Daily Digest for August 27th

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Daily Digest for August 21st

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HR3200: Hostility Toward SMBs That Self-Insure

Filed in Politics, Social IssuesTags: Constitutional Rights, Health/Nutrition, HR3200, ObamaCare

HR3200 – Reading The Bill: Hostility Toward SMBs That Self-Insure

I’m really getting sick of supporters of ObamaCare admonishing those who oppose it to read the bill. So, I’m working on a series in which I do just that, framing my opposition to the bill by referencing the actual wording of the proposed legislation.

Up next: HR3200's hostility toward Small and Medium Businesses (SMBs) that self-insure.

We'll start with a look at SEC. 113, INSURANCE RATING RULES. Refer to page 21 line 23 through page 22 line 11, Sec. 113(b)(1)(C):

The Commissioner, in coordination with the Secretary of Health and Human Services and the Secretary of Labor, shall conduct a study of the large group insured and self-insured employer health care markets. Such study shall examine...[t]he financial solvency and capital reserve levels of employers that self-insure by employer size.

Now, I'm not a businessperson; I'm just an engineer. That said, I don't understand how one can "examine...[t]he financial solvency and capital reserve levels" of a company without looking at that company's books. I have seen the argument from the left that this information is available in normal IRS paperwork, but I don't think so. Such IRS documents involve a company's income, expenditures, and losses for a given fiscal year. "Financial solvency and capital reserve levels" cannot be gleaned solely from such data.

Perhaps this information can be gleaned from the publicly available annual financial reports; however, publicly traded companies (which are the ones required to publish annual financial reports) are, I would assume, less likely to self-insure. It is the SMBs that would be most likely to self-insure - and at the same time, less likely to be publicly traded and therefore less likely to publish annual financial reports.

So, from where will the Commissioner get these data, without auditing the books of companies that self-insure?

Further, the bill explicitly states that its intent is to eliminate tax incentives for SMBs to self-insure. Refer to page 22 line 23 to page 23 line 3, Sec. 113(b)(2):

Such report shall include any recommendations the Commissioner deems appropriate to ensure that the law does not provide incentives for small and mid-size employers to self-insure or create adverse selection in the risk pools of large group insurers and self-insured employers.

To make matters worse, under Title VIII, Section 1802, Comparative Effectiveness Research Trust Fund, subsection 1802(b)(1), the bill actually amends Chapter 34 of the Internal Revenue code, adding a new Subchapter B to impose a fine (tax) on companies that self-insure. Refer to page 830, lines 1-9, Sec. 1802(b)(1), quoting Internal Revenue code Chapter 34, Subchapter B, Section 4376, Self-Insured Health Plans:

SEC. 4376. SELF-INSURED HEALTH PLANS.

(a) IMPOSITION OF FEE.—In the case of any applicable self-insured health plan for each plan year, there is hereby imposed a fee equal to the fair share per capita amount determined under section 9511(c)(1) multiplied by the average number of lives covered under the plan.

(b) LIABILITY FOR FEE.—

(1) IN GENERAL.—The fee imposed by subsection (a) shall be paid by the plan sponsor.

So, what is the "fair share per capita" fee amount? It is defined as follows:

Subject to subparagraph (B), the fair share per capita amount under this paragraph for a fiscal year (beginning with fiscal year 2013) is an amount computed by the Secretary of Health and Human Services for such fiscal year that, when applied under this section and subchapter B of chapter 34 of the Internal Revenue Code of 1986, will result in revenues to the CERTF of $375,000,000 for the fiscal year.

In other words, take $375 million, divide by the total of all employees under an employer self-insurance plan, and you get the "fair share per capita amount".

According to this report, 73 million Americans were in self-insurance plans in 2007. Using this number, employers who self-insure will be taxed at least $5 per employee, just to help fund the Health Care Comparative Effectiveness Research Trust Fund (CERTF).

So, to summarize, HR3200 is hostile toward SMBs that self-insure:

  • SMBs that self-insure will be subjected to auditing in order to examine... financial solvency and capital reserve levels"
  • Recommendations will be made to ensure that tax laws "does not provide incentives for small and mid-size employers to self-insure"
  • SMBs that self-insure will be subjected to a "fair share per capita" tax to help fund the Health Care Comparative Effectiveness Research Trust Fund (CERTF)

For reference and context, below are the above-referenced excerpts from HR 3200:

Page 21•HR 3200
22 (b) STUDY AND REPORTS.—
23 (1) STUDY.—The Commissioner, in coordina
24 tion with the Secretary of Health and Human Serv
25 ices and the Secretary of Labor, shall conduct a
26 study of the large group insured and self-insured
Page 22•HR 3200
1 employer health care markets. Such study shall ex
2 amine the following:
3 (A) The types of employers by key charac
4 teristics, including size, that purchase insured
5 products versus those that self-insure.
6 (B) The similarities and differences be
7 tween typical insured and self-insured health
8 plans.
9 (C) The financial solvency and capital re
10 serve levels of employers that self-insure by em
11 ployer size.
12 (D) The risk of self-insured employers not
13 being able to pay obligations or otherwise be
14 coming financially insolvent.
15 (E) The extent to which rating rules are
16 likely to cause adverse selection in the large
17 group market or to encourage small and mid
18 size employers to self-insure
19 (2) REPORTS.—Not later than 18 months after
20 the date of the enactment of this Act, the Commis
21 sioner shall submit to Congress and the applicable
22 agencies a report on the study conducted under
23 paragraph (1). Such report shall include any rec
24 ommendations the Commissioner deems appropriate
25 to ensure that the law does not provide incentives
Page 23 •HR 3200
1 for small and mid-size employers to self-insure or
2 create adverse selection in the risk pools of large
3 group insurers and self-insured employers. Not later
4 than 18 months after the first day of Y1, the Com
5 missioner shall submit to Congress and the applica
6 ble agencies an updated report on such study, in
7 cluding updates on such recommendations.

Page 830 •HR 3200
1 ‘‘SEC. 4376. SELF-INSURED HEALTH PLANS.
2 ‘‘(a) IMPOSITION OF FEE.—In the case of any appli
3 cable self-insured health plan for each plan year, there is
4 hereby imposed a fee equal to the fair share per capita
5 amount determined under section 9511(c)(1) multiplied by
6 the average number of lives covered under the plan.
7 ‘‘(b) LIABILITY FOR FEE.—
8 ‘‘(1) IN GENERAL.—The fee imposed by sub
9 section (a) shall be paid by the plan sponsor.
10 ‘‘(2) PLAN SPONSOR.—For purposes of para
11 graph (1) the term ‘plan sponsor’ means—
12 ‘‘(A) the employer in the case of a plan es
13 tablished or maintained by a single employer,
14 ‘‘(B) the employee organization in the case
15 of a plan established or maintained by an em
16 ployee organization,
17 ‘‘(C) in the case of—
18 ‘‘(i) a plan established or maintained
19 by 2 or more employers or jointly by 1 or
20 more employers and 1 or more employee
21 organizations,
22 ‘‘(ii) a multiple employer welfare ar
23 rangement, or
24 ‘‘(iii) a voluntary employees’ bene
25 ficiary association described in section
26 501(c)(9),
Page 831 •HR 3200
1 the association, committee, joint board of trust
2 ees, or other similar group of representatives of
3 the parties who establish or maintain the plan,
4 or
5 ‘‘(D) the cooperative or association de
6 scribed in subsection (c)(2)(F) in the case of a
7 plan established or maintained by such a coop
8 erative or association.
9 ‘‘(c) APPLICABLE SELF-INSURED HEALTH PLAN.—
10 For purposes of this section, the term ‘applicable self-in
11 sured health plan’ means any plan for providing accident
12 or health coverage if—
13 ‘‘(1) any portion of such coverage is provided
14 other than through an insurance policy, and
15 ‘‘(2) such plan is established or maintained—
16 ‘‘(A) by one or more employers for the
17 benefit of their employees or former employees,
18 ‘‘(B) by one or more employee organiza
19 tions for the benefit of their members or former
20 members,
21 ‘‘(C) jointly by 1 or more employers and 1
22 or more employee organizations for the benefit
23 of employees or former employees,
24 ‘‘(D) by a voluntary employees’ beneficiary
25 association described in section 501(c)(9),
Page 832 •HR 3200
1 ‘‘(E) by any organization described in sec
2 tion 501(c)(6), or
3 ‘‘(F) in the case of a plan not described in
4 the preceding subparagraphs, by a multiple em
5 ployer welfare arrangement (as defined in sec
6 tion 3(40) of Employee Retirement Income Se
7 curity Act of 1974), a rural electric cooperative
8 (as defined in section 3(40)(B)(iv) of such Act),
9 or a rural telephone cooperative association (as
10 defined in section 3(40)(B)(v) of such Act).

Page 825 •HR 3200
5 ‘‘(c) FAIR SHARE PER CAPITA AMOUNT.—
6 ‘‘(1) COMPUTATION.—
7 ‘‘(A) IN GENERAL.—Subject to subpara
8 graph (B), the fair share per capita amount
9 under this paragraph for a fiscal year (begin
10 ning with fiscal year 2013) is an amount com
11 puted by the Secretary of Health and Human
12 Services for such fiscal year that, when applied
13 under this section and subchapter B of chapter
14 34 of the Internal Revenue Code of 1986, will
15 result in revenues to the CERTF of
16 $375,000,000 for the fiscal year.
17 ‘‘(B) ALTERNATIVE COMPUTATION.—
18 ‘‘(i) IN GENERAL.—If the Secretary is
19 unable to compute the fair share per capita
20 amount under subparagraph (A) for a fis21
cal year, the fair share per capita amount
22 under this paragraph for the fiscal year
23 shall be the default amount determined
24 under clause (ii) for the fiscal year.
Page 826 •HR 3200
1 ‘‘(ii) DEFAULT AMOUNT.—The default
2 amount under this clause for—
3 ‘‘(I) fiscal year 2013 is equal to
4 $2; or
5 ‘‘(II) a subsequent year is equal
6 to the default amount under this
7 clause for the preceding fiscal year in
8 creased by the annual percentage in
9 crease in the medical care component
10 of the consumer price index (United
11 States city average) for the 12-month
12 period ending with April of the pre
13 ceding fiscal year.
14 Any amount determined under subclause
15 (II) shall be rounded to the nearest penny.
16 ‘‘(2) LIMITATION ON MEDICARE FUNDING.—In
17 no case shall the amount transferred under sub
18 section (b)(4)(B) for any fiscal year exceed
19 $90,000,000.

Daily Digest for August 19th

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Chip Bennett Sorry for the spam, everyone. Somehow my account must have gotten hacked. While I was off the grid (at the hospital). Any ideas how that is? [#].

Daily Digest for August 18th

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[Twitter account hacked. Spam link deleted.]

HR3200: You Will Lose Your Current Insurance

Filed in Politics, Social IssuesTags: Constitutional Rights, Health/Nutrition, HR3200, ObamaCare

HR3200 - Reading The Bill: You Will Lose Your Current Insurance

I'm really getting sick of supporters of ObamaCare admonishing those who oppose it to read the bill. So, I'm starting a series in which I do just that, framing my opposition to the bill by referencing the actual wording of the proposed legislation.

Up first: Obama's claim that "if you like your current plan, you can keep it."

This claim is a bald-faced lie, and one that I will demonstrate using the wording of the bill itself. Whatever your private insurance coverage is today, whether or not you are satisfied with it, you will be forced to move to another plan by 2018.

First, some background. Page 14 defines "Y1" through "Y5" as years 2013 and following. So, anything in the bill that takes place in Y1 takes place in 2013, and Y5 in 2017.

Now, let's get into the heart of the matter. Start with this statement from Page 19, lines 1-5:

IN GENERAL.—Individual health insurance coverage that is not grandfathered health insurance coverage under subsection (a) may only be offered on or after the first day of Y1 as an Exchange-participating health benefits plan.

We can establish thus far that, as of January 1, 2013, all health insurance plans must be either a) an "Exchange-participating" benefits plan, or b) a grandfathered plan.

An "Exchange-participating" benefits plan is, essentially, any plan that is "qualified" under HR 3200, according to qualification rules that will be determined and implemented by the government.

So, what is a "grandfathered" plan? From the rhetoric coming from Obama, one would assume that all currently existing plans would be "grandfathered". Not so.

According to Page 16, lines 3-26, Section 102, PROTECTING THE CHOICE TO KEEP CURRENT COVERAGE:

GRANDFATHERED HEALTH INSURANCE COVERAGE DEFINED.—Subject to the succeeding provisions of this section, for purposes of establishing acceptable coverage under this division, the term ‘‘grandfathered health insurance coverage’’ means individual health insurance coverage that is offered and in force and effect before the first day of Y1 if the following conditions are met:

(1) LIMITATION ON NEW ENROLLMENT.—

(A) IN GENERAL.—Except as provided in this paragraph, the individual health insurance issuer offering such coverage does not enroll any individual in such coverage if the first effective date of coverage is on or after the first day of Y1.

(B) DEPENDENT COVERAGE PERMITTED.—Subparagraph (A) shall not affect the subsequent enrollment of a dependent of an individual who is covered as of such first day.

(2) LIMITATION ON CHANGES IN TERMS OR CONDITIONS.—Subject to paragraph (3) and except as required by law, the issuer does not change any of its terms or conditions, including benefits and cost-sharing, from those in effect as of the day before the first day of Y1.

See that? Not all pre-existing plans will be considered as "grandfathered"; but rather only those that meet two very important conditions. To be considered "grandfathered", a plan must:

  1. Exist prior to January 1, 2013,
  2. Not enroll any new members on or after January 1, 2013 (except for adding dependents to existing plans, and
  3. Not change any of its terms or conditions on or after January 1, 2013

Now, how tenable are those requirements? Not very.

Are you insured through your employer? Do you think that your company will hire any new employees on or after January 1, 2013? Do you think that your employer will want to add those new employees to the company insurance plan? Do you think that your company might want to negotiate new or better coverage, or changes to deductibles, or make any other routine changes to your plan?

Of course. And if so, your insurance plan will no longer be grandfathered. Once it is no longer grandfathered, it will be subject to government control and subject to the requirements and qualifications for "Exchange-participating" plans.

However, let's make the extreme assumption that such a plan will exist, and will remain viable. You're in the clear, right? You'll be able to keep that coverage for as long as your grandfathered plan doesn't change and doesn't enroll any new members, right?

Wrong.

According to page 17, lines 11-19, Sec. 102(b), GRACE PERIOD FOR CURRENT EMPLOYMENT
9 BASED HEALTH PLANS
:

IN GENERAL.—The Commissioner shall establish a grace period whereby, for plan years beginning after the end of the 5-year period beginning with Y1, an employment-based health plan in operation as of the day before the first day of Y1 must meet the same requirements as apply to a qualified health benefits plan under section 101, including the essential benefit package requirement under section 121.

Now, what is "an employment-based health plan in operation as of the day before the first day of Y1"? You guessed it: an otherwise "grandfathered" plan.

This clause clearly indicates that "grandfathered" plans are only truly grandfathered for the first five years (2013-2017). After this "grace period", all pre-existing employment-based health plans will be subject to government control and subject to the requirements and qualifications for "Exchange-participating" plans.

Thus, we have indisputably established that, according to the wording of HR 3200, you will be forced into a different health coverage plan from the one you have today, by 2018.

For reference and context, below is TITLE I—PROTECTIONS AND STANDARDS FOR QUALIFIED HEALTH BENEFITS PLAN Subtitle A—General Standards, pages 14-19 of HR 3200:

Page 14 •HR 3200

14 TITLE I—PROTECTIONS AND
15 STANDARDS FOR QUALIFIED
16 HEALTH BENEFITS PLANS
17 Subtitle A—General Standards
18 SEC. 101. REQUIREMENTS REFORMING HEALTH INSUR
19 ANCE MARKETPLACE.
20 (a) PURPOSE.—The purpose of this title is to estab
21 lish standards to ensure that new health insurance cov
22 erage and employment-based health plans that are offered
23 meet standards guaranteeing access to affordable cov
24 erage, essential benefits, and other consumer protections.

Page 15 •HR 3200

1 (b) REQUIREMENTS FOR QUALIFIED HEALTH BENE
2 FITS PLANS.—On or after the first day of Y1, a health
3 benefits plan shall not be a qualified health benefits plan
4 under this division unless the plan meets the applicable
5 requirements of the following subtitles for the type of plan
6 and plan year involved:
7 (1) Subtitle B (relating to affordable coverage).
8 (2) Subtitle C (relating to essential benefits).
9 (3) Subtitle D (relating to consumer protec
10 tion).
11 (c) TERMINOLOGY.—In this division:
12 (1) ENROLLMENT IN EMPLOYMENT-BASED
13 HEALTH PLANS.—An individual shall be treated as
14 being ‘‘enrolled’’ in an employment-based health
15 plan if the individual is a participant or beneficiary
16 (as such terms are defined in section 3(7) and 3(8),
17 respectively, of the Employee Retirement Income Se
18 curity Act of 1974) in such plan.
19 (2) INDIVIDUAL AND GROUP HEALTH INSUR
20 ANCE COVERAGE.—The terms ‘‘individual health in
21 surance coverage’’ and ‘‘group health insurance cov
22 erage’’ mean health insurance coverage offered in
23 the individual market or large or small group mar
24 ket, respectively, as defined in section 2791 of the
25 Public Health Service Act.

Page 16 •HR 3200

1 SEC. 102. PROTECTING THE CHOICE TO KEEP CURRENT
2 COVERAGE.
3 (a) GRANDFATHERED HEALTH INSURANCE COV
4 ERAGE DEFINED.—Subject to the succeeding provisions of
5 this section, for purposes of establishing acceptable cov
6 erage under this division, the term ‘‘grandfathered health
7 insurance coverage’’ means individual health insurance
8 coverage that is offered and in force and effect before the
9 first day of Y1 if the following conditions are met:
10 (1) LIMITATION ON NEW ENROLLMENT.—
11 (A) IN GENERAL.—Except as provided in
12 this paragraph, the individual health insurance
13 issuer offering such coverage does not enroll
14 any individual in such coverage if the first ef
15 fective date of coverage is on or after the first
16 day of Y1.
17 (B) DEPENDENT COVERAGE PER
18 MITTED.—Subparagraph (A) shall not affect
19 the subsequent enrollment of a dependent of an
20 individual who is covered as of such first day.
21 (2) LIMITATION ON CHANGES IN TERMS OR
22 CONDITIONS.—Subject to paragraph (3) and except
23 as required by law, the issuer does not change any
24 of its terms or conditions, including benefits and
25 cost-sharing, from those in effect as of the day be
26 fore the first day of Y1.

Page 17 •HR 3200

1 (3) RESTRICTIONS ON PREMIUM INCREASES.—
2 The issuer cannot vary the percentage increase in
3 the premium for a risk group of enrollees in specific
4 grandfathered health insurance coverage without
5 changing the premium for all enrollees in the same
6 risk group at the same rate, as specified by the
7 Commissioner.
8 (b) GRACE PERIOD FOR CURRENT EMPLOYMENT
9 BASED HEALTH PLANS.—
10 (1) GRACE PERIOD.—
11 (A) IN GENERAL.—The Commissioner
12 shall establish a grace period whereby, for plan
13 years beginning after the end of the 5-year pe
14 riod beginning with Y1, an employment-based
15 health plan in operation as of the day before
16 the first day of Y1 must meet the same require
17 ments as apply to a qualified health benefits
18 plan under section 101, including the essential
19 benefit package requirement under section 121.
20 (B) EXCEPTION FOR LIMITED BENEFITS
21 PLANS.—Subparagraph (A) shall not apply to
22 an employment-based health plan in which the
23 coverage consists only of one or more of the fol
24 lowing:

Page 18 •HR 3200

1 (i) Any coverage described in section
2 3001(a)(1)(B)(ii)(IV) of division B of the
3 American Recovery and Reinvestment Act
4 of 2009 (Public Law 111–5).
5 (ii) Excepted benefits (as defined in
6 section 733(c) of the Employee Retirement
7 Income Security Act of 1974), including
8 coverage under a specified disease or ill
9 ness policy described in paragraph (3)(A)
10 of such section.
11 (iii) Such other limited benefits as the
12 Commissioner may specify.
13 In no case shall an employment-based health
14 plan in which the coverage consists only of one
15 or more of the coverage or benefits described in
16 clauses (i) through (iii) be treated as acceptable
17 coverage under this division
18 (2) TRANSITIONAL TREATMENT AS ACCEPT
19 ABLE COVERAGE.—During the grace period specified
20 in paragraph (1)(A), an employment-based health
21 plan that is described in such paragraph shall be
22 treated as acceptable coverage under this division.
23 (c) LIMITATION ON INDIVIDUAL HEALTH INSURANCE
24 COVERAGE.—

Page 19•HR 3200

1 (1) IN GENERAL.—Individual health insurance
2 coverage that is not grandfathered health insurance
3 coverage under subsection (a) may only be offered
4 on or after the first day of Y1 as an Exchange-par
5 ticipating health benefits plan.
6 (2) SEPARATE, EXCEPTED COVERAGE PER
7 MITTED.—Excepted benefits (as defined in section
8 2791(c) of the Public Health Service Act) are not
9 included within the definition of health insurance
10 coverage. Nothing in paragraph (1) shall prevent the
11 offering, other than through the Health Insurance
12 Exchange, of excepted benefits so long as it is of
13 fered and priced separately from health insurance
14 coverage.

Daily Digest for August 12th

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Daily Digest for August 7th

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Chip Bennett Chip Russ Carnahan, we're coming for you in 2010. Your bussed-in ACORN/union thugs and sham "townhalls" can't save you from your own cowardice and incompetence..

Daily Digest for August 6th

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Chip Bennett Chip Doesn't like applications that do things (like post to his wall) without his explicit permission. Just because he answers a poll question doesn't mean he gives the Polls application free reign. Learn to write well-behaved applications, devs..