Sec. 511. Election to satisfy health coverage participation requirements
&
Sec. 512. Health care contributions of nonelecting employers

        Section 511 describes the employers' option to offer an insurance package to their employees. If an employer chooses not to offer an insurance package they must instead pay a payroll tax. Also, if an employer chooses to offer an insurance package but the package doesn't comply with the set of establish standards, then they will be responsible to pay an excise tax

        Section 512 gives further details that describe the payroll tax in the previous section 511. The payroll tax employers will be expected to pay if they choose not to offer a compliant insurance package is set to be 8%. However, small businesses with payrolls less than $500,000 may be exempt from the payroll tax or accountable for an adjusted payroll tax proportional to 8%. Employers with payrolls greater than $500,000 will be responsible for the full amount of the tax.

        I believe there are some definite strong points to the provisions included in sections 511 and 512. First, they recognize small business and attempt to protect them from an unfair disadvantage that a full 8% tax might impose. Second, these stipulations attempt to minimize free riders. The Affordable Health Care for America Act is expected to cost 940 billion dollars over a ten-year period and it is important that the workforce engages the burden as a whole since it benefits the entire nation in terms of sustainability and productivity (Brown & O'Connor). Third, section 511 establishes the existence of standards for employer-offered insurance that will ensure employees are receiving an adequate-quality package.

        Some shortcomings of the two provisions are definitely evident. While the passing of HIPAA in 1996 was designed to address the negative affect of an employer-based insurance model on job mobility, it is apparent that this legislation is designed to continue with that trend. I view the relationship of employer and insurance as a barrier-to-exit. As I've mentioned in a previous blog posting our nation has long operated under free market fundamentals and the tether employer-based insurance creates between people and their jobs becomes obvious in a workforce that is not fluid and mobile, which are advantageous traits in competitive markets. There might also be a disincentive for small businesses to grow beyond a certain point to maintain a tax advantage. The 2010 Small Business Attitudes & Outlook Survey revealed that 80% of small businesses polled expect significantly or moderately growth in the next year but of those only 39% intend to hire additional employees. The survey also revealed that due to economic pressures 22% of small businesses have been forced to lay off employees. Small businesses may choose to stay smaller to avoid additional taxes. Finally, I'm also concerned with the payroll being used as the determining variable for the tax. $500,000 is a relatively small sum as far as wages go, especially in the service industry. It's likely that low capital, service oriented small businesses may operate with payrolls greater than the $500,000 mark but still only recognize small profits.

        According to Small Business Administration: Office of advocacy, small businesses dominantly account for the majority of businesses in the U.S. and for half of the national GDP. These contrasting statistics illustrate the balance between a potentially substantial tax revenue to fund an important public program and the vulnerability of small businesses in a turbid economic cycle.



Works Cited

"79 Percent of Small Businesses Revealed a Confident to Neutral Economic Outlook in 2010         - MarketWatch." MarketWatch - Stock Market Quotes, Business News, Financial News.         12 Apr. 2010. Web. 05 May 2010.

O'Connor, Patrick, and Carrie B. Brown. "Congressional Budget Office Releases Health Bill             Estimates - Patrick O'Connor and Carrie Budoff Brown - POLITICO.com." Politics,                 Political News - POLITICO.com. 18 Mar. 2010. Web. 05 May 2010.

"Office of Advocacy - Small Business Economy -- A Report to the President, Produced by             The Office of Advocacy, Office of Economic Research." Small Business                             Administration. U.S. Government: SBA: Office of Advocacy, 2009. Web. 06 May 2010.

Benjamin Yost

 

                In order for a bill's provisions from the House healthcare bill (Senate bill plus reconciliation bill), there is a process or timeline that it needs to go through. The necessary actions and considerations that need to be looked at are: Additional requirements for section 501(c)(3) hospitals Study and report of effect on veterans' health care Provide income exclusion for specified Indian tribe health benefits Codify economic substance doctrine and impose penalties for underpayments  Provision specifying that subsidies or tax credits received through health care reform will not affect individual's qualifications for other federal programs Tax Exemption for Certain Member-Run Health Insurance Issuers Tax Exemption for Entities Established Pursuant to Transitional Reinsurance Program for Individual Market in Each State Rules pertaining to how the IRS is involved in income-verification and individual status for the purposes of participation in the exchanges and subsidies received. All of these need to be looked at before they are signed into law. In order to finance $940 billion in new health care spending over the next ten years, the health care bill that the House of Representatives passed on Sunday evening contains many spending cuts to Medicare, along with many tax increases that are set to go into effect over the next decade. Courtesy of the Joint Committee on Taxation's scoring of each of the provisions in the bill and the CBO, this Tax Foundation Fiscal Fact contains a timeline of when each of the tax provisions in the bill is set to go into effect. This is referred to as the Fiscal Fact #218.

 

Sources- www.taxfoundation.org

This section of the health care reform bill deals with how the government plans on getting revenue for their expenses.  In this section, there is a general rule that is stated that every taxpayer, excluding corporation businesses, will receive a tax that is 5.4% of their modified adjusted gross income only if they make a high income of at least $1,000,000.  If the person plans on not filing joint tax returns, then the spouse will have to still pay for the tax if their income is half the requested amount.

If the citizen is considered a nonresidential alien then the amount that was stated in section 871(b) will be taxed to these individuals.  Although, if the person is living abroad, then the imposed tax will be reduced.  The tax that is imposed with this particular section will not be treated like a tax that's inflicted for purpose of deciding the amount of any credit with this chapter or for the purposes of section 55 in particular.  Subpart B states that the amendment made will be effective on December 31, 2010.

Individuals who make under $100,000,000 gains from this tax because they will not be getting charged but those who do make that amount and more will be suffering from this taxation.  In general, this taxation benefits the nation as a whole since those who make a lot of money often give to charity and such so this taxation is similar to that.  This tax encourages those who make a lot of money to help those who can not afford health care.

Overall, I think that this taxation is efficient because of the fact that it betters the nation as a whole.  Yes high income individuals will be taxed higher & they will be pointed out, but what can you really do will all that money?  High income individuals will be greatly helping out America.

Kan Yang

Sources:

Opencongress.org

http://www.taxpolicycenter.org/numbers/displayatab.cfm?Simid=325

http://www.dailykos.com/story/2009/11/8/802344/-HR-3962-page-numbersDivision-A

http://www.cbpp.org/cms/index.cfm?fa=view&id=2874

Under this provision, it states that the Secretary of Health and Human Services is to develop an exchange-participating health benefits plan (public health insurance option) that guarantees choice, competition, and stability of affordable, high quality coverage throughout the United States. The secretary's main responsibility is to create a low cost plan that provides access to care and unchanged quality. This public health insurance option can only be offered through the Health Insurance Exchange, which is a marketplace organized by the government for the purchasing of public health plans. Although the public health insurance option is provided by the secretary, the offering still has to follow all the requirements that private health plans have to abide by such as benefits, benefit levels, provider networks, notices, consumer protections, and cost sharing.

The public health insurance option should offer three to four different levels of benefits which are basic, enhanced, and premium plans. It may also offer a fourth benefit level known as premium plus plans. Under administrative contracting, the secretary may enter contracts with outside firms to perform the required administrative functions. To attend to potential complaints, the secretary must establish an office of the ombudsman who is in charge of investigating the complaints made by the private persons against the public health insurance option. To determine the appropriate premiums and payment rates, the secretary must collect data on the insured to improve quality and to reduce racial, ethnic, and other disparities in health and health care. The public health insurance option from the secretary is to be classified as a Qualified Health Benefit Plan in the Health Insurance Exchange. Persons insured under the public health insurance option are reserved the right to have access to federal courts to enforce their rights under the plan.

I think that this provision will benefit the consumers because the public health insurance option is constructed to be affordable and provide good quality care. This provision also promotes competition between insurers within the Health Insurance Exchange which will in turn drive down prices. Benefactors of this provision include people of color and other disparities. This is true in that the public health insurance option considers everyone in the population before determining the payment rates and premiums. This will help eliminate adverse selection. Another big benefit that consumers get out of the public health insurance option is that there is an appointed ombudsman to attend to any complaints they may have about their benefits or rights not fulfilled under the requirements.

Insurance providers are losers of the public health insurance option due to the increased competition. As stated before, competition will decrease policy prices and cause insurers to receive a lower profit margin.

I think this public health insurance option is efficient because it lowers the price for consumers as well as prevent insurers from overcharging.  It is also efficient because adverse selection is eliminated. This will minimize the use of more costly access to health care such as the emergency room.

http://www.scribd.com/doc/30902566/Recently-Proposed-Health-Care-Bill

http://www.politico.com/static/PPM41_hcr_section_by_section.html

This provision allows for qualified small employers to elect during a two year period, a tax for 50% of their employee health insurance expenses.  The definition for a 'qualified small employer' is an employer who has no more than 25 full time or full time equivalents and wages are less than $50,000, and and annual compensation level of less than $40,000.  Currently, since the bill passed, from 2010 to 2013, before the health insurance exchanges are established, small businesses will receive a tax credit of 35% of their health insurance costs.  Also, employers must already cover half of the insurance premiums for their employees.  Both small, for profit and not- for- profit are eligible and it is estimated that about $40 billion will be saved by 2019. 

What is good about this provision is that it was effective January 2010, therefore, small businesses can now provide health insurance for their workers and they will also receive immediate help with their premium costs if they already do provide insurance.  According to the Council of Economic Advisers, they estimated that 4 million small businesses are eligible for the credit if they already provide health insurance.  This means that as more small business owners are able to join state pools or exchanges, it will lower their costs and give them leverage when negotiating for coverage.  Additionally, they wont have to worry about being denied insurance.  However, some argue that the bill will increase the cost of health insurance for businesses who have more than 50 employees, increase taxes and cost of doing business in general.  Some believe that many small businesses wont even qualify for the tax credit.  Additionally, if you're the owner of the business, you're not counted as an "employee" for meeting eligibility requirements.  If you're self employed, you also cannot take advantage of the credit. 

I think that the gainers in this situation would be the small business employees because they can now have affordable and quality health insurance.  Overall, more people will be insured in hopes of reaching the U.S.'s goal of insuring all its residents.  More people would be in the pool therefore, lowering premiums.  Additionally, the employer can gain also by receiving the tax credit.  However, the employer can also lose because in order to take advantage of the tax credit, they must pay at least 50% of their workers health insurance expense.  So, you'd be paying out more money for these premiums then you'll get the credit after.  If small businesses cannot afford to pay half of their employees premiums then they wouldn't benefit at all from this bill.  Also, the owners who have their families employed do not benefit from the credit as well. 

I think this bill is beneficial to society because it will allow more people to have better and affordable health insurance.  If small businesses were not able to pay for coverage for their workers, when they become sick, overall productivity will decrease and possibly hinder the business' chances of survival in the market.  The credit will save the employer money that can be used towards covering more workers and provide more quality care.  The only thing that I disagree on is the bill stating that if your family works for your business, you will not get the credit for that employee. 


Amenda Xiong 

http://boss.blogs.nytimes.com/2010/03/31/how-the-health-care-law-affects-your-business/

http://www.whitehouse.gov/the-press-office/fact-sheet-small-business-health-care-tax-credit

http://www.foxnews.com/story/0,2933,589826,00.html

http://www.opencongress.org

 

 

There are three provisions in Sec. 202 that include the requirements for Grandfathered Healthcare Coverage, Grace period for current employment based health plan, and Limitation on individual health insurance coverage.

(1) Grandfathered health insurance coverage is private individual health insurance that was effective and offered before the first day of Y1 (2013). In order for private coverage to be immune from the requirements for insurance under the Healthcare Reform Bill, it must comply with certain conditions. These conditions are limitations on new enrollment, limitation on changes in terms or conditions, and restrictions on premium increases.

The" limitation on new enrollments" states that private insurers cannot enroll new individuals into their private health program on or after the first day of Y1. This limitation does not apply to later enrollment of dependent(s) of an individual who is already enrolled in a private health insurance prior to the start of Y1.

Subject to "Restrictions on premium increases" in the succeeding paragraph, the "limitation on changes in terms or conditions" requires that private health insurers do not change any of its term or conditions including benefits and cost sharing that already is effective before the start of Y1.

"Restrictions on premium increases" limits private health issuers from price discrimination based on the risk groups. Premium increases/decreases must apply for all risk group enrollees or it cannot be applied at all.

(2) Under the Grace period for current employment based health plan section, the Healthcare Reform Bill states that an employment based health plan that is in effect before the first day of Y1 should have a grace period of 5 years to adapt to the requirements of a Qualified Health Benefit Plan. After the fifth year, current employment based health plans must meet all the requirements. During the grace period, the current employment based health plan is treated as an acceptable coverage.

(3) Limitation on individual health insurance coverage states that any individual health insurance coverage that is not grandfathered can only be offered on or after the first day of Y1 as a participant of the Health Insurance Exchange.

 

I think that this provision is beneficial for everyone because those who want to keep their old private plans can do so without being penalized and those who choose to have public health insurance can purchase it through the Health Insurance Exchange. Enrollees who choose to stay with their private health insurance plans will be protected from price discrimination as well as adverse selection. Private health insurers may lose from this provision because they may not make as much profit due to all of the restrictions that they have to comply with. If this is a problem, they have the option to remain a private insurer and not accept any new enrollees or they can join the Health Insurance Exchange and be subject to the rules of the public plan. Another benefit of this provision is for those who have employment based insurance coverage. This is because they are granted sufficient time within the five year grace period to transition from employment based insurance to Qualified Health Benefit Plans.  I believe that with this provision, the U.S. healthcare system is one step closer to the French Healthcare system, which is said to be one of the best healthcare systems in the world.

 

http://www.theattackdemocrat.com/2009/11/house-final-bill-title-iiprotections.html

http://www.opencongress.org/bill/111-h3962/text

http://health.burgess.house.gov/UploadedFiles/House_HCR_bill.pdf

http://www.aarp.org/community/groups/displayTopic.bt?groupId=44&topicId=3057602&rview=false&pageNum=3

http://www.theattackdemocrat.com/2009/11/house-final-bill-title-iiprotections.html

Section 321 - 330

This provision requires the Secretary of Health and Human Services to develop a public health insurance plan within the Health Insurance Exchange.  The Health Insurance Exchange is an organized marketplace to purchase health insurance set up through a government entity.  The exchange would benefit people without access to employer insurance or a public plan like Medicaid.  This also includes self-employed people buying insurance on their own. The Exchange will help insurers compete in cost efficient ways and expand insurance coverage to more people. 

Exchanges are not insurers, but would contract with private insurers to offer a public plan option to cover specific populations.  Premiums for the public option are based on geographic locations and are required to cover the cost of coverage and administrative costs of the plan. Furthermore, the Secretary of Health and Human Services negotiates payment for health care providers and items and services.  

From an economic perspective, it would not be efficient because it limit choice for consumers wanting to purchase less or more coverage.  In addition, with the market share too small and limited eligibility, it could increase premiums and promote "cherry-picking" of customers. Overall, I think the exchange would increase insurance enrollment, deliver financial support as well as spreading risk and controlling costs.

 

Tang Xiong

http://edlabor.house.gov/documents/111/pdf/publications/AHCAA-SECBYSEC-102909.pdf

This provision of the Affordable Health Care for America Act begins by establishing that the public health option is only available through the Health Insurance Exchange and must meet all of the requirements to Exchange-participating benefits plans.  A health insurance exchange is an organized marketplace where customers can purchase health insurance that is set up by the government to help insurers comply with the consumer protections or laws that are designed to ensure fair competition and the free flow of truthful information in the marketplace, compete in cost-efficient ways, and expand coverage to more people. The provision goes on to say that the secretary must establish geographically adjusted premium rates for the public option enabling the public options ability to fully finance health benefits and administrative costs. Also to negotiate rates  for items and services so that the payment rates are not lower than Medicare rates but not higher than rates paid by QHBP offering entities. Finally that enrolling in this option is voluntary.

 

I really believe that having a health insurance exchange would be greatly beneficial to all Americans. We all know the big insurance company's have been lobbying against this public option because they believe that it is impossible to compete with the government.  So, in light of this, the big insurance companies may be considered the losers because in order to compete with the government they are going to have to lower the price of their premiums, which may mean lower salaries and bonuses for the executives.    I know if we had have a market where Americans can quickly shop for a health care plans, compare their benefits and prices, and choose the plan that's best for them, our nations uninsured rate would plummet. No plan should deny coverage because of a preexisting condition. All of these plans should include an affordable basic benefit package that includes prevention, and protection against catastrophic costs. I believe it is important to have the choice of a public health insurance option while allowing the ability to acquire a private plan. This will give people a better range of choices, make the health care market more competitive, and keep insurance companies on their toes.

 

Sources:

http://www.opencongress.org/

www.healthreform.gov

 

 

House bill H.R.3962 - Affordable Health Care for America Act

Section 201: Requirements Reforming Health Insurance Marketplace

 

Section 201 titled "Requirements Reforming Health Insurance Marketplace broadly outlines standards to ensure that new health insurance coverage and employment based health plans that are offered meet standards guaranteeing access to affordable coverage, essential benefits, and other consumer protections.  One requirement is that a health benefits plan will not be a qualified health benefits plan under this provision unless the plan meets the applicable requirements related to affordable coverage, essential benefits, and consumer protection. A requirement for employer based health plans is that an individual should be treated as being enrolled in an employer based health plan if the individual is a participant or beneficiary in such plan.

 

The final part of this bill states that the Commissioner may permit a qualified health benefits plan to provide coverage through a qualified direct primary care medical home plan, as long as the qualified health benefits plan meets all requirements that are otherwise relevant. I believe this part of the provision would reduce costs. Direct primary care medical homes can typically service approximately 90 percent of the medical issues most people need to see a doctor for. This kind of medical care can also remove time consuming and costly insurance reimbursement processes from routine and inherently low cost services and procedures. 

 

I found this provision for the most part to be very vague and my main question, which I couldn't find an answer to was, what will be considered standardized care? This provision has very broad ideas, which could have potential of working but more details are needed. A drawback from this provision is that employers may be the losers from this bill because they will be force to comply with the new requirements. Although I have some questions about this provision, I think overall it would be beneficial for improving access to health care for people at all income levels and for employers looking to provide coverage to their employees. With this bill, people will be ensured access to necessary care, which in return will reduce the costs of people waiting until emergencies to seek care. There is also potential for significant reduction in costs, which would lead to lower premiums.

 

 

http://www.opencongress.org/bill/111-h3962/text

http://www.dpcare.org/

http://edlabor.house.gov/documents/111/pdf/publications/AHCAA-SECBYSEC-102909.pdf

 

 

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