CA Legislature Doling out More than Half a Billion in Taxpayer Dollars for Democrat Party Outreach

I really wish I had not seen this one.  H/T Katy Grimes.

This is Betsy McCaughey writing for Investors Business Daily:

... The Obama administration granted a whopping $910 million to California to set up its insurance exchange. That money is not for bandages, surgery, nurses and doctors to care for the sick. Nor is it for insurance plans, though $910 million could buy generous coverage for at least 113,000 people! 

Shockingly, the $910 million is slated for bureaucracy, including rich compensation packages for exchange employees ($360,000 a year for the executive director) and contracts for computer equipment, public relations and "outreach." 

Outreach is the largest expenditure and where the real monkey business occurs....

What is known so far suggests that California politicians are exploiting health reform to enroll millions of the uninsured in the Democratic Party and fill the coffers of left-wing interest groups with taxpayer money. 

Here are the facts to back up that cynical picture: 

• California lawmakers passed a law (Senate Bill 35) requiring that voter registration be part of the health insurance exchange. 

• Last month, Covered California announced $37 million in grants to 48 organizations to build public awareness about the opening of the health exchange on Oct. 1. 

• Of the 48 organizations that got grants, only a handful are health-care related. The California NAACP received $600,000 to do door-to-door canvassing and presentations at community organizations.  

• Service Employees International Union, which says its mission is "economic justice," received two grants totaling $2 million to make phone calls, robo-calls and go door to door. 

• The Los Angeles County Federation of Labor AFL-CIO got $1 million for door-to-door, one-on-one education and social networking. It describes its role as "engaging in both organizing and political campaigns, electing pro-union and pro-worker candidates." 

• Community Health Councils, a California organization with a long history of political activism against fracking, for-profit hospitals, state budget cuts and oil exploration, got $1 million to conduct presentations at community and neighborhood meetings and one-to-one sessions. 

These organizations, closely allied with the Democratic Party, are being funded by your tax dollars to conduct "outreach," meaning the kind of phone banking and door-to-door canvassing that activists do to turn out the vote. They will turn out the uninsured to enroll on the exchanges and in the Democratic Party....

R and D Senators Author Proposal to Change ObamaCare Mandate to 40 Instead of 30 Hours

I doubt this will go anywhere but it does signify a few major changes in the implementation of PPACA:   

• Very few times have Republicans and Democrats worked together in this process.  This might be the beginning of a shift as we approach substantial implementation in 2014.   
• Democrats are now increasingly getting nervous and expressing desire to change the law.   

All in all, this might help some employers, but it is a horrible ideal.  The economic impact of this would be to have hundreds of thousands of Americans hired at less than 40 hours a week with no benefits and it would dramatically increase the amount getting federal subsidies to purchase healthcare in the Exchanges.  Not that I expect PPACA to be anywhere near its projected budget, but there is no need to exacerbate the oncoming fiscal nightmare.  

This is from Sam Baker writing at The Hill:  

A pair of centrist senators introduced a bill Wednesday to soften the employer mandate in President Obama's healthcare law. 

The healthcare law requires employers to offer coverage to employees who work more than 30 hours per week. Some employers have said they will reduce workers' hours to avoid the mandate. 

Sens. Joe Donnelly (D-Ind.) and Susan Collins (R-Maine) proposed a bill to move the threshold to 40 hours per week, saying the employer mandate should match the traditional definition of a full-time worker. ... 

Collins said Wednesday she has heard significant interest in changing the employer mandate but acknowledged that many in her own party have resisted efforts to improve the law. 

"I personally do not think that is an appropriate response when there's such a glaring error in the law," she said. "I think it's incumbent upon us to try to fix it."Donnelly also acknowledged that some Democrats don't want to touch the healthcare law either because they oppose certain specific changes or because they simply don't want to invite a renewed debate over ObamaCare. 

Donnelly voted for the Affordable Care Act, which passed while he was in the House.  

Some liberal Democrats say setting the employer mandate at 30 hours per week was the best way to ensure that people who work 30 to 40 hours per week have access to healthcare. 

Others, though, have said they would consider to a change. Sen. Tom Harkin (D-Iowa) told The Hill last month that he would be "open to looking at it." 

Moving the threshold to 40 hours would likely add more costs for the federal government, which would be paying for more subsidies to help people cover the cost of insurance they buy on their own. 

But, Collins said, the status quo also costs the government money. As employers reduce workers' hours, their pay — and thus their taxes — decreases.... 

The senators also sent a letter to Obama on Wednesday asking the administration not to enforce the employer mandate's penalties in 2014, to give businesses more time to adjust to the new requirements....

ERISA Sec 510 & PPACA's Whistleblower Provisions May Have Already Made It Illegal To Reduce An Employees Hours to Avoid Penalties in 2014

This a portion of a detailed and  well written article on a significant, unresolved legal issue in Reform.  In short, it may be illegal for an employer to reduce an employee's hours now in an effort to ensure they don't get benefits in 2014 under PPACA.   I've provided the link and most pertinent portions below. This will be scary for many businesses.  

The key will be to always make sure a business has a legitimate purpose, other than Reform, to reduce an employee's hours below 30.  

This is from: Proskauer's ERISA Practice Center Blog:

...ACA’s Whistleblower Provision.  ACA’s whistleblower provision states that no employer shall discharge or discriminate against “any employee with respect to his or her compensation, terms, conditions, or other privileges of employment” because, among other things, the employee “has received” a credit or subsidy provided by ACA.[5]  The U.S. Department of Labor recently issued regulations and guidance on the statute’s whisteblower provisions.  This guidance specifically states that an employee’s hours or pay may not be reduced for having received a subsidy to purchase insurance via a public health insurance exchange.[6]  The guidance leaves open whether courts will view ACA’s whistleblower provisions as applicable to the reduction of an employee’s hours so that the employee would not have coverage and also not be full-time.  In that case, the employee might go to a health insurance exchange to purchase coverage and obtain a premium subsidy.  As explained above, had the employee been full-time, the employee’s action might have resulted in a tax penalty to the employer.  The ACA whistleblower issue is whether this type of employer activity would be prohibited by being viewed as reducing hours of work in anticipation of the employee receiving a subsidy to purchase insurance via an exchange and in an effort to avoid a penalty with respect to the employee.  This open issue is at the heart of workforce realignment strategy. ... 

[C]omplainants must show only that a protected activity was a “contributing factor” leading to the adverse employment action.  Upon making this prima facie case, the burden shifts to the employer to demonstrate by clear and convincing evidence that the same employment action would have resulted absent the protected activity.  A “contributing factor” is “any factor which, alone or in connection with other factors, tends to affect in any way the outcome of the decision.”[10]  OSHA’s [the whistleblower enforcement agency] interim final rule notes the nature of the “contributing factor” test: 

In proving that protected activity was a contributing factor in the adverse action, a complainant need not necessarily prove that the respondent’s articulated reason was a pretext in order to prevail, because a complainant alternatively can prevail by showing that the respondent’s reason, while true, is only one of the reasons for its conduct, and that another reason was the complainant’s protected activity.[11] 

As for remedies, ACA authorizes “all relief necessary to make the employee whole, including injunctive and compensatory damages,” such as reinstatement, back pay with interest, and “special damages,” including but not limited to:  litigation costs, attorneys’ fees, and expert fees.[12] 

It remains unclear whether ACA’s whisteblower protections will apply to workforce realignment decisions.  As discussed above, ACA’s “pay or play” penalties are only assessed on the number of full time employees, thus realignments to reduce hours, especially for low wage workers eligible for subsidies and credits, could be viewed as unlawful interference with the terms of employment.  From the employees’ perspective, such workforce changes directly impact access to medical care for all similarly-situated individuals, and would stem solely from to an employer’s desire to avoid ACA’s penalties – penalties that are triggered when one or more full-time employees receive a subsidy through a public health insurance exchange.  From the employer’s perspective, realignment is a business decision to avoid taxes, and such changes could help workers qualify for subsidies and credits, thereby providing more affordable access to care.  Given the burden shifting approach for ACA’s whistleblower protections, and the enhanced remedies provided by ACA, including back pay with interest and special damages, plaintiffs may well pursue claims that workforce realignments interfere with protected rights to coverage.  Because ACA’s protections mirror Title VII, it is possible that courts will apply the forward-looking Title VII protections announced in Burlington N. & Santa Fe Ry. Co. v. White, 548 U.S.C. 53, 57 (2006), to expand ACA’s protections from tangible adverse employment actions to any action that “could well dissuade a reasonable worker” from obtaining coverage. 

ERISA Section 510.  Section 510 of ERISA makes it unlawful to interfere with employee benefits and protects the right to both present and future benefit entitlements.  First, the provision protects plan participants from adverse employment action, such as termination, discipline, or discrimination, for exercising the right to benefits available under the terms of the governing plan.  Second, employers may not use adverse employment action to interfere “with the attainment of any right to which such participant may become entitled under the plan.”[13]  Third, participants are protected from retaliation when they give information, have testified, or are about to testify “in any inquiry or proceeding relating to [ERISA].”[14]  Because any employment decision may impact the right to present or future benefits, courts require plaintiffs to show specific intent to interfere with benefits to prevail under Section 510.[15]  Plaintiffs enforce these anti-retaliation and anti-discrimination protections under ERISA’s remedial provisions, Section 502(a)(3).  Remedies are thus generally limited to “appropriate equitable relief,” which can include reinstatement, restitution, and back pay.[16]  There are substantial disputes, however, regarding the scope of any monetary remedies, including backpay, for Section 510 violations.[17]  Thus, plaintiffs may try to argue their claims also arise under ACA’s whistleblower protections to qualify for the enhanced remedies available to such claims. 

Because ERISA applies to health plans established or maintained by employers, the statute’s anti-discrimination and anti-retaliation provision may apply to workforce realignment decisions when such action interferes with employee access to employer-provided health coverage.  

Proskauer’s Perspective.  Employers seeking to avoid ACA’s coverage mandates by realigning their workforces may risk suit under the statute’s whistleblower protections and ERISA § 510.  Because such suits may straddle both ACA and ERISA, parts of these cases could proceed before a jury.  In the event that such cases arise, plaintiffs may try to first establish that the employer was acting with specific intent to avoid the newly codified health care coverage responsibilities.  If “specific intent” is demonstrated under ERISA § 510, then violation of the ACA’s “contributing factor” standard may be a foregone conclusion.  There are, however, substantial defenses against such claims, including that such changes are the natural result of legitimate business decisions and completely insulated from attack....

iDoctor: Smart Phones Will be the Future of Medicine

Truly amazing capability for increased care, better/faster results and cost reduction nationwide.   8 of the coolest minutes you will spend today.

Cost of Gov't Regulation: $14,768 Per Household in 2012

The latest annual index of federal rules and regulations due this week is expected to show that the amount of red tape in the system has hit a record high and a record cost of $1.8 trillion under the Obama administration.

The 20th anniversary edition of the index, compiled by Wayne Crews of the Competitive Enterprise Institute, will show that the number of pages in the Code of Federal Regulations hit a peak of 174,545 in 2012, an increase of more than 21% during the last decade, reports The Wall Street Journal.  If a person tried to read all of it, he would have to read 698 pages per work day every day for the entire year.  

Using government data, Crews estimates that in 2012 the cost of complying and implementing federal rules was roughly equal to the entire GDP of Canada.  

The costs to each American household amount to approximately $14,768, making the red tape caused by regulations the biggest expense after housing in a typical family budget. 

Healthcare Professors: Employees will bear the ultimate cost of ObamaCare

This is Jonathan Kolstad, Mark Pauly and Robert Town, Professors of Healthcare Management at the Wharton School of the University of Pennsylvania writing at Forbes: 

[T]he great bulk of the cost of newly offered coverage will come, not out of profits or hiring, but out of worker cash wages. That is what happened in Massachusetts when “RomneyCare” was implemented. While there was little impact on the overall labor market, there was a striking change for those workers who gained new insurance: they saw wage reductions (relative to the trend) of almost precisely the cost of health insurance to their employers. Adding further evidence for the power of the employer side of the labor market to adjust in the face of an individual as well as an employer mandate, the number of employers offering health insurance actually increased following reform. ... 

When the dust clears, employers will be making the same profits as they did before and workers will still have the same kinds of jobs as they did before—but jobs that pay less in cash and more in benefits. So, even though an employer would correctly estimate that his business would suffer if he alone were forced to pay for benefits, the fact that his labor market competitors are being put under the same obligation means that the labor market overall will readjust in a way that is much less threatening. ...

Link to full text. 

Despite misleading headlines, CA exchange plans to increase individual premiums by 64-146% after you strip away subsidies and compare equivalent doctor networks

This is Avik Roy at Forbes:  

Last week, the state of California claimed that its version of Obamacare’s health insurance exchange would actually reduce premiums. “These rates are way below the worst-case gloom-and-doom scenarios we have heard,” boasted Peter Lee, executive director of the California exchange.

But the data that Lee released tells a different story: Obamacare, in fact, will increase individual-market premiums in California by as much as 146 percent.

Lee’s claims that there won’t be rate shock in California were repeated uncritically in some quarters. “Despite the political naysayers,” writes my Forbescolleague Rick Ungar, “the healthcare exchange concept appears to be working very well indeed in states like California.” A bit more analysis would have prevented Rick from falling for California’s sleight-of-hand.

Here’s what happened. Last week, Covered California—the name for the state’s Obamacare-compatible insurance exchange—released the rates that Californians will have to pay to enroll in the exchange. “The rates submitted to Covered California for the 2014 individual market,” the state said in a press release, “ranged from two percent above to 29 percent below the 2013 average premium for small employer plans in California’s most populous regions.”

That’s the sentence that led to all of the triumphant commentary from the left. “This is a home run for consumers in every region of California,” exulted Peter Lee.

Except that Lee was making a misleading comparison. He was comparing apples—the plans that Californians buy today for themselves in a robust individual market—and oranges—the highly regulated plans that small employers purchase for their workers as a group. The difference is critical.

Obamacare to double individual-market premiums

If you’re a 25 year old male non-smoker, buying insurance for yourself, the cheapest plan on Obamacare’s exchanges is the catastrophic plan, which costs an average of $184 a month. (That’s the median monthly premium across California’s 19 insurance rating regions.)

The next cheapest plan, the “bronze” comprehensive plan, costs $205 a month. But in 2013, on eHealthInsurance.com (NASDAQ:EHTH), the average cost of the five cheapest plans was only $92. In other words, for the average 25-year-old male non-smoking Californian, Obamacare will drive premiums up by between 100 and 123 percent.

Under Obamacare, only people under the age of 30 can participate in the slightly cheaper catastrophic plan. So if you’re 40, your cheapest option is the bronze plan. In California, the median price of a bronze plan for a 40-year-old male non-smoker will be $261. But on eHealthInsurance, the average cost of the five cheapest plans was $121. That is, Obamacare will increase individual-market premiums by an average of 116 percent.

For both 25-year-olds and 40-year-olds, then, Californians under Obamacare who buy insurance for themselves will see their insurance premiums double. ...

And then there is this from Robert Laszewski writing at the Healthcare Policy and Marketplace Review:  

Then one of the largest insurers in California, Blue Shield, announced that their average rate increase would be 13% under the new law. That sure looks better than the predicted 30% increase for California exchange plans.

But wait, that Blue Shield exchange plan in LA, for example, does not include UCLA Medical Center or Cedars Sinai. In fact, Shield's exchange network includes a total of only 24,000 physicians compared to 66,000 doctors in their full PPO network––only 36% of their usual network docs will be available.  

Peter Suderman at Reason summarized the State's PR push as follows:  

But this good news is not as good as it might sound, because it’s based on a misleading comparison: next year’s individual market rates with this year’s small-employer plans. A more useful comparison would be with this year’s individual-market premiums. And what that comparison reveals is that rate shock is real, and that the hikes are far larger than the comparison with small-group rates would suggest.

Michael Cannon at CATO characterized the disinformation campaign as such:  

"Officials at Covered California, like those running all the other Obamacare exchanges, owe their power and their paychecks to Obamacare. They will fight to preserve the law, even if they have to deliberately mislead the public."   

To summarize, the "reasonable premium" increases publicized last week were based on the assumptions that:  

• The individual applying would get a federal subsidy based on income; 
• The benefits would not be the same as current plans; and 
• The available list of participating doctors is greatly reduced. 

But thankfully, if you like your plan you can keep it.  Or so I've heard.  

Excessive Aerobic Training: The Exercise Equivalent of a Cheeseburger?

This is from Kevin Helliker writing for the Wall Street Journal:  

Endurance athletes have long enjoyed a made-of-iron image. But amid mounting evidence that extraordinary doses of exercise may diminish the benefits of modest amounts, that image is being smudged. That extra six years of longevity running has been shown to confer? That benefit may disappear beyond 30 miles of running a week, suggest recent research. 

The improved blood pressure, cholesterol levels and robust cardiac health that exercise has been proven to bestow? Among extreme exercisers, those blessings may be offset partially by an increased vulnerability to atrial fibrillation and coronary-artery plaque, suggest other recent studies.... 

"Heart disease comes from inflammation and if you're constantly, chronically inflaming yourself, never letting your body heal, why wouldn't there be a relationship between over exercise and heart disease?" said John Mandrola, a cardiac electrophysiologist and columnist for TheHeart.org.... 

For its subjects, the study concludes, "Excessive exercise significantly increases mortality." 

Oakland, CA Clinic Tries to Explain Health Reform in 22 Different Languages

The below is a portion of a story from LifeHealthPro on March 4, 2013.  And you were worried that government regulators would not use your tax dollars to conduct focus group testing on various different names they use forObamaCare. 

"With such diversity in cultures and language, the authors said the success of health care reform “hinges in large part on how well the state conducts culturally and linguistically competent outreach and enrollment efforts.”

“If the exchange did no targeted outreach, there could be 110,000 fewer limited-English proficient individuals enrolled,” said Cary Sanders, director of policy analysis for CPEHN, an Oakland-based multicultural health advocacy group.

Even the relatively mundane task of developing a brand for California’s new health care exchange has prompted some angst.

The exchange’s staff tried to come up with a name that signified health insurance and would translate well into Spanish, Chinese, Tagalog, Vietnamese and other languages commonly used in California.

Full story here.  

PPACA elevates employees who complain you violated PPACA to near-protected class status with new whistle-blower protections

Excerpt:   

Section 1558 of [PPACA] prohibits retaliation (e.g., intimidation, blacklisting, discipline, etc.) against employees who (i) report violations of Title I of the Act (which contains most of the substantive provisions that relate to employee health plans, as discussed below) or (ii) receive tax credits or cost- sharing reductions in connection with participation in a health insurance exchange. The Act authorizes the Secretary of Labor to conduct investigations into retaliation complaints and issue determinations, and the Rule delegates that duty to OSHA. Retaliating employers can be required to, among other things, reinstate terminated employees, provide back pay with interest, and pay compensatory damages, attorneys’ fees, and expert witness fees.

  Full story:  http://www.paulhastings.com/assets/publications/2359.pdf?wt.mc_ID=2359.pdf

Courts Holding Employer Attorney-Client Privilege Applies to Employees and DOL

A number of courts have recently held that the attorney client privilege you have between you and your attorney as a plan sponsor will also extend to all of your employees and the DOL under the theory that your employee benefit plan is solely to be administered for the benefit of your participants.  I.e., if you discover you've been overcharging an employee for years and you call your lawyer to ask what you should do; that employee might very well have a legal right to know exactly what your lawyer has to say about that.  

This is not an employer friendly development at all. See: 

Call Me: Applying the Attorney-Client Privilege for Employee Benefit Plans 

"Several courts have recently held that the attorney-client privilege should not block participants from learning the content of communications between the plan fiduciary and its attorney. The reasoning follows one of two lines: 

(1) the benefit of any legal advice runs to the plans' beneficiaries (the participants), so that anything legal counsel says to the administrator is in effect being said to the participants, or

(2) the fiduciary duty to act in the 'best interest of the participants' and disclose information related to plan administration outweighs the attorney-client privilege. ...

If anything about the situation could be awkward if it is disclosed, talk with your benefits counsel by telephone to explain the problem before e-mailing and before talking with any outside parties, such as a recordkeeper, trustee or actuary."  (Warner Norcross & Judd LLP) 

Full Story: http://www.wnj.com/Publications/CALL-ME-Attorney-Client-Privilege-for-Employee-Ben 

Wellness Programs Really Aren't Saving You Any Money

There is a growing body of research surfacing that details why wellness programs don't save employers money.  In a nutshell:    

• The more recent studies are from disinterested parties who do not profit from selling you wellness.   
• Wellness may work a little if you are self-funded (generally 500+ employees) and are willing to put strict penalties in place to penalize those who are not healthy.  However this has two other realities associated:   
  • The "savings" probably really results from just dissuading unhealthy folks from working for you and 
  • This creates an additional cost to you for compliance as it increases the risk of health-discrimination suits.  
• Employees generally don't stay with an employer long enough for these long-term changes to pay off.  Think of smoking cessation, for example.  You are, in effect, working to prevent lung cancer many years down the road.   
• Lastly, the loss of goodwill with employees as they view employers meddling in their personal lives and eating habits also has negatively associated soft costs.    

For two different summaries released just this week, see here and here from the Harvard Bus. Review and Washington Post.