Health Care Reform Update 7.15.09

July 15, 2009

 

We received a couple of updates on the Health Care Reform Bill today.  I am going to do my best to summarize what I feel are the important points to each Bill:

 

 

 

Summary of House of Representatives Bill:

 

1)    Page 2 Sec. 122: Limits individual and family out of pocket expenses in the essential benefits offering to $5,000/$10,000.

2)    Page 4 Sec. 164:  The Bill provides a reinsurance program to reimburse the employer for 80% of the cost of healthcare expenses between $15,000-$90,000 for covered retirees between the ages of 55 and 64.   

3)    Page 4 Sec. 202:  The Bill creates an insurance exchange that would cover small employers with less than 10 employees and individuals.  In the second year of the exchange they will expand the small employer coverage to less than 20 employees. 

4)    Page 5 Sec. 204:   Based on the Bill it looks like traditional insurance companies will bid on providing the coverage for the insurance exchange covered group.

5)    Page 6 Sec. 221:  By 2013 the plan is to have a public health insurance plan choice offered within the insurance exchange.

6)    Page 8 Sec. 311/313:  The Bill states that employers must offer all of their employees health coverage, or if they choose not to offer coverage they must  pay an 8% payroll tax into the insurance exchange.  This 8% payroll tax also has to be paid if the employee declines the employer's offer for coverage.   

7)    Page 8 Sec. 312:  If the employer offers coverage they must contribute 72.5% of the employee premium and 65% of the family premium.

8)    Page 9 Sec. 401:  If an individual declines coverage under the employer's plan or through the insurance exchange they will be taxed at 2.5% of their modified adjusted gross income.  I assume the employer would still have to contribute the 8% payroll tax. 

9)    Page 9 & 10 Sec. 411/412 & 421:  These sections explain the payroll tax and how some small employers are exempt from this tax.

 

The remaining sections of this Bill center around Medicare reimbursement rates and other items related to Medicare.  Based on what I read the hospital and physician community cannot be happy with the bill.  The 8% payroll tax, the employer mandate to contribute 65% of the family premium and not being able to exclude certain classes of employees will affect the profitability of many businesses in a big way.

 

 

 

Sen. Kennedy's Committees Health Care Bill:

 

(I do not have the details on the Committees Bill, but I do I have the short summary above.  I hope to have the complete Bill in the next few days.) 

 

I know a lot of you want to know where this is all headed.  I can only give you my industry opinion at the present time.  I believe both the House and Senate have a long way to go to refining these bills.  And there will be some fierce debates on the subject that could delay the implementation of any Bill until 2010.   I also believe the Obama administration wants to provide coverage to the uninsured population, so I think many of the items listed above will get revised or deleted from the final Bill because the opposition will be just too great to get the Bill passed. 

 

More to come.

 

Call us with questions.

 

Thanks, 

Kevin D. Towery

President

Employee Benefits Analysis Corp.

Office #972-267-6218 x115

Cell #214-502-0508

kdtowery@ebenefitsanalysis.com

www.ebenefitsanalysis.com

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