Health Perks Geared To Top Workers Could Trigger Penalties Under Health Law

This is Julie Appleby in a Kaiser Health story produced with the USA Today:  

Many executives have long enjoyed perks like free health care and better health benefits for themselves and their families. But under a little noticed anti-discrimination provision in the federal health law, such advantages could soon trigger fines of up to $500,000.

Employers “should be more concerned about this than anything else” in the law, because many are in violation and the penalties can be stiff, says Jay Starkman, chief executive of Engage PEO in St. Petersburg, Fla., which offers human resources services and advises clients on the health law.

The provision says that employers who offer more generous benefits to highly paid workers could face fines of $100 a day for every worker who doesn’t get the perks....

It applies to employers who buy benefit packages for their firms from insurers. Those who self-fund their coverage, who tend to be larger firms, already face similar restrictions under Internal Revenue Service rules which pre-date the law.

To make sure his own small company complies with the law, Starkman began paying $600 in premiums toward his family’s coverage last month, putting him on an even playing field with his 60 employees.

He says the rule makes sense, noting that executives are likely to get little sympathy from the public.

“The right way to handle it is to have the same benefits for everyone,” he says, noting that firms can increase wages to managers or executives to cover their additional costs. ...

The anti-discrimination provision is technically in effect now, but the IRS says it will not impose penalties until it completes regulations and issues guidance about how the provision will be enforced. ...

The IRS rule offers guidelines explaining who is a highly paid employee, and says a plan discriminates if it favors such workers in terms of eligibility or benefits. ...

In seeking comments, the IRS asked employers and others how to define “benefits.” Do they include, for example, not just the coverage provided, but how much employees pay toward those costs? Some firms, for example, charge executives less than other employees – or nothing at all – toward coverage. Would that count as being discriminatory? ... 

Congressman re IRS Complaints: You were only targeted because you exercised your rights.

This is the agency primarily responsible for enforcing PPACA.

The audio speaks for itself.

Do we care?

It Begins: Feds Already Punting ObamaCare Cash Shortfalls to States

This is Allison Bell at Life Health Pro:   

The Center for Consumer Information and Insurance Oversight (CCIIO) may be giving more attention to concerns about auditing and fraud in new Pre-existing Condition Insurance Plan (PCIP) contracting materials.

Congress created the $5 billion PCIP program to give people with serious health problems a way to buy coverage. The sick people who use the program can get major medical coverage for a price comparable to the price that healthy people in their states pay. In 2012, claims averaged about $30,000 per enrollee. ...

The Associated Press reported last week that CCIIO managers have suggested that the PCIP program as a whole will run out of cash before the date when it is supposed to shut down -- Dec. 31 -- and that states will have to make up the difference between what CCIIO can pay for the program and the actual cost of the covered claims. 

What Democratic Senators are Saying About ObamaCare

This is Robert Pear writing in the New York Times:  

• Senator Jeanne Shaheen, Democrat of New Hampshire: “We are hearing from a lot of small businesses in New Hampshire that do not know how to comply with the law.” ...“[R]estaurants that employ people for about 30 hours a week are trying to figure out whether it would be in their interest to reduce the hours” of those workers, so the restaurants could avoid the law’s requirement to offer health coverage to full-time employees.

• Senator Tom Harkin, Democrat of Iowa and chairman of the appropriations subcommittee on health care, said he was extremely upset with Mr. Obama’s decision to take money from public health prevention programs and use it to publicize the new law, which creates insurance marketplaces in every state.  “I am greatly disappointed — beyond upset — that the administration chose to help pay for the Affordable Care Act in fiscal year 2013 by raiding the Public Health and Prevention Fund,” Mr. Harkin said.

• Senator Max Baucus, Democrat of Montana and chairman of the Finance Committee [and a primary author of ObamaCare], said last week that the administration deserved “a failing grade” for its efforts to explain the law to the public.  “I just see a huge train wreck coming down."  

• Senator Benjamin L. Cardin, Democrat of Maryland, said he told White House officials on Thursday that he was concerned about big rate increases being sought by the largest health insurer in his state. The company, CareFirst BlueCross BlueShield, has sought increases averaging 25 percent for individual insurance policies that will be sold in the state insurance exchange.  

46.7% of Americans Paid No Income Tax in 2011

According to the Tax Policy Institute 46.4% paid no income tax in 2011.

The Gallup question specifically stated "Do you regard the income tax you will have to pay this year is fair?" It did not ask if the system was fair.

If those who pay no income tax think their zero share is fair (and logically they should), then a mere 16% of those who do pay taxes think their share is fair.

Here is my math: 55% think their share is fair. Subtract the 46.4% who pay nothing (and logically should be happy about that),  the net is 8.6 percentage points. (8.6 / 53.6) * 100 = 16%. 

Full text: Mish's Economic Trend Analysis 

President Obama's 2014 Budget Proposal Would Begin Taxing Your Retirement Accounts

President Obama's proposed federal budget for fiscal year 2014, released in April, would cap tax-advantaged retirement savings for individuals at just over $3 million next year. The asministration estimates that the limit on tax-preferred accounts would confiscate an additional $9 billion of workers earnings over 10 years.

President Obama seeks to limit the deduction for contributions to 401(k) and 403(b)-type defined contribution plans, defined benefit pension plans, and individual retirement accounts (IRAs) for an individual who has total balances or accrued benefits under those plans that are sufficient to provide an annual income of approximately $200,000 commencing at age 62. The proposal would be effective for taxable years beginning after Dec. 31, 2013. 

Walking can lower risk of heart-related conditions as much as running

Walking briskly can lower your risk of high blood pressure, high cholesterol and diabetes as much as running can, according to surprising findings reported in the American Heart Association journal Arteriosclerosis, Thrombosis and Vascular Biology.

Researchers analyzed 33,060 runners in the National Runners’ Health Study and 15,045 walkers in the National Walkers’ Health Study. They found that the same energy used for moderate intensity walking and vigorous intensity running resulted in similar reductions in risk for high blood pressure, high cholesterol, diabetes, and possibly coronary heart disease over the study’s six years.

“Walking and running provide an ideal test of the health benefits of moderate-intensity walking and vigorous-intensity running because they involve the same muscle groups and the same activities performed at different intensities,” said Paul T. Williams, Ph.D., the study’s principal author and staff scientist at Lawrence Berkeley National Laboratory, Life Science Division in Berkeley, Calif.

Unlike previous studies, the researchers assessed walking and running expenditure by distance, not by time. Participants provided activity data by responding to questionnaires.

“The more the runners ran and the walkers walked, the better off they were in health benefits. If the amount of energy expended was the same between the two groups, then the health benefits were comparable,” Williams said.

Comparing energy expenditure to self-reported, physician-diagnosed incident hypertension, hypercholesterolemia, diabetes and coronary heart disease, researchers found:

• Running significantly reduced risk for first-time hypertension 4.2 percent and walking reduced risk 7.2 percent.
• Running reduced first-time high cholesterol 4.3 percent and walking 7 percent.
• Running reduced first-time diabetes 12.1 percent compared to 12.3 percent for walking.
• Running reduced coronary heart disease 4.5 percent compared to 9.3 percent for walking.

“Walking may be a more sustainable activity for some people when compared to running, however, those who choose running end up exercising twice as much as those that choose walking. This is probably because they can do twice as much in an hour,” Williams said. ...

Link to full text

Buyer Beware: New Health Ins. Subsidies Could Result in Surprise Federal Tax Bills Later

Reported in the Associated Press:

Millions of people who take advantage of government subsidies to help buy health insurance next year could get stung by surprise tax bills if they don't accurately project their income. … The subsidies are based on income. The lower your income, the bigger the subsidy. ...

What happens if you or your spouse gets a raise and your family income goes up in 2014? You could end up with a bigger subsidy than you are entitled to. If that happens, the law says you have to pay back at least part of the money when you file your tax return in the spring of 2015. ...

There are also special rules that protect people who marry or divorce from being required to pay back subsidies just because their marital status changes.

There are four thresholds for repaying the subsidies:

• A family of four making less than $47,000 would have to repay a maximum of $600.
• If the same family makes between $47,000 and $70,000, the amount they have to repay is capped at $1,500.
• If the same family makes between $70,000 and $94,200, the amount is capped at $2,500.
• Families making more than four times the poverty level have to repay the entire subsidy.... 

Is Atlas Shrugging? Docs look to retire in face of ObamaCare

Most physicians have a pessimistic outlook on the future of medicine, citing eroding autonomy and falling income, a survey of more than 600 doctors from Deloitte Center for Health Solutions found.  

• Six in 10 physicians (62%) said it is likely many of their colleagues will retire earlier than planned in the next 1 to 3 years.
• Four in 10 doctors reported their take-home pay decreased from 2011 to 2012, and more than half said the pay cut was 10% or less.
• Among physicians reporting a pay cut, four in 10 blame the [ACA], and 48% of all doctors believed their income would drop again in 2012 as a result of the health reform law."  

ObamaCare: Striving to Be Better Than Third-World Care

Wait a minute.  Do you mean that government-monopolized care may not be as good as the citizenry is used to?  As you can see, federal regulators are working hard to make sure our new exchanges offer a luxury, adequate, barely tolerable experience.  

This is the federal official in charge of setting up the Exchanges: 

Chao said that he’d once held high hopes that the exchanges would run smoothly from the beginning, but that those hopes had been dashed. “The time for debating about the size of the text on the screen, or the color, or is it a world-class user experience, that’s what we used to talk about two years ago,” said Chao. “Let’s just make sure it’s not a third-world experience.” Both Chao and Cohen said that it’s likely that some of the state-based exchanges might not be ready on time...

 

Full story:  http://www.forbes.com/sites/aroy/2013/03/22/cms-on-obamacares-health-insurance-exchanges-lets-just-make-sure-its-not-a-third-world-experience/  

Just why do doctors hate Medi-Cal so much?

(Note, under PPACA, California just expanded the number of residents eligible by 35%)  

• In many states, Medicaid pays doctors a fraction of what private insurers pay. In 2008, in California, a doctor made 38 cents on a Medicaid patient for every dollar he made seeing a privately insured one. In New Jersey, a doctor made 33 cents. In New York, 29. And states continue to decrease Medicaid physician fees, because it’s the only lever they have.  Full story.  
• For every person added to Medi-Cal or Medicare, doctors are forced to negotiate higher healthcare prices with the private insurance industry.  Those increase are passed onto you and your employees as increased premium.  PPACA has only exasperated that cost-shift.  

How Much Life Insurance Do You Need?

Here is a helpful summary from Miranda Marquit at Lifehacker: 

One rule of thumb is the 4%, which means that your family lives off the interest from your payout, and assumes that the lump sum earns 4% a year. If you make $45,000 a year, you would need $1.125 million in insurance coverage to generate your salary. Of course, you don't know that your family will be able to net 4% a year, considering market conditions and inflation. The money might run out over time, but this can give you a fairly quick way of determining how much life insurance you might need.

Another approach is to add up the cost of all of the expenses you expect your family to need to cover for a set period of time. You might decide that you want your life insurance policy to pay off debts that you have, as well as your mortgage, so that your family doesn't have to worry about these obligations. If you have a life partner that works, or that can get work, replacing your income doesn't seem as important as providing a way for your family to get financially squared away.

Also, consider how long your partner will have to support your children after you are gone. You can get coverage that will allow your youngest child to reach age 18. So, if your youngest is a baby, you might decide to get a 20-year term life policy (a little extra wiggle room). Then, you can add up what you hope to pay off with a life insurance policy. Your list might look something like this:

• $185,000 mortgage
• $7,000 car loan
• $20,000 student loans
• $6,000 credit cards
• 18 years x $45,000 = $810,000
• $5,000 funeral cost

The total by this reckoning is $1.033 million. Your family can pay off the bills, and then put the remainder into an account to draw on as income replacement. With earned interest, the money should last more than 18 years, although it wouldn't last indefinitely.

If you are confident in your partner's ability to earn a living, you might just decide on a number like $500,000 to cover expenses and pay off debts, and maybe contribute to your children's future education. At the very least, though, you want to buy enough coverage to pay funeral expenses and pay off debt. That way, your family has fewer things to worry about.