Compliance & Reform Updates | Employee Counting Clarification; Cadillac Tax Guidance; IRS Safe Harbors; New Anthem News; FMLA Now Covers Same Sex Partners & More

This has been an incredibly busy two-week period in benefit news.  Here are some stories that you will want to review -

Anthem Update:

Notice Obligations in Connection with Recently Announced Cyber Attack
February 26, 2015-Anthem

Excerpt: “Certain federal and state laws, as well as contracts between you and Anthem, require that you be notified about the Incident, and may also require you, after receiving notice from Anthem, to make additional notices to regulators and individuals. To assist you in fulfilling these obligations, promote a consistent message to potentially impacted individuals, and in furtherance of our legal obligations, Anthem will have the notices it provides to regulators and individuals cover identified notice obligations you may also have to those regulators and individuals, including notice obligations under the breach notification regulations issued under the Health Insurance Portability and Accountability Act of 1996 and the Health Information Technology for Economic and Clinical Health Act (collectively, "HIPAA").”
  

Health Care Reform News:

More than half of ACA subsidy recipients must repay some portion
February 24, 2015-Bloomberg

Excerpt: “Fifty-two percent of the clients seen by H&R Block Inc. who received subsidies through the Affordable Care Act in 2014 underestimated their income and must repay a portion of the subsidies, with the average repayment $530, according to a Feb. 24 release from the Kansas City, Mo.-based company.”

IRS Issues Preliminary Guidance on Cadillac Tax
February 24, 2015-Ballard Spahr LLP

Excerpt: “Although the new notice does not provide guidance that employers may rely on, employers may draw upon it to understand the issues and general direction that the IRS is contemplating. For employers who wish to submit formal comments to the guidance, the deadline is May 15, 2015.”

Excise Tax on High Cost Employer-Sponsored Health Coverage
February 23, 2015-Internal Revenue Service

Excerpt: “This notice is intended to initiate and inform the process of developing regulatory guidance regarding the excise tax on high cost employer-sponsored health coverage under § 4980I of the Internal Revenue Code (Code). Section 4980I, which was added to the Code by the Affordable Care Act,1 applies to taxable years beginning after December 31, 2017. Under this provision, if the aggregate cost of “applicable employer-sponsored coverage” (referred to in this notice as applicable coverage) provided to an employee exceeds a statutory dollar limit, which is revised annually, the excess is subject to a 40% excise tax.”

IRS Offers Temporary Safe Harbor for Some Premium Reimbursement Arrangements
February 19, 2015-Thompson Information Services

Excerpt: “Small employers and certain other plan sponsors can continue to reimburse individual premiums until July 1, without the threat of extreme penalties for offering coverage that does not comply with Affordable Care Act insurance mandates, under new guidance from the Internal Revenue Service.”

• And BB&T's guidance on this topic can be found here. 

“Pay-or-Play” & Contingent Workers: Final Regulations Provide Clarity But Not Complete Relief
February 17, 2015-Proskauer's ERISA Practice Center Blog
Excerpt: "Short-Term Employees. The final regulations confirm the IRS’s position that short-term employees (other than seasonal employees) who are reasonably expected to work full-time (30 hours or more per week) at date of hire must generally be offered coverage within 90 days. There is no blanket exemption for short-term employees—if employment extends beyond the end of the third full calendar month of employment, the employer must offer coverage regardless of the projected termination date (the offer of coverage will generally be within 90 days from date of hire due to the ACA’s waiting period rules).
  
Employees of Temporary Staffing Firms. There are special rules for determining whether a variable hour employee is a full-time employee. Variable hour employees are employees with no set schedule or seasonal employees (generally those working 6 months or less on a seasonal basis). Under these rules, the employer (staffing company) can use a determination period of from 3 to 6 to 12 months to determine an individual’s full-time status for a following so-called “stability period” of 6 or 12 months."

Summary Chart of Disallowed Pay or Play Tactics
December 1, 2014-E is For ERISA
Excerpt: "With the January 1, 2015 employer shared responsibility deadline fast approaching, the three government agencies charged with ACA compliance (IRS, DOL and HHS) have provided recent guidance on several strategies or tactics that have been marketed to applicable large employers as legitimate ways to reduce their coverage costs and exposure to shared responsibility penalty taxes (assessable payments). Employer reimbursement of individual health insurance premiums is a common but not universal feature of these arrangements. The Internal Revenue Service ruled out pre-tax reimbursement of individual health premiums in Notice 2013-54, but more recent guidance in ACA FAQ XXII and in IRS Notice 2014-69 expands the prohibition to include after-tax individual premium reimbursements, as well as other shared responsibility cost reduction strategies."

Excerpt of Chart:

In Other News:

Beware of Brokers Offering to Cut Commissions or Work for a Fee Under Health Reform - You Will End Up Paying Twice
February 24, 2015-LifeHealthPro, by Craig Gottwals
Excerpt: "As the health and welfare brokerage industry gets squeezed by the mandates of the Patient Protection and Affordable Care Act (PPACA), I have seen more agencies resort to desperate pleas for new business by offering to "save" a client money by taking a commission cut or a flat-fee arrangement in lieu of commission on fully insured medical policies. While this direct approach undoubtedly sounds alluring to business owners and chief financial officers, it belies a fundamental misunderstanding of the new PPACA underwriting rules. With the PPACA rules on mandatory minimum medical loss ratios (MLR) rules now in place, brokers should not be saddling clients with “fee” arrangements or underfunded commission agreements on medical policies."

DOL and HHS Enforcement Activities Targeting Health Plans
January 30, 2015-Bloomberg BNA
Excerpt: "[T]he ACA and MHPAEA's (Mental Health Parity Act) enforcement scheme splits regulatory authority between state governments and the federal government -- and even federal enforcement is split among three different agencies, depending on the type of health plan at issue. This tangled enforcement scheme runs the risk of overlapping enforcement actions that could impose significant and unnecessary compliance costs on plan sponsors and insurers. This article provides a high-level overview of how ACA and MHPAEA enforcement authority is allocated between the states and the federal government, and how (and when) three federal agencies -- [HHS, DOL and IRS] -- may enforce the ACA and MHPAEA. [The article also discusses] current enforcement activities by HHS and DOL against insurers and plan sponsors ... [and] offers suggestions on how insurers and plan sponsors can best prepare for ACA and MHPAEA audits."

• More from BB&T on this topic here: ERISA Compliance FAQs: Enforcement

FMLA Modified to Protect Same-Sex Spouses Regardless of State of Residence
February 25, 2015-McGuire Woods

Excerpt: “By final rule published on Feb. 25, 2015 and effective March 27, 2015, the U.S. Department of Labor (DOL) is modifying the definition of “spouse” to include legally recognized same-sex marriages and “common law” marriages regardless of where the worker lives, provided the marriage was legal in the state in which it was originally celebrated. This shift from a “state of residence” rule to a “place of celebration” rule will allow legally married couples to enjoy consistent federal family leave rights even if the state in which they currently reside does not recognize same-sex marriages.”

Planning for the Year Ahead in Benefits
February 20, 2015-Winstead

Excerpt: “The final instructions clarify that if an employer wants to use either of these reporting methods it must satisfy the requirements to use such method for all months in the calendar year. For the 98% Offer method which avoids counting the number of full-time employees and reporting this number each month, the employer must have offered affordable coverage providing minimum value to at least 98% of its full-time employees for whom it is filing a Form 1095-C and that if offered minimum essential coverage to the employees’ dependents in each month in the calendar year. The employer is not required to identify which of the employees receiving the Form 1095-C is a full-time employee, but it must provide a Form 1095-C to every one of its full-time employees.”

The Pay Period Leap Year Redux: Don't Leap If It Isn't Your Year!
February 13, 2015-Wage and Hour Insights 

Excerpt: “If your first weekly paychecks will issue on Thursday, January 1, 2015, you will have a fifty-third pay period on December 31, 2015. If your first bi-weekly paychecks will issue on Thursday, January 1, 2015, you will have a twenty-seventh pay period on December 31, 2015, depending on payday holiday processing rules. This means that for employers who pay employees weekly or bi-weekly, 2015 could be a Pay Period Leap Year, but it doesn’t mean that all of your employees will have one.”
   

Beware of Brokers Offering to Cut Commissions or Work for a Fee Under Health Reform - You Will End Up Paying Twice

LifeHealthPRO published my latest article on how brokers who agree to cut commissions or, even worse, work for fees end up costing employers more money.  It's a troubling trend I've seen more of in recent years and clearly illustrates how such benefit advisers fail to understand the most basic economic principles within PPACA.

Below the full PDF of my story from LifeHealthPro.

U.S. Healthcare Spending is on the Rise Again

"The national medical bill may be back to growing faster than gross domestic product. After five years of historically slow growth, new data show U.S. health-care spending accelerated significantly in 2014.

The analysis, from the Altarum Institute research group and based on preliminary government data, shows health spending increasing by 5 percent last year, compared to 3.6 percent in 2013. If confirmed by the final tally, health-care spending during 2014 would mark the biggest jump since before the recession.... "

Source: Bloomberg.
 

Employers Should Disband Employee Weight Control Programs | Diets Don't Work - Weight Loss Almost Always Comes Back

Yet another paper has been published on the waste of time, money and morale that results from the recent infatuation with wellness programs.

This is from Alfred Lewis, JD; Vikram Khanna, MHS; and Shana Montrose, MPH writing at the American Journal of Managed Care:

American corporations continue to expand wellness programs, which now reach an estimated 90% of workers in large organizations, yet no study has demonstrated that the main focus of these programs—weight control—has any positive effect. There is no published evidence that large-scale corporate attempts to control employee body weight through financial incentives and penalties have generated savings from long-term weight loss, or a reduction in inpatient admissions associated with obesity or even long-term weight loss itself. Other evidence contradicts the hypothesis that population obesity rates meaningfully retard economic growth or manufacturing productivity. Quite the contrary, overscreening and crash dieting can impact employee morale and even harm employee health. Therefore, the authors believe that corporations should disband or significantly reconfigure weight-oriented wellness programs, and that the Affordable Care Act should be amended to require such programs to conform to accepted guidelines for harm avoidance. ...

Corporate weight control programs are ineffective at reducing weight; in addition, the nexus between weight loss and savings/productivity improvement is weak. Especially given the costs and potential harms of these programs, the authors recommend phasing them out altogether and reallocating resources towards creating a healthier work environment for everyone.

Full paper linked here.

Losing weight is hard.  Keeping it off for the long term is nearly impossible.  It is beyond short-sighted to think that one's employer can have an impact on the endeavor. Furthermore, so much of the "accepted" lore in wellness programs is tied to the USDA's outdated and increasingly reversed food pyramid.  For 40 years we were told eggs were bad for us.  Now they are not.  We were told to cut out fat and eat processed carbohydrates and margarine. We now know those are the worst things for us.  Employers should remain focused on their expertise.  If you want to improve an employee's well being, bonuses, time off, and other rewards to improve work-life balance work much better than trying to foster weight loss.

If you need more convincing enjoy this Ted Talk from Sandra Aamodt - Why Dieting Doesn't Usually Work:

In the US, 80% of girls have been on a diet by the time they're 10 years old. In this honest, raw talk, neuroscientist Sandra Aamodt uses her personal story to frame an important lesson about how our brains manage our bodies, as she explores the science behind why dieting not only doesn't work, but is likely to do more harm than good. She suggests ideas for how to live a less diet-obsessed life, intuitively. 

And from Mark Sisson at Mark's Daily Apple, Why Is Regaining Weight So Common: 

It’s an age-old story. A person has a huge amount of weight to lose and gets rid of most of it through a combination of diet, exercise, and lifestyle modification. And they feel fantastic. They’ve got energy for days, their skin glows, they exude newfound confidence, and they experience other small miracles. Many of you have lived this. But then something happens: the weight loss stops, or, worse, it reverses. They can keep the weight at bay as long as their diet is ironclad and they don’t skip any workouts, but as soon as they slip up even a little bit, they gain weight. And when they gain, they seem to gain it faster and more easily than should be normal. It just doesn’t seem fair.

What’s going on here?

It comes down to how we gain and lose weight. 

See, there are two kinds of fat gain: hypertrophic and hyperplastic. Adipose tissue hypertrophy is when your existing fat cells get bigger. Adipose tissue hyperplasia is when entirely new fat cells are created. 

The vast majority of fat cells are created and established during childhood and adolescence. During early infancy and from ages 9 to 13 appear to be especially crucial stages for adipose hyperplasia (PDF). After adolescence, you’re pretty much stuck with the number of fat cells your body has made. There are some regional differences in how adults gain body fat, with overfeeding creating new fat cells in the lower body fat but not upper body fat, but for the most part, the number of fat cells a person has is fixed during adolescence and only increases in adults with obesity. If your existing fat cells are filled to the brim and there’s nowhere else to put the incoming energy, the body will make new ones. 

In fact, adult adipose hyperplasia is a safety feature. As much as we hate the idea of adding entirely new fat cells to our body, they’re storage depots for excess energy. If you don’t have the extra fat cells for spillover, you’ll start depositing fat in the liver and around the other organs — basically, anyplace that’ll take it. This can have disastrous effects on our health. Animal studies show that inducing adipose tissue hyperplasia in energy excess alleviates the symptoms of type 2 diabetes in obese mice, while hypertrophic obesity (bigger fat cells) is associated with type 2 diabetes. In that respect, hyperplastia delays the development of fatty liver, diabetes, and other diseases of severely excessive nutrient accumulation by providing a place to put the nutrients. 

Weight loss doesn’t remove these fat cells, though. It pulls fat from existing ones, leaving the (mostly) empty cells behind. A formerly obese person who’s dieted and exercised down to 15% body fat still has the same number of fat cells he did when he was at 35% body fat. The fat is just spread more thinly, which makes avoiding weight regain more difficult. Why? 

It has to do with leptin. ...

See full column here.

For more on how our food pyramid should look, try this one:

 

Obamacare Tax Monster | Bogus Enrollment Numbers | And No You Can't Fire a Drunken Trucker on Armstrong & Getty 2/20/15

My Friday visit to the Armstrong and Getty studio (I'm in the first half of this hour):

And more information on the stories we covered:

1. No, there really aren't 11.4 million sign ups and the website is still not fully functional 5 years after this behemoth passed.  
2. The IRS is requesting a $2 billion budget increase and 9,000 new agents as it prepares to enforce Obamacare’s 46 new tax provisions. 
3. Record Dependency: Half of all kids in California are now on the government healthcare program for the poor.
4. The New York Times published that we are now up over 30 exemptions to the Individual Mandate.
5. You can fire a driver if he’s an alcoholic, right? You won’t like the answer. 
6. Covered California Sends Out Nearly 100,000 Tax Forms Containing Errors, Others Deal With Missing Forms. 
7. Gaming Obamacare: If a family of four makes $85,000 but states their income is $52,000, they would have a significant difference in subsidy. This subsidy—close to $5,000—would far exceed the payback limitation of $2,500.
8. The Obamacare tax nightmare is going to be bad, very bad.  This is from Investor's Business Daily: 

... The way ObamaCare works is that when people sign up, they have to guess what their income will be for the following year. Whatever subsidy they get is based both on their projected income and the cost of the relevant Silver plan. 

The problem is that these people now must reconcile their actual income with whatever they guessed when enrolling for ObamaCare. If they earned more than they guessed, they'll have to pay back some of their "advance premium tax credit." If they earned less, the IRS will refund them the difference. 

With us so far? 

To reconcile their income, they must confront the new Form 8962, which really should be called the H&R Block Full Employment Form. 

Form 8962 is a testament to all that is wrong with ObamaCare. It takes up two pages, contains five parts and requires a total of 36 steps. Several of those steps involve separate worksheets. The instruction booklet explaining it all runs 15 pages. 

Filers first have to calculate their entire family's "modified" adjusted gross income (which requires a separate set of calculations), locate the correct poverty line number in the instruction booklet and divide the two. Then they have to translate the result into an "applicable figure," also found in the instruction booklet, and then do a couple more calculations. 

That's just to get through Part 1. 

It gets even more arcane from there. At one point, the instructions say: "If you checked the 'No' box on line 6 or you are using filing status married filing separately and Situation 2, earlier, does not apply to you, skip columns A through E, and see Column F, later." 

Simple, right? 

And in the end, millions will find that their subsidies were too big and they owe money to the government. In fact, H&R Block figures that as many as half of those who got ObamaCare subsidies last year will owe some of it back. 

Then there are those who went uninsured last year and now must pay a tax penalty. They'll need to fill out their own form. If they want an exemption, still more paperwork. ...

Obamacare really is the gift that keeps on giving.  Who can forget these classics where party girls are used to help sell insurance:

11.4 Million ObamaCare Signups Is No Big Deal - Just Ask The President

This is from Investor's Business Daily:

... [The] 11.4 million number [the Administration touts] is just as bogus as the 8 million number Obama was extolling last year.

In both cases, the administration simply counted all those who picked plans, not those who have actually paid for insurance. When they finally produced an accurate count last year, the number was 6.7 million. If that same drop-off occurs this year, the real enrollment number will be more like 9.5 million.

That's about where the administration's lowered forecast put it, and significantly below the Congressional Budget Office's 13 million forecast.

So much for working "better than we anticipated."

Even if 11.4 million had signed up, this is hardly a sign that the law is a big success.

Before ObamaCare, roughly 16 million owned insurance on the individual market — and they all managed to buy it without any government hand-holding or taxpayer-subsidized premiums. Even if you count those who bought plans off the exchanges, the number today isn't much changed from that.

And a new Heritage Foundation study finds that, while the individual market has expanded, it's largely because ObamaCare has pushed millions off their employer plans. Heritage found that in the first nine months of last year, the individual market increased by 5.8 million, but 4.9 million had lost employer coverage.

Creating a new class of people dependent on government for things they used to be able to afford on their own is not a sign of progress.

Also, it's worth recalling that back in 2013, Obama was dismissing those 16 million who had bought insurance on their own as a trifle, after many of them learned that their plans were being canceled because of ObamaCare.

Obama tried to downplay this mess by saying "we're talking about 5% of the population." Jay Carney, Obama's press secretary at the time, even instructed reporters that "when you do this story, just please remember that the universe you're talking about here is 5%. That's the whole individual insurance market — 5% of the population."

So by Obama's own standard, the latest ObamaCare sgn-up numbers are insignificant....

And with respect to Obamacare "working a little better than we expected" as the President said this week Bob Laszewski had this to add:

... The administration spent $2.2 billion on developing and fixing Healthcare.gov.
But 17 months after its original launch––and five years after the law passed––the backroom still has not been completely built. 

There are now about 7 million people receiving health insurance premium subsidies in the federally run exchanges. But HealthCare.gov can't pay the insurance companies. Insurers are still getting paid based upon a workaround that involves them manually filling out worksheets––for 7 million people. There is no formal date for when this will be fixed. 

HealthCare.gov also can't reconcile the cost sharing subsidies the lowest income people get form Obamacare––like lower deductibles and co-pays. 

This lack of an automated enrollment process not only causes lots of headaches but also makes the enrollment numbers the administration is reporting awfully soft. One carrier told me they only ended up with half of the net January enrollments HealthCare.gov originally reported to them. 

So, has Obamacare met your expectations?  

IRS Releases Final Forms 1094 &1095 for Reporting Employer Health Coverage Information and New Publication Offering Further Guidance

B Form Instructions

C Form Instructions

Form 1094-B

Form 1095-B

Form 1094-C

Form 1095-C

Pub. 5196

This is from EBIA: 

The IRS has released much-anticipated final Forms 1094 and 1095, which will be used to enforce Code § 4980H employer penalties, as well as individual mandate and tax credit eligibility rules. Issued under Code §§ 6055 and 6056, the forms were originally released as drafts in July 2014 (see our article), with draft instructions following in August (see our article). 

The “B forms” consist of the Form 1094-B transmittal and the Form 1095-B information return (which also serves as the required statement to individuals). Although some employers and other entities will be required filers, health insurers will be the primary users of the B forms, which report individuals enrolled in minimum essential coverage (MEC). The final B forms and instructions make few changes to the drafts. 

The “C forms” consist of the Form 1094-C transmittal (which also reports important information relative to employer penalties) and the Form 1095-C information return (which also serves as the required statement to employees). Filed by applicable large employers (ALEs), the final C forms themselves are largely unchanged from the drafts (except for some modifications to the recipient instructions in the 1095-C). But the final C form instructions contain noteworthy clarifications and changes. ...

   Read full summary here.

New IRS Guidance on Wide Range of Issues Related to PPACA Employer Mandate

Below is an excerpt from Proskauer's summary of the latest IRS release on Pay-or-Play guidance.  Pay close attention to the fine line drawn between short term employees and seasonal employees.  The 6-month limitation so many employers found encouraging only applies to truly seasonal employees.  Employees that are merely short term, but not necessarily seasonal must be offered benefits within 90 days if they are working more than 30 hours per week.

This is from  Peter Marathas and Damian A. Myers writing in Proskauer's ERISA Practice Center:

As previously reported, on February 10, 2014, the IRS issued final regulations on the Affordable Care Act’s (ACA) employer shared responsibility requirements—the so-called “pay-or-play” mandate. In the regulations, the IRS provides new and additional guidance on a wide range of issues relating to the implementation of the pay-or-play rules. Among them, the IRS has restated its position and introduced some new rules relating to the engagement by employers of “contingent workers,” including temporary employees, individuals hired through temporary staffing firms and independent contractors (“1099 employees”). Not surprisingly, in its proposed regulations released about a year ago, the IRS had flagged contingent workers as presenting challenging issues for compliance with the pay-or-play requirements. 

Key provisions of the final regulations’ rules for contingent workers are summarized below. 

• Definition of Employee. In the final regulations the IRS reaffirms its position that it will use a common law definition of employee to determine employer-employee status. Generally, an individual is the common law employee of an entity if that entity has the right to control the individual’s performance of services. ...

• Common Law Employees of the Client Employer. For purposes of the pay-or-play mandate, when the client is the common law employer, an offer of coverage made by the temporary staffing firm “on behalf of” the client employer will be considered to be an offer of coverage by the client employer. In order for an offer of coverage to be “on behalf of” the client employer, the client employer must pay a higher fee to the temporary staffing firm for those employees who enroll in the temporary staffing firm’s plan. In other words, if the contract provides for a flat fee per employee placement irrespective of whether the employee enrolls in the staffing company’s coverage, the employer will not be considered to have made an offer of coverage. This could lead to exposure under the pay-or-play mandate’s $2,000 per full-time employee “no coverage offered” penalty if more than 5% of its full-time employees (30% in 2015) are employed through the staffing agency.  

• Contingent Worker Misclassification Issues. Employers are not required to offer coverage to independent contractors; however, because the final regulations use a common law definition of employee, an IRS examination finding that common law employees have been misclassified as independent contractors could result in significant penalty exposure to the employer. Employers that engage a significant number of “1099 employees” run a tremendous risk of incurring the pay-or-play mandate’s $2,000 per full-time employee “no coverage offered” penalty, even when they offer coverage to all of the employees they categorize as full-time. If the number of 1099 employees who are reclassified as common law employees exceeds 5% of the employer’s full-time workforce (30% in 2015), the “no coverage offered” penalty may be tripped. ...  

Given the lack of available relief [available in this area of PPACA], employers should carefully review their contractual arrangements with service providers to ensure that they have been properly classified as independent contractors as opposed to common law employees under the more traditional common law tests. 

• Short-Term Employees. The final regulations confirm the IRS’s position that short-term employees (other than seasonal employees) who are reasonably expected to work full-time (30 hours or more per week) at date of hire must generally be offered coverage within 90 days. There is no blanket exemption for short-term employees—if employment extends beyond the end of the third full calendar month of employment, the employer must offer coverage regardless of the projected termination date (the offer of coverage will generally be within 90 days from date of hire due to the ACA’s waiting period rules).  

• Employees of Temporary Staffing Firms. There are special rules for determining whether a variable hour employee is a full-time employee. Variable hour employees are employees with no set schedule or seasonal employees (generally those working 6 months or less on a seasonal basis). Under these rules, the employer (staffing company) can use a determination period of from 3 to 6 to 12 months to determine an individual’s full-time status for a following so-called “stability period” of 6 or 12 months. Because of the nature of the business—where employees may work for several client employers during a certain period of time—commenters observed that it would be difficult to determine when a staffing company employee was a variable hour employee. ... [T]he final regulations provide criteria that a staffing company may consider to determine whether a new employee is “variable hour.” This assessment is done at the time of hire based on the staffing company’s reasonable expectations. Considerations may include whether other similar employees of the staffing company: 

• retain the right to reject assignments; 

• have periods during which no assignments are available; 

• are offered assignments of differing lengths; and 

• are typically offered assignments that do not extend more than thirteen weeks. 

No one factor is dispositive. ... 

 

Friday Health Headlines Provoking Atlas to Shrug

That glass of red wine may not be as good for your health as you think

Chronic Fatigue Syndrome is a real disease, so we're gonna give it an even sillier name. That is right, I'm intolerant of exertion. I simply won't stand for it!

As it turns out, if you're sleep deprived, a good nap can undo the damage wrought by your poor sleep habits.  Really? One needn't present me with more evidence elevating my desire for a nap.

Shock Claim: 2 in 3 bosses are neither dysfunctional nor horrific!

Don't worry about eating eggs.  U.S. nutritional recommendations have been wrong for about four decades.  Scientists have known for years that most of the cholesterol in food gets broken down, discarded, or used to make bile acids, which you need to digest food. Some cholesterol is also needed to make hormones and cell membranes. The cholesterol in your blood – you make most of that yourself. 

  

This May Be the Biggest Problem with American Healthcare. And the President Agrees

Third-Party-Payment Destroys Market Efficiency

• In 1960 about half of our healthcare expenses were paid by the government or an insurer.  
• Today people pay less than 12% of their own costs.  
• Whether it is the government squandering taxpayer dollars or your child blowing the the $10 you just handed him for video games, other people don't spend your money anywhere near as efficiently as you do. 

---

This is an excellent column from Investor's Business Daily on one of the single most fundamental problems in U.S. healthcare.  My text is in black, IBD's is in gray:

President Obama almost sounded like a free-market health care reformer during a recent interview. Too bad he can't even imagine letting the private sector fix things.

In an interview published this week on Vox.com, Ezra Klein asks Obama why health care costs so much more in the U.S. than in other countries. It was a perfect set-up for Obama to blame greedy insurance companies, drug companies and doctors. 

Instead, Obama gave a surprising — for liberals at least — answer: Health costs are being driven up largely because most health bills are paid by third parties. 

Actually, our problem is worse than that in America.  We really have, overwhelmingly, a fourth party payment system.  Medical groups and insurers haggle over reimbursements. Insurers repackage that menu of prices, slap a premium on it and sell it to businesses. Then businesses massage it and reprice a fraction of it back to employees in the form of employee contributions.

Employees see the $500 (or whatever amount) coming out of their paycheck every month for their family contribution and they make the economically rational choice to use that plan without too much thought and no real incentive to determine what the best price of a procedure is at competing hospitals.  That even sounds funny for me to type, doesn't it?  "Competing" hospitals.  Once that $500 a month is coming out whether you visit the doctor or not, the $25 copay for an office visit means almost nothing.  Back to IBD's article quoting the President:

"Mostly we've got a system where everybody gets their health insurance through their employers," he said. "For those of us who have an insurer, we don't track (costs). And the market then becomes really opaque and really hard to penetrate." 

Obama even says, "Moving in the direction where consumers and others can have more power in the marketplace ... makes a lot of sense." 

This is the most accurate and insightful observation on America's broken healthcare system I've heard from the President since 2009 when he noted that Medicaid was broken and we can't simply solve our problems by dumping more folks into that dysfunctional system. Unfortunately, no fixes were installed and the President's health insurance reform did exactly that.

This is almost exactly what free-market health care reformers have been saying for decades. 

As the ... [above] chart shows, private insurers and the government paid for about half the nation's health care costs in 1960. By 1980, they covered more than 75% of health costs. Today, they pick up more than 88%. 

This rise in third-party payment for health care — driven by government programs and decades-old tax policies — largely shields consumers from the cost of care, which fuels inflation, distorts the market, increases paperwork costs and makes pricing agonizingly opaque. 

But while Obama managed to hit on the right diagnosis, he utterly failed to understand its implications. In his next breath, in fact, Obama says that he's expanded this third-party system so people can "have peace of mind." 

ObamaCare limits deductibles, limits annual out-of-pocket spending, mandates first-dollar coverage for a host of health care and so on. As a result, the Centers for Medicare and Medicaid Services (CMS) expects that by 2023 private insurers or the government will pay for more than 90% of the nation's health costs.... 

I encourage you to read the entire IBD story, here.

If you want to read more about why healthcare inflation has slowed slightly in recent years see here.  It began in 2006.  It is because the economy has been so bad, people are self-rationing care unless that care is absolutely necessary.  The prevalence of higher deductibles and copays in Obamacare have accentuated that impact.

Lastly, shopping for price does matter immensely in healthcare.  Whatever system we devise must incentivize people to comparison shop.  HSA-compatible PPO plans are one great way to accomplish this.  With those plans individuals can pair up high-deductible insurance with pre-tax savings accounts that roll over from year to year and travel with them to cover healthcare expenses.  See the below listing on the prices for a knee-replacement surgery from around the U.S.  Without an incentive for an end user to compare prices, these market distortions will never be resolved -

• $16,000 in Alabama; 
• $19,600 in Fresno, California; 
• $41,000 in San Diego, California; 
• $61,000 in New York and 
• $31,000 average U.S. cost. 

   Source: Forbes slideshow. 

  

Wellness Gut Buster: Health Experts Recommend Standing Up At Desk, Leaving Office, Never Coming Back - the Onion

I've read this a few times over the past week and it makes me laugh audibly every time. Enjoy, from the Onion:

ROCHESTER, MN—In an effort to help working individuals improve their fitness and well-being, experts at the Mayo Clinic issued a new set of health guidelines Thursday recommending that Americans stand up at their desk, leave their office, and never return. “Many Americans spend a minimum of eight hours per day sitting in an office, but we observed significant physical and mental health benefits in subjects after just one instance of standing up, walking out the door, and never coming back to their place of work again,” said researcher Claudine Sparks, who explained that those who implemented the practice in their lives reported an improvement in mood and reduced stress that lasted for the remainder of the day, and which appeared to persist even into subsequent weeks. ... 

Entire post here.
 

Will Obamacare Be Repealed with 51 Votes in the Senate in 2017?

Senator Ted Cruz believes so.  This is from Ali Meyer at CNS News:

... CNSNews.com asked Cruz, “Given that the Senate enacted Obamacare in a reconciliation measure that required only 51 votes, would you support repealing Obamacare with only 51 votes?” 

“Absolutely,” Cruz responded. “If it can be passed with reconciliation, it can be repealed with reconciliation. And we need to use every procedural means possible to fight to stop the train wreck that is Obamacare.” 

“I believe in 2017 a Republican president will sign legislation repealing every word of Obamacare,” Cruz said. “Obamacare has caused millions of Americans to lose their jobs to be forced into part time work, to lose their health care, to lose their doctors, to see their health insurance premiums skyrocket. This last election was a referendum on Obamacare and the American people overwhelmingly said this isn’t working, let’s start over. That’s what Congress needs to do.” ...

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