Archive | Employers Reaction to Bill

Another Obamacare provision for employers delayed

The Obama administration plans to delay enforcement of yet another Obamacare provision, according to a New York Times report. This line in the law would ban employers from discriminating “in favor of highly compensated individuals” when it comes to health insurance eligibility or benefits. Effectively, the provision prevents employers from providing their top executives cushy health benefits while low-level employees are given less optimal health insurance options.

  • The IRS will not enforce the provision in 2014 because they simply haven’t yet gotten around to actually writing the regulations that employers must follow, even though the Affordable Care Act was signed into law almost four years ago.
  • Obamacare originally required the IRS to enforce the health benefit “discrimination” ban just six months after the law was passed in March 2010. The Obama administration announced in 2010 that officials needed more time to write the rules, but assured Americans that the regulations would be finalized before Obamacare actually launched.

Years later, the IRS appears to still be grappling with the same questions about implementing the provision. IRS spokeswoman Michelle Eldridge denied in a statement that the agency had approved any new delay.

  • “The IRS has not announced any new or additional information on this issue,” Eldridge said. “The New York Times story refers to IRS Notice 2011-1, which was released to the press on December 22, 2010. That Notice stated that under Public Health Service Act, Section 2716 will not apply until after generally applicable guidance is issued, because the statute requires regulatory detail in order to operate properly.”
  • IRS officials appear to be stymied by the “regulatory detail” of the provision. For the IRS to mandate non-discrimination in health plans for employees with different compensations, the agency must decide how to quantify the value of employer-provided health benefits, how to define “highly compensated officials” and issue a final determination on what constitutes discrimination.
  • The tax agency has a series of scenarios made complicated by Obamacare’s structure that it will have to take into consideration before issuing guidance. Some low-earning employees may opt out of employer-sponsored health insurance in favor of increased subsidies via an Obamacare exchange, for example, while higher executives that aren’t privy to taxpayer subsidies for coverage do not. The IRS has yet to determine whether that employer would be discriminating even if the employer health plan has the same value for all employees.
  • Obamacare’s prescription for violating the ban is a $100 daily excise tax for each individual that was “discriminated” against.

*Modified from a dailycaller.com article

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New ObamaCare fees coming in 2014

Here comes the ObamaCare tax bill. The cost of President Obama’s massive health-care law will hit Americans in 2014 as new taxes pile up on their insurance premiums and on their income-tax bills.

Most insurers aren’t advertising the ObamaCare taxes that are added on to premiums, opting instead to discretely pass them on to customers while quietly lobbying lawmakers for a break.

But one insurance company, Blue Cross Blue Shield of Alabama, laid bare the taxes on its bills with a separate line item for “Affordable Care Act Fees and Taxes.”

  • The new taxes on one customer’s bill added up to $23.14 a month, or $277.68 annually, according to Kaiser Health News. It boosted the monthly premium from $322.26 to $345.40 for that individual.
  • The new taxes and fees include a 2 percent levy on every health plan, which is expected to net about $8 billion for the government in 2014 and increase to $14.3 billion in 2018.
  • There’s also a $2 fee per policy that goes into a new medical-research trust fund called the Patient Centered Outcomes Research Institute.
  • Insurers pay a 3.5 percent user fee to sell medical plans on the HealthCare.gov Web site.

ObamaCare supporters argue that federal subsidies for many low-income Americans will not only cover the taxes, but pay a big chunk of the premiums.

But ObamaCare taxes don’t stop with health-plan premiums.

  • Americans also will pay hidden taxes, such as the 2.3 percent medical-device tax that will inflate the cost of items such as pacemakers, stents and prosthetic limbs.
  • Those with high out-of-pocket medical expenses also will get smaller income-tax deductions.
  • Americans are currently allowed to deduct expenses that exceed 7.5 percent of their annual income. The threshold jumps to 10 percent under ObamaCare, costing taxpayers about $15 billion over 10 years.

Then there’s the new Medicare tax.

  • Under ObamaCare, individual tax filers earning more than $200,000 and families earning more than $250,000 will pay an added 0.9 percent Medicare surtax on top of the existing 1.45 percent Medicare payroll tax.
  • They’ll also pay an extra 3.8 percent Medicare tax on unearned income, such as investment dividends, rental income and capital gains.

Modified from a NewYorkPost.com article

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California votes against extending canceled health policies

Spurning President Obama’s plan for canceled policies, California’s health insurance exchange voted against any extension for about 1 million policyholders in the state. The five-member board of the exchange voted unanimously to keep its current requirement that insurers terminate most individual policies Dec. 31 because they don’t meet all the requirements of the Affordable Care Act.

  • The decision ends a weeklong drama over what would happen for policyholders who will lose their existing coverage at year-end and face finding replacement insurance that may cost them substantially more in many instances. Covered California, the state exchange, considered allowing renewals into 2014 as Obama proposed or a short-term extension through March to give people more time to shop.
  • But state leaders ultimately rejected those options. They expressed concerns about further confusing consumers and worried that widespread renewals could keep too many healthy customers out of the broader risk pool that will shape future rates.
  • “We know this transition is difficult and some people will be hurt,” said Covered California board member Susan Kennedy. “But delaying the transition won’t solve a single problem.”
  • Covered California said 79,891 people have enrolled in private health plans through Tuesday. The state has outperformed the troubled federal exchange, which has struggled with an error-prone website and meager enrollment.

Modified from a latimes.com article

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Small Group Health Insurance “Cancellations”––The Next Shoe to Drop But a More Complicated One

Obamacare is impacting the small group insurance market in many of the same ways as the individual health insurance market.

While employers with less than 50 workers don’t have to provide coverage, if they do they are required to comply with the same essential benefit mandates, age rating changes, and pre-existing condition reforms the individual market faces.

THIS MEANS ESSENTIALLY ALL SMALL GROUP POLICIES CANNOT CONTINUE AS THEY ARE––THEY HAVE TO BE DISONTINUED.

  • The first small group renewals are now occurring––the January 1 renewals that typically have to be delivered during the month of November under state law.
  • Many employers are facing significant changes in order to comply with Obamacare and therefore price increases. The biggest rate increases are generally going to those employers with the youngest groups the most impacted by the new “age compression” rules.
  • Does this mean these small employers’ coverage has been outright cancelled and they will now send their workers to the exchanges?  No, at least not anytime soon. But that does not mean that lots of these small employers aren’t angry and confused.
  • Some small groups, but only a very few, benefit from the grandfather rules if their plan was in place in March 2010 and they haven’t made any but the slightest changes. Like the individual market that comes under the same grandfather rules, the Obama administration made those regulations so stringent almost no one is grandfathered.
  • Perhaps the most common means by which small groups are avoiding the big increases, at least for the first year, is through the early renewal strategy. Most states and health plans have allowed employers to change their renewal date to late in 2013 thereby allowing them to keep the old health plans for about another year. But this is a stay of execution, not a solution. Their old plans are toast when they next renew.
  • If the small employer doesn’t have access to the early renewal strategy, then they must face higher premium costs immediately. To offset these higher costs, at least in part, small employers are doing what they have always done––increasing deductibles and co-pays to try to keep the premiums close to what they were. This is also what the employers who used the early renewal strategy will have to consider come the end of 2014.

Will the small employer, faced with these increases, abandon their health plans and send their workers to the exchanges? Since so many have gotten that early renewal one-year stay of execution, we really won’t know that for a while.

The number of small employers offering health benefits was already on a years long steady and this certainly can’t help. But with all of that said, the simplistic, “Small employers are better off dropping coverage and sending them to the exchange,” is just too simplistic.

Let’s say an employer pays $7,000 a year toward the average worker’s health insurance benefit––typical in the small market. Let’s further say the employer could just give the worker that money in a pay raise and send them to the exchange.

First, the employer can’t just give them a payroll raise of $7,000. Increasing their wages has payroll tax and benefit cost implications––Social Security and Medicare taxes, workers compensation premiums, fringe benefit costs tied to payroll, vacation pay, and so on. That $7,000 would need to be reduced to about $6,000 to offset the employers payroll costs before it could go to the worker (and an employer with more than 50 workers would also be subject to the $2,000 fine for not providing health benefits and the “raise” would have to be further reduced).

Now the worker has $6,000 to take to the exchange. But wait, health insurance bought by an individual is not income tax preferenced––the worker has to pay state, federal, and payroll taxes of their own on this “raise.” Even if the worker is only in a 20% marginal bracket, this means the $6,000 just melted to about $5,000.

So the worker ends up with $5,000 to take to the exchange––about $400 a month. A higher income worker in a higher tax bracket might end up with only $4,000 net of taxes with which to buy insurance.

How does the worker fare with $5,000 to spend in the exchange? Remember the lower your income the higher the subsidies. If the worker has a very low income, they do very well––maybe even make a lot of money. If they are lower middle-income, they do OK. If they are middle to upper income they lose.

Who wins under this scheme? The lowest paid and least skilled workers. Who loses? The highest paid and most skilled, and presumably sought after workers. This strategy suddenly doesn’t look so smart if competing for skilled workers is what worries the employer.

It gets more problematic. The health insurance exchange subsidies are tied to family income, not what an employer pays their workers. An employee making $50,000 with a family could win under this scheme by being eligible for lots of subsidy. But if another $50,000 worker has a spouse also working and the household income is now $80,000 or $90,000 a year they would be disqualified for all or most of the federal health insurance subsidies.

So, this $50,000 worker does OK and that one has to pay most if not the full cost of health insurance out of their pocket.

It gets even more complicated. Employers often contribute more for family coverage and give single workers less because their coverage costs less. So, how do they pass out the raise when and if health benefits are terminated? Does a single worker get paid less for doing the same job going forward?

Just ditching the employer’s health insurance plan can be more attractive to businesses that are filled with low-income and unskilled workers. But any business that relies on even a few skilled and key employees will likely find this simplistic, The, “Just dump the insurance, give them a raise, and send them to the exchange,” idea has more holes than Swiss cheese.

They will use the early renewal strategy when they can to buy themselves a year. Then they will likely increase employee premiums and deductibles to keep the wolf from the door for maybe another year. But Obamacare caps out-of-pocket costs and employers will quickly bump up against that in a year or two.

*Modified from a Health Care Policy and Marketplace Review article

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Obama Officials In 2010: 93 Million Americans Will Be Unable To Keep Their Health Plans Under Obamacare

Obama administration knew that Obamacare would disrupt private plans. Disruption of the existing health insurance market—a disruption codified in law, and known to the administration—is only just beginning. It turns out that in an obscure report buried in a June 2010 edition of the Federal Register, administration officials predicted massive disruption of the private insurance market

  • “The Departments’ mid-range estimate is that 66 percent of small employer plans and 45 percent of large employer plans will relinquish their grandfather status by the end of 2013,” wrote the administration on page 34,552 of the Register.
  • All in all, more than half of employer-sponsored plans will lose their “grandfather status” and get canceled. According to the Congressional Budget Office, 156 million Americans—more than half the population—was covered by employer-sponsored insurance in 2013.

On Tuesday, White House spokesman Jay Carney attempted to minimize the disruption issue, arguing that it only affected people who buy insurance on their own. “That’s the universe we’re talking about, 5 percent of the population,” said Carney. “In some of the coverage of this issue in the last several days, you would think that you were talking about 75 percent or 80 percent or 60 percent of the American population.”

By “coverage of this issue,” Carney was referring to two articles. The first, by Chad Terhune of the Los Angeles Times, described a number of Californians who are seeing their existing plans terminated and replaced with much more expensive ones. “I was all for Obamacare until I found out I was paying for it,” said one.

The second article, by Lisa Myers and Hanna Rappleye of NBC News, unearthed the aforementioned commentary in the Federal Register, and cited “four sources deeply involved in the Affordable Care Act” as saying that “50 to 75 percent” of people who buy coverage on their own are likely to receive cancellation notices due to Obamacare.

But Carney’s dismissal of the media’s concerns was wrong, on several fronts. Contrary to the reporting of NBC, the administration’s commentary in the Federal Register did not only refer to the individual market, but also the market for employer-sponsored health insurance.

  • Section 1251 of the Affordable Care Act contains what’s called a “grandfather” provision that, in theory, allows people to keep their existing plans if they like them. But subsequent regulations from the Obama administration interpreted that provision so narrowly as to prevent most plans from gaining this protection.
  • How many people are exposed to these problems? 60 percent of Americans have private-sector health insurance—precisely the number that Jay Carney dismissed. As to the number of people facing cancellations, 51 percent of the employer-based market plus 53.5 percent of the non-group market (the middle of the administration’s range) amounts to 93 million Americans.
  • Another 25 million people, according to the CBO, have “nongroup and other” forms of insurance; that is to say, they participate in the market for individually-purchased insurance. In this market, the administration projected that “40 to 67 percent” of individually-purchased plans would lose their Obamacare-sanctioned “grandfather status” and get canceled, solely due to the fact that there is a high turnover of participants and insurance arrangements in this market. (Plans purchased after March 23, 2010 do not benefit from the “grandfather” clause.) The real turnover rate would be higher, because plans can lose their grandfather status for a number of other reasons.

Will these canceled plans be replaced with better coverage?

  • President Obama’s famous promise that “you could keep your plan” was not some naïve error or accident. He, and his allies, knew that previous Democratic attempts at health reform had failed because Americans were happy with the coverage they had, and opposed efforts to change the existing system.
  • Now, supporters of the law are offering a different argument. “We didn’t really mean it when we said you could keep your plan,” they say, “but it doesn’t matter, because the coverage you’re going to get under Obamacare will be better than the coverage you had before.”

Senator Ron Johnson (R., Wisc.) and Rep. Fred Upton (R., Mich.) have proposed the “If You Like Your Health Care Plan You Can Keep It Act,” with dozens of co-sponsors. The two-page bill simply states that “nothing in [the Affordable Care Act] shall be construed to require that an individual terminate coverage under a group health plan or health insurance coverage in which such individual was enrolled during any part of the period beginning on the date of enactment of this Act and ending on December 31, 2013.”

*Modified from an article by Avik Roy on Forbes.com

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Why Obama Should Be Freaked Out Over Obamacare

President Obama said Monday he’s “frustrated” by the disastrous launch of an online computer marketplace for Obamacare. It’s worse than we know, this is the easy part, and millions of Americans could be hurt.

Here are five reasons why frustration isn’t enough. He should be frightened.

  • 1. It’s worse than his team has let on. The White House has tried to position the failed first days of Obamacare as mere hiccups caused by the site’s popularity. Obama called them “kinks.” An administration spokesman told the Washington Post on Sunday that the “main driver of the problem is volume.” This is intentionally misleading.

The White House has heard complaints from insurance companies, consumers, and health policy experts about issues embedded deeply in the online system. For example: inaccurate information provided to people about federal tax credits; low-income people erroneously told they don’t qualify for Medicaid; and insurance companies getting confusing information about who has signed up.

The administration refuses to say how many people have enrolled through the federal exchange, the key metric for determining how well the online service is working in states that didn’t set up their own exchanges. There are two possible explanations for the Obama administration’s unconscionable lack of transparency. Their process is so screwed up that they don’t have the data, which would be embarrassing. Or they have the data – and it’s embarrassing.

  • 2. This is the easy part. Finding and motivating people to take action online is the founding strength of Team Obama. This is what they do best. Managing a complex law is a different matter, and it’s fair to question whether the president and his team are up to it.

How do you convince healthy young Americans to pay for insurance they may not need in order to fund the program? Do companies shed workers and working hours to avoid coming under the law? Are people with cheap catastrophic plans forced to pay more in the exchanges? Tricky questions likes these will soon make the hard art of website design look like fingerpainting. “The online federal health care exchange, the heart of the Obamacare project, is such a rolling catastrophe that it may end up creating a major policy fiasco immediately rather than eventually,” wrote Ross Douthat in a New York Times column titled, “Obamacare, Failing Ahead of Schedule.”

  • 3. It reflects poorly on the president. Nobody expects the chief executive to be reviewing computer code or hosting East Room “hackathons.” But this falls on him. The CEO of a corporation or country is uniquely responsible for making sure the team is on task, and he or she is ultimately responsible if it’s not. In Obama’s case, did he demand thorough updates on the progress of the site? If so, did he ask the right questions? Did he put the right people on the job in the first place? Given the horrid first days of Obamacare, the answer to at least one of those questions must be “no.” 
  • 4. It reflects poorly on government. The public’s faith in government is at a record low, just as Obama is fighting Republicans on several fronts over the size and power of the federal bureaucracy. His administration needs to rapidly improve the online exchanges to stand any chance of convincing, say, young Americans to pay for insurance they don’t think they need. Beyond Obamacare, the Democratic Party’s reputation for competency is as stake.  The cost of the site is already $394 million, a massive amount compared to private-sector CMS work, and sure to grow.
  • 5. It could hurt Americans. For decades, politicians in both parties pledged to ease one of the leading causes of anxiety in the post-industrial age, the lack of affordable health care. Nearly 50 million Americans are uninsured, or about 15.4 percent of the population. Millions more are underinsured. Obamacare, enacted three years ago over the objections of Republicans, may or may not be the answer. But, as the White House likes to remind Republicans, it’s the law and it deserves a shot.

“The Affordability Care Act is not just a website,” Obama said Monday, “it’s much more.” True to a point, but the website is critical to the law’s purpose: helping millions of Americans bargain for better health care. Dismissing the extent of the problem and reminding voters that Republicans fought the law — which is essentially all Obama did in his Rose Garden remarks — is a deflection, which shouldn’t be confused with implementation or governing.

*Modified from a NationalJournalonline.com article

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Are they signing up for Obamacare, or for Medicaid (MediCal)?

How many people have tried to sign up for Obamacare? How many have completed the process? Those numbers are important, but let’s keep something else in mind here — there’s another important number that a lot of publications are failing to separate out. That is, how many people are enrolling in the private insurance plans within the Obamacare exchanges — as opposed to those applying who report very low incomes and get steered into the Medicaid program?

  • In terms of getting more people insured, it might seem like a minor detail. But the private insurance exchanges, a centerpiece of Obamacare, need a very large number of people to sign up if they are to be viable insurance pools. By the Obama administration’s estimate, they need about 7 million people to sign up for the exchanges nationwide. (They also estimate they need 2.7 million of those to be young/healthy types, a separate but related issue.) There is a separate goal of enrolling another 8 million poor people in Medicaid.
  • Yesterday, The Washington Post suggested that at least 185,000 people have signed up for Obamacare:. That sounds promising for the program even if it’s still well short of the pace needed to meet the goals. And then Oregon has just reported 56,000 enrollments. So isn’t everything going just fine?
  • In fact, no. When you see state enrollment numbers, you have to ask yourself this question: How many of those people are actually becoming Obamacare private insurance exchange customers, as opposed to people who (1) were always eligible but are just signing up for Medicaid for the first time, and (2) people who are newly eligible for Medicaid under the expanded coverage thresholds in some states?
  • In Oregon, that 56,000 number you’re hearing today is all Medicaid. Their online exchange doesn’t even work yet. Something similar is happening in many other states as well. Minnesota, for example, said it had 3,800 applicants. But when you scratch the surface, only 406 of these are Obamacare exchange applicants — again, most of the signups were low-income customers who were steered to Medicaid instead.  
  • California, has put 600,000 new people on Medicaid, but their last hard number of actual, completed applications for the exchanges was under 17,000. That’s over a week old, but I’m still skeptical when I see them say that 100,000 “are in some stage of applying for insurance on the marketplaces.” Why all those weasel words? Have those people completed applications — in which case California is doing great — or have they merely entered their zip code and started looking at plans? California may not release any reliable numbers on their exchange enrollment until next year.
  • Are these numbers going to add up to viable health insurance exchanges? A very sober assessment yesterday on the Corner, noting among other things that the slow trickle of signups, from the insurers’ perspective, is a true nightmare and even worse than if no one was signing up at all. If only “highly motivated consumers” are spending the hours it takes to get through right now, the exchanges are filling up with the people most likely to be very sick or old.

*Modified from a conservativeintel.com article

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Health Website Woes Widen as Insurers Get Wrong Data

Insurers say the federal health-care marketplace is generating flawed data that is straining their ability to handle even the trickle of enrollees who have gotten through so far, in a sign that technological problems extend further than the website traffic and software issues already identified. Emerging errors include duplicate enrollments, spouses reported as children, missing data fields and suspect eligibility determinations, say executives at more than a dozen health plans.

  • The latest round of problems has emerged after a technical bottleneck that blocked many potential customers from accessing the marketplace began to clear this week. People familiar with the development of the exchange said some technical problems improved this week.
  • HHS, which is running all or part of the marketplaces in 36 states, has repeatedly declined to answer specific questions about its handling of the rollout, including specific glitches, enrollment figures, or its plans to fix the problems. Health-department officials have pressured insurers to refrain from commenting publicly about the problems, according to executives at four health plans, who asked not to be named. The HHS declined to comment.
  • Of 209,000 users who began to register on healthcare.gov on Monday or Tuesday of this week, just over one-quarter finished the process, according to an estimate made by the analytics firm comScore for The Wall Street Journal. In the first week, only 10% did so. The estimates are based on a sampling of Internet users tracked by the company.
  • As more of those users attempted to sign up for plans this week, insurers began noticing problems with enrollment data. For now, they say they are largely able to manually correct the errors. But as enrollment increases—up to 7 million consumers are expected to sign up in the next 5½ months—that may not be possible, they worry.
  • After realizing that some applications listed up to three spouses in a single family, Blue Cross & Blue Shield of Nebraska, which has about 50 health-law enrollees, had to “stop those enrollments from going through the automated process,” said Matt Leonard, the insurer’s sales manager. “It takes an automated process and turns it into a manual process,” he said.
  • Sioux Falls, S.D.,-based Avera Health Plans has called each of its 21 incoming customers to make sure the data are correct. As consumers struggle to navigate healthcare.gov, some health-plan executives worry that only the sickest—those who most expect to need insurance—will persist in seeking coverage. If younger consumers who are on the fence about buying coverage find the process too onerous, insurers may end up with too few healthier members to offset the costs of less-healthy enrollees.
  • Tara Seidenberg, a 48-year-old paralegal from suburban Houston with multiple sclerosis, says she is likely to put up with all kinds of hurdles to buy coverage. After days of failed attempts to sign up on healthcare.gov, she is taking a break to wait for the glitches to resolve. She takes medications that cost $4,600 a month and her current coverage won’t be available next year. “I’m pretty much guaranteed to try it again,” Ms. Seidenberg said.

*Modified from a WSJ.com article

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Obamacare: Who will ignore law’s requirements?

Millions of Americans may be wrestling with computer glitches to try to sign up for Obamacare — but many people eligible just won’t bother and will pay a price for it. Some will flout the mandate to buy coverage on ideological grounds, a health insurance version of civil disobedience.

  • Some will opt for the penalty because it’s cheaper than paying for insurance, even with subsidies — as long as they don’t get sick and have to pay their own medical bills. And some are so confused about the president’s health care law that they may not even realize they have to pay a penalty — or a tax, as the Supreme Court called it — until they get slapped with the fine when they file their 2014 tax returns. And sign-up rates may be affected, too, if the technical problems on the exchange websites persist.

The new health exchanges need younger and healthier people to balance out the risk and prevent spiraling insurance costs. The mandate is one way of nudging them in. Here’s a look at who may opt out — and why they’ll do it.

The Card-Burners

  • In reality, there are no “Obamacare cards,” but some conservative groups, notably FreedomWorks, are using the imagery to promote resistance to the law, especially among younger and healthier people. “My guess is they need about 40 percent of the people in the exchanges to be young, healthy adults under 35,” Dean Clancy, vice president of public policy for FreedomWorks, said in an interview. “If they don’t get that, the premiums will go up in the second year. Insurance companies may back out because they can’t get enough people to sign up, … and the whole thing will collapse.”

The Calculators

  • Most people who sit out Obamacare will be motivated by math, not politics. These people — mostly the so-called young invincibles — would rather take their chances that they won’t need costly health care, pay the 95 bucks and not spend money on insurance. “The main reason the people will skip the exchange is not ideological but financial,” he said. “This sticker shock will be our best friend in the fight,” he said, referring to the cost of insurance in the exchanges.
  • Pro- and anti-Obamacare forces agree that much of people’s decisions on whether to sign up will boil down to dollars and cents. Individuals won’t know until they check out the exchanges — and access the troubled websites — exactly what their particular coverage options are and what those would cost.

The Confused

  • Many experts, including people interviewed at Intuit and H&R Block, expect that a large chunk of the people who pay the tax just won’t know the rules. “I would say a huge portion of the population is confused or ignorant of what will happen,” Clancy said. “I think a lot of people will drift along passively, unaware that the mandate applies to them.”

What Next?

  • The $95 penalty number is well-known — but it’s only part of the story. It’s actually $95 or 1 percent of taxable income, whichever is more. (The income penalty would be based on earnings over the so-called filing threshold — the amount earned before someone owes taxes.) For someone making $40,000 with standard deductions, it would mean about $300 more in taxes (or $300 less of a refund).
  • “I think that the $95 has been really well communicated, … but what has not been communicated as well is the 1 percent, and that is what we heard from clients this year and was really eye-opening,” said Meg Sutton, senior adviser on tax and health care services at H&R Block. By 2016, the tax will be higher — $695 or 2.5 percent of income, whichever is more.
  • The CBO broke down its projection of 6 million penalty payers by income. About 30 percent will have incomes too high for federal subsidies. Forty percent will have incomes between 200 percent and 400 percent of the federal poverty line, which makes them eligible for the middle range of subsidies. The remaining 30 percent will make less than 200 percent of poverty and would qualify for the highest subsidies — but low-income groups can be hard to reach and skeptical of government assistance.
  • “I think a lot of people will factor in things like, ‘Well, I ought to have health insurance,’ or, ‘I have kids and want to make sure they’re covered.’ … Or, ‘Oh I haven’t had health insurance for years, but I’m getting older and having health problems,’” Intuit’s Williams said. “So you can envision all sorts of rationales that economists may or may not get to that are personal. … All of that is an art, not a science.

*Modified from a Politico.com article

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Health care law deadline updated

You’ll have to get health coverage by Valentine’s Day or thereabouts to avoid penalties for being uninsured, the Obama administration confirmed Wednesday. That is about six weeks earlier than a March 31 deadline often cited previously.

  • The explanation: Health insurance coverage typically starts on the first day of a given month, and it takes up to 15 days to process applications. You still have to be covered by March 31 to avoid the new penalties for remaining uninsured. But to successfully accomplish that you have to send in your application by the middle of February. Coverage would then start Mar. 1.
  •  The Jackson Hewitt tax preparation company first pointed out the wrinkle with the health care law’s least popular requirement. An administration official confirmed it. The official was not authorized to speak publicly and insisted on anonymity.
  • It’s the latest bit of confusion involving complex requirements of President Obama’s health care law, known as the Affordable Care Act. Adjustments to the law have ranged from the momentous to the mundane. The biggest one was a one-year delay of a requirement that larger employers offer coverage, announced this summer. More recently, the administration has postponed some Spanish-language capabilities of its enrollment website, as well as full functionality on the site small businesses use to sign up.
  • Brian Haile, senior vice president for health policy at Jackson Hewitt, said government agencies initially had different interpretations of the enrollment deadline. The Health and Human Services department, which is taking the lead in implementing the law, kept referring to a March 31 deadline. The Internal Revenue Service, which handles the financial aspects, suggested that the deadline had to be in February.
  • ‘‘There were inconsistencies,’’ said Haile, adding it took several inquiries by Jackson Hewitt in the last few weeks to clear up the uncertainty. The health care law was designed to cover the uninsured through a mix of government-subsidized private insurance and a major expansion of the Medicaid safety net program.

The rollout of online insurance markets this month has been snarled by technical glitches that frustrated many consumers. House Republicans are still pressing their demand for a delay of ‘‘Obamacare’’ provisions, if not its total repeal, as a condition for lifting the partial government shutdown now in its second week.

Starting next year, the law requires virtually all Americans to have insurance or face a tax penalty, triggered after a coverage gap of three months. The penalty starts as low as $95 for 2014, but escalates in subsequent years.

*Modified from a Boston Globe article.

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