  |
Federal Legislative
Update for 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
-
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.
-
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.
-
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.
-
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.
-
Protections for Women and Older Workers.
Thresholds will be increased permanently for workforces
that are older or predominantly female.
-
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.
-
Excludes the Cost of Dental and Vision Plans.
Dental and vision are exempted from the threshold.
-
Tax Only Affects Portion of Premium over
Threshold.
The tax would only touch the portion of the premium that
exceeded the cap.
|
 |