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Federal Legislative
Update, March, 2010
On
February 25th Democrat and Republican leaders
joined President Obama at Blair House for a meeting on
health care reform. The President released a new
blueprint for health care reform that seeks to offer a
compromise between the House and Senate passed bills.
If enacted, the President’s plan would extend coverage
to 31 million Americans. Of particular importance is
the proposed excise tax provision on high cost health
care plans that was contained in the Senate passed
bill. The House passed bill did not contain such a
provision. The President’s new proposal maintains the
excise tax provisions with modifications. Plans for
state and local government workers and provided through
collective bargaining agreements would be exempt for
five years. The plan would also raise thresholds higher
for “high risk” professions. We will work to ensure
that law enforcement is clearly defined in bill language
considered in the House and Senate.
The President indicated that he would give Republicans
up to six weeks to make new proposals. Leaders of the
House and Senate will develop a compromise version of
the two bills into law. Discussions are centering around
having the House pass the Senate bill, accompanied by a
"sidecar'' bill that could fall within the "budget
reconciliation'' process (which cannot be filibustered)
This means that only a majority vote is required.
Excise Tax Provisions
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An Increase in the Threshold for Both Family
and Individual Coverage.
The threshold that the tax would impact for all
employer based health plans was increased from
$23,000 to $24,000 for families and $8,900 for
individuals. The threshold will increase annually
based on the inflation rate plus 1% starting in 2013
(excluding high cost states). If health premiums
increase more than is currently expected between
2010 and 2013, the initial thresholds will be raised
even more.
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Thresholds will be Higher if Health Costs Rise
More than Expected.
If health premiums rise more than is currently
expected, the initial thresholds will be raised so
that plans would not be unfairly affected.
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Safeguards for High-Cost States.
The thresholds will be increased for the 17 states
with the highest health care costs. Starting in
2013, the threshold for these states will be 120
percent of the regular thresholds, 110 percent for
2014, and 105 percent for 2015.
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Permanent Adjustments.
The thresholds will be increased to $9,850 for
individual plans and $26,000 for family plans for
retirees and workers in high-risk professions. They
would also be adjusted to reflect unfair cost
differences based on age and gender.
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Protections for Women and Older Workers.
Thresholds will be increased permanently for
workforces that are older or predominantly female.
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Transitional Adjustments.
The thresholds for the 17 states with the highest
health care costs would be 120 percent of the
regular thresholds for 2013, 110 percent for 2014,
and 105 percent for 2015. Plans for state and local
government workers and provided through collective
bargaining agreements would be exempt for five years
to allow time for transitioning and to renegotiate.
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Excludes the Cost of Dental and Vision Plans.
Dental and vision are exempted from the threshold.
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Tax Only Affects Portion of Premium over
Threshold.
The tax would only touch the portion of the premium
that exceeded the cap.
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