Thursday, December 30, 2010


Happy New Year
So here we are on the verge of 2011.  Listed below are some of the changes that are going into effect in 2011.....maybe.  The reason I say maybe is because we never know what is going to be taken out or watered down under PPACA, as in the case of employers moving their medical plans from one carrier to another terminates your grandfathered status.  As you know, that was overturned.  Click here for more information on this. 

PPACA in 2011

1)       Establish National Voluntary Long-Term Care Insurance (Class Act-Community Living Assistance Services and Support Program)- Average premium could be approximately $150/Month.  There is a 5 year Cliff Vesting (can't use for first five years of paying in). And you must be actively at work 3 out of the 5 years you are paying in.  For more information on this, click here.

2)       Employers must report value of each employees health coverage on their W-2.  Employer must report the entire cost, not just the employers portion.

3)       Limits OTC medication reimbursements in FSA, HSA, HRA unless prescribed.  You are not able to use your HSA for over the counter medications unless you have a prescription.  Get your doc to write you prescriptions for a year for all your OTC meds, you just need to keep in on file.

4)       Penalties for Unqualified distributions from HSA increased to 20% from 10%.

5)       Fees imposed on Pharmaceutical Manufacturers and Importers

 So with that said, I hope you all have a Happy and Safe New Year!

Thursday, December 23, 2010



Tuesday, December 14, 2010

Virginia, Judge Hudson, Just Said No!!.....To The Individual Mandate

In Virginia, U.S District Court Judge Henry Hudson stated in a 42 page opinion that "Neither the Supreme Court nor any court of appeals has extended Commerce Clause powers to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market". 

In other words, Judge Hudson, a 2002 republican appointee from former President George W. Bush, was the first federal Judge to "Just Say No" to the Individual Mandate.  However, two other Judges from Virginia and Michigan have upheld the law.  Both of these Judges are Democrat appointees. 

According to incoming Speaker of the House, John Boehner, "Cash-strapped states should carefully weigh the benefits of investing time and resources in Obamacare's implementation now that its central mandate (Individual Mandate) has been ruled unconstitutional.

So what does this mean?  Well since Judge Hudson only ruled against the Individual Mandate it means that the Federal Government can go ahead with setting up the rest of the legislation. And it seems that the White House isn't going to be eager to have this pushed to the Supreme Court where Republicans hold a 5-4 majority.  It could take as long as two years for it to finally arrive.

Also, this could mean that if the Individual Mandate is taken off the table, we are pretty much where we are now, except, all coverage will be guaranteed issue, which is "no questions asked health insurance".  Therefore, most of the people who get coverage will be the ones who need it.  And, as the health reform law is set-up, they will be able to get it any time they want, so why pay for it now when they don't need it?  Moreover, if only the people who need coverage are getting it, there will be huge adverse selection issues.  In turn, premiums will skyrocket and we could be in much, much worse shape than we are now. 

In addition, there is also a lawsuit that has been filed in Florida that has 20 states backing it and being heard by U.S. District Judge Roger Vinson.  The lawsuit states that the $2.5 Trillion  Health Care reform pushed through by the Obama Administration violates state government rights and would force huge spending requirements on already cash-strapped state governments.  The case is set to be heard on Thursday, December 16, 2010.

Monday, December 6, 2010

"Read My Lips, I'm Rolling Back Bush-Era Tax Credits".......Well, Perhaps Not.

In an address to the to the American people this evening, December 6, 2010, the President indicated that compromises needed to be made.   It seemed that he was talking more to democrats, almost trying to convince them that his decisions/compromises were necessary.  In his address, he slated several items which he was going to take back to the democratic caucus:
  1. Temporary 2% Reduction in Payroll Taxes
  2. 2 Year Extension of Bush-Era Tax Credits-At first, the President was trying to get the extension for the middle class only and remove it for Americans earning more than $250K per year. 
  3. 13 Month Extension on Unemployment Benefits
  4. Estate Tax Compromise-2 Years at 35% with a 5 Million Exemption
  5. 1 Year Reduction in Social Security Taxes-This was a late add-on. 
So why is this important to Health Reform (PPACA)?  It is important to health reform because these taxes could potentially have been a huge funding source for the reforms.  Just the elimination of the Bush-Era Tax credits alone could cost the Federal Government more that one trillion dollars.  This, in-turn, could hamper the amount the Federal Government would be able to push to the States in order to set-up the State-Run Health Reform Programs.  For more information on the funding of health reform,  please go to: "Guess Who Gets to Pay for Health Reform?" (PPACA)

Wednesday, December 1, 2010

The Class Act-Coming in 2011

Has anyone heard of the Community Living Assistance Services and Support Act or Class Act? (CLASS ACT) Well there really hasn't been too much discussed regarding this feature of the Health Reform (PPACA).  But it could be a good thing.....maybe. 

This is the Government-Run, Long Term Care Plan that is slated to go into effect in 2011.  As of right now, many of the details are yet to be ironed-out but below are some main points of the plan. 
  1. Average premium should be in the $150 per month range (less for youngers, more for olders)
  2. You must pay into the plan for 5 years before accessing any benefits
  3. You must be actively at work at least 3 out of 5 years
  4. Guaranteed Issue (Except for the limitations noted above)
  5. It is a voluntary plan primarily delivered through employers-employers are able to opt-out or opt-in.  If employers opt-in employees area able to opt-out on a case by case basis.
  6. According to The Congressional Budget Office (CBO), it projects the CLASS ACT will produce a total of $70 Billion in surplus by 2019. 

So these are the basic main points of the plan.  For many who would otherwise be un-insurable, this could be an excellent alternative to spending down assets and utilizing medicaid.

But, for those that are relatively healthy, have significant assets to protect, this may not be the option for you.  Those that are healthy will bypass this option and go to the individual market to purchase, arguably, better and more comprehensive coverage at a lower cost.  Therefore, what you are going to have is a huge pool of unhealthy people who will probably require Long Term Care at some point or another. 

Many critical thinkers believe that this plan is nothing more than a catastrophe waiting to happen.  According to Kent Conrad, (D-ND), Chairman of the Senate Budget Committee, speaking on the sustainability of the Class Act stated "a ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of."   

The 70 Billion surplus that the program is designed to achieve is primarily due, in large part, to not being able to access benefits for five years.  In other words there will be five years worth of buy-in and no benefits being paid out.  However, in that sixth year, as benefits are paid out,  the program will start a death spiral that will, more than likely,  be unsustainable. 

It would seem that the only way for this program to have any chance of being able to survive on its own would be to make the program mandatory, every person would need to buy in.  And we all know how well our current mandatory programs are working now. 

Make no mistake about this program, it is designed to subsidize the ever-increasing cost of those people who have no long term care insurance and are on medicaid.  If the government can get people to pay for something they are going to receive anyway, why not?