WHOLESALE DISTRIBUTION BEST PRACTICES

Leading wholesaler-distributors depend on NAW Institute for Distribution Excellence groundbreaking research studies because they help solve real-world business challenges.

 

YOUR 5-YEAR GROWTH ROADMAP


 

Order copies of Facing the Forces of Change®: Navigating the Seas of Disruption for everyone on your team!

 

NAW News

Health Care Reform

- April 2014

Throughout the four-year “life” of the Affordable Care Act (ACA), Congressional Republicans have waged an unrelenting battle – a battle that continues to rage today – to repeal/de-fund/delay/alter the President’s signature first-term legislation achievement known as Obamacare. Most recently, that battle featured House passage of HR 2575, “Save American Workers Act,” a bill to replace Obama Care’s 30 hours per week definition of “full time employee” with a 40 hours per week standard. This bill, with implications for the scope of Obama Care’s employer mandate, won the votes of 18 (of 199) Democratic House Members despite the White House’s voto threat. “Save American Workers Act” is not expected to advance in the US Senate. Neither is HR 4118, a House-passed (with 27 Democratic votes) to delay for one year the penalties for failure to comply with Obama Care’s individual mandate.

NAW and our allies in the employer community are working in various issue or subject matter-specific coalitions (principally Affordable Coverage Project, Affordable Health Benefits Coalition, Small Business Coalition for Affordable Health Care, StartOver!, and Stop the HIT Coalition) in the health care space to fix some of the Affordable Care Act’s most serious flaws. A recent, rare victory was achieved with the enactment of legislation (HR 4302, “Protecting Access to Medicare Act”) that includes repeal of the cap on deductibles for health plans in the small group market.

Other items included in the legislative mix are bills to delay and, ultimately, repeal the annual fee on health insurance providers (a/k/a the hidden health insurance tax or “HIT”); to repeal the employer mandate; to change the definition of “applicable large employer” to one who employs 100 or more full-time equivalent employees; to repeal the funding mechanism for the transitional reinsurance program in the individual market; and to protect self-funded health plans by excluding stop-loss insurance coverage from the definition of health insurance coverage. All face a steep uphill climb given Democratic control of the White House and the U.S. Senate.

Other noteworthy developments in the legislative space include the unveiling by Republican Senators Richard Burr (NC), Tom Coburn (OK) and Orrin Hatch (UT) of a reform package in summary form that focuses on patient-centered reforms, Medicaid modernization, medical liability reform, and tax reform that caps the exclusion of employment-provided health benefits.

Additionally, a group of Democratic Senators, many of whom are facing re-election in “red” states and who are considered to be vulnerable to some degree in the 2014 mid-term elections, have unveiled a series of proposals; some are bills, others are yet to be introduced, to change Obama Care in the ways that include: the offer of an additional, lower cost health plan (called the “Copper Plan”) to give consumers more affordable options; facilitation of the sale of health insurance across state lines; increasing the size standard for application of the employer mandate from 50 to 100 full time employees; and to liberalize Obama Care’s small business health care tax credits. The prospect for Senate consideration of these proposals remains unclear.

In the regulatory space:

In February 2014, the Treasury Department issued final rules for implementation of the ACA’s employer mandate. Rules include transition relief delaying until January 1, 2016 enforcement for employers with 50 – 99 full-time employees. Employers with 100 or more full-time employees must offer affordable minimum essential coverage to 70% of fujll-time employees on January 1, 2015; the ACA-mandated 95% threshold begins on January 1, 2016.

February 2014 also saw the Administration allow access to premium subsidies for health insurance purchased outside of the exchanges.

In March, the Administration extended for an additional two years (through October 2016) the one-year delay in requiring policies to meet ACA minimum coverage standards. (This extension is voluntary for states and insurers.)

Finally, in March 2014 the Internal Revenue Service issued final rules implementing ACA employer reporting requirements under §6055 and §6066 of the Internal Revenue Code. Under the former, employers report to the IRS information concerning the type and period of coverage offered for purposes of administering the ACA’s individual mandate; the latter for administering the ACA’s employer mandate.

From the judiciary:

On June 28, 2013, the U.S. District Court for the District of Columbia, in Stissell v. Department of Health & Human Services, granted HHS’s motion for dismissal, rejecting Stissell’s Origination Clause and Commerce Clause challenges to the ACA’s individual mandate. On July 15th, Stissell appealed this case to the U.S. Circuit Court of Appeals for the District of Columbia Circuit. Oral argument is scheduled for May 8th.

The issue in Hobby Lobby and Conestoga Wood Specialties Corp. v. Sebelius is whether a for-profit company can refuse to comply with a federal law on First Amendment religious freedom grounds. In late November, Hobby Lobby, in which the U.S. Court of Appeals for the 10th Circuit ruled for the company, and Conestoga Wood Specialties, in which the U.S. Court of Appeals for the Third Circuit ruled for the government (as have three other federal circuit courts of appeals) were consolidated for review by the U.S. Supreme Court. Oral argument was heard on March 25th; a ruling is expected by the end of the Court’s current term in June.

On March 25th, the US Court of Appeals for the District of Columbia heard arguments in Halbig v. Sebelius, a case in which the validity of ACA tax subsidies going to enrollees in federally-run exchanges is being challenged. (Just 14 states run their own exchanges; the rest are federally-run or assisted.)