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:

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


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:

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,

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:

“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,

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:

“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:

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

For Fully Insured Employers With 2-50 Employees

Small Group Healthcare Reform Checklist
  • Are you a Small Employer?  Beginning in 2014, employers with 50 or fewer full-time plus full- time equivalent employees will be categorized as a “Small Employer.” If you are part of a “Controlled” or “Affiliated Service” group, you may in fact, be a large employer under the law.  Your broker can help you determine your status.
  • Do you qualify for a Small Business Tax Credit?  Employers with fewer than 25 employees should check to see if they qualify for the Small Business Tax Credit. For tax years beginning in 2014, the credit will be available only to small businesses that purchase health coverage through an Exchange, also called a Health Insurance Marketplace. Ask your broker if you qualify.
  • 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)? Applicable 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:‎  or
  • 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.  The Uniform Glossary Template is located here:
  • 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.
  • Have you notified your employees if your plan has a “Grandfathered Status”?  To maintain status as a grandfathered health plan, a plan or health insurance coverage must include a statement, in any plan materials provided to a participant or beneficiary describing the benefits provided under the plan or health insurance coverage, that the plan or coverage believes it is a grandfathered health plan within the meaning of section 1251 of the Patient Protection and Affordable Care Act and must provide contact information for questions and complaints.
  • Does your plan provide Essential Health Benefits?  The ACA identifies a range of services that must be included in the benefits package for small group plans. These 10 required benefits include: Ambulatory Patient Services,       Emergency Services, Hospitalization,  Preventive, Wellness Services and Chronic Disease Management, Maternity and Newborn Care, Mental Health and Substance Use Disorder Services, Prescription Drugs,  Pediatric Services including Oral and Vision Care, Laboratory Services,  and  Rehabilitative and Habilitative Services and Devices
  • Have you informed your high-wage employees of new Medicare payroll and investment income taxes? A new Additional Medicare Tax goes into effect starting in 2013. The 0.9 percent Additional Medicare Tax applies to an individual’s wages, Railroad Retirement Tax Act compensation, and self-employment income that exceeds a threshold amount based on the individual’s filing status. The threshold amounts are 0,000 for married taxpayers who file jointly, 5,000 for married taxpayers who file separately, and 0,000 for all other taxpayers. An employer is responsible for withholding the Additional Medicare Tax from wages or compensation it pays to an employee in excess of 0,000 in a calendar year. Make sure you adjust your payroll system accordingly.
  • Have you considered Wellness Programs? You need to decide whether you want to offer expanded wellness incentives. Starting in 2014, businesses can offer discounts of up to 30% off insurance premiums to employees who take part in employer-sponsored wellness programs. This is an increase from the 20% discount previously allowed.
  • 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.