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Market Populism: Karl Cates

The line -- if there is one -- between free-run capitalism and the greater good.

Dec 23

In health-care reform, compliance won't be negotiable

Posted by kcates in Obamahealth insurancehealth care



If health-care reform is enacted at long last, which looks to be the case, it'll be a step toward a more efficient and less costly system and will make our economy stronger in the long term and our country a morally improved place. So goes the argument for change.

There are immediate practical impacts on employers, of course, and here I'm going to crib heavily from The Employment Law Post, whose editors follow the issue obsessively and probably know it better than most pundits.  By their account - and as common sense would suggest - all but the most currently generous of employers would have to undertake a big rewriting of their insurance plans and a big realignment in how they administer such plans.

They would have to change some of the very fundamentals, by following directives that include the following:

-- Eliminating lifetime limits and "unreasonable" annual limits on benefits.

-- Providing preventive health care coverage

-- Removing exclusions that related to preexisting conditions.

-- Offering dependent coverage to unmarried dependents up to the age of 25 (if the plan covers dependent children)

-- Eliminating provisions that allow "rescission of coverage" for anything other than fraud.

Further, any employer with more than 200 full-time workers wouldhave to automatically enroll new employees, rather than making them wait for periods that typically extend to 90 days now.  They would be required to give details to new hires about the new health-insurance exchanges created by the law.  And they would have to do a lot more paperwork, including - as The Employment Law Post describes it - in the following realms:

-- "Health Insurance Reporting: An employer would have to report the value of each employee's health coverage provided by the employer on the employee's annual Form W-2. If an employee receives coverage under multiple plans (e.g., a major medical plan, a dental plan, a vision plan, and contributions to savings plans), the employer would disclose the aggregate value of all the plans. Additionally, employers with 50 or more full-time employees would have to provide certain information on a return each year, including whether they offer coverage to full-time employees, their coverage waiting periods, the number of full-time employees they had each month, and information on their full-time employees."

-- "Calculating Taxes and Penalties: Employers may have to pay taxes or penalties if their benefits are too good or if they aren't good enough. Unless your benefits fall in the middle, you may have to deal with more administrative headaches. If an employer with at least 50 full-time employees has even one employee that receives a federal subsidy to buy health insurance through the new exchanges, the employer would have to pay a fine for each of its full-time employees. Therefore, employers would have to determine how many of their employees would receive subsidies in order to calculate how much they would owe the government in fines."

Of course there's a deep and rancorous divide over health-care reform in general, but at the end of the day facts are facts and it's indisputable - once the Senate with its 60-vote filibuster-proof majority reconciles things with the House and President Obama signs the bill - the law will be the law. 

And compliance won't be negotiable.


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