of fully-insured health plans

Plan sponsors of self-funded health plans

A three year program for 2014-16 .25/month (.00/ year) per covered life
Health Insurance Co. Fee— A fee allocated to all health insurers to help fund premiums subsidies and Medicaid expansion Health insurers only, but many carriers are expected to shift the cost to those buying policies, by increasing their needed premium to cover risk retention First payable

September 30, 2014

Depends on the carrier’s market  share of all health insurance policies as among insurers with total premiums of million or more

Largest carriers expect fees of 2-3% of premium

  • Are you not offering Health Insurance Coverage to your employees? Starting in 2015, if an employer does not offer any coverage and one or more full-time employees receive a premium credit or cost- sharing subsidy through the Exchange, the penalty is ,000 per year per full-time worker for each month an employer does not offer coverage to its employees. (When calculating the penalty, the first 30 full-time workers are subtracted from the payment calculation.)
  • Is the coverage you are offering Unaffordable or not Minimum Value? Starting in 2015, if an employer offers coverage but it does not meet the affordability requirement (share of the employee’s premium for self-only coverage must not exceed 9.5 percent of his or her household income) or Minimum Value (the plan’s share of total allowed costs of benefits provided under the plan is less than 60 percent of those costs) and one or more full-time employees receive a premium credit or cost-sharing subsidy through the Exchange, the penalty is ,000 per year per employee who receives a premium credit or cost-sharing subsidy. Employers can use one of three safe harbor tests to determine affordability.
  • FORM W-2 SAFE HARBOR: Instead of by reference to the employee’s household income, employers may use the employee’s wages for this purpose as reported in Box 1 of the employee’s Form W-2.
  • RATE OF PAY SAFE HARBOR: Employers can take the hourly rate of pay for each hourly employee who is eligible to participate in the health plan as of the beginning of the plan year; multiply that rate by 130 hours per month; and determine affordability based on the employee’s monthly contribution amount (for the self- only premium of the employer’s lowest cost coverage that provides minimum value). The plan is affordable if it is equal to or lower than 9.5 percent of the computed monthly wages.
  • FEDERAL POVERTY LINE SAFE HARBOR: An employer may also use the federal poverty line (FPL) for a single individual. Employer-provided coverage offered to an employee is considered affordable if the employee’s cost for self-only coverage under the plan does not exceed 9.5 percent of the FPL for a single individual.
  • Do your plans discriminate? Delayed pending further regulatory guidance, the ACA includes a requirement that employer provided benefit plans cannot discriminate in eligibility, waiting period, benefits or contributions in favor of highly compensated employees. Failure to comply carries a penalty of 0 per individual for each day the plan does not comply.

This checklist applies to new regulations under the Affordable Care Act only and does not include additional employer compliance requirements under ERISA, HIPAA and other federal labor laws. Ask your broker for additional information.

This document is not intended to be exhaustive nor should any information be construed as tax or legal advice. Readers should contact a tax professional or attorney if legal advice is needed. Although we have made every effort to provide complete, up-to-date, and accurate information in

this document, such information is meant to be used for reference only. We make no warranty or guarantee concerning the accuracy or reliability of the information within this document. If there is any inconsistency between the information contained in this document and any applicable law, then such law will control.