A recent article was posted on www.ebn.benefitnews.com where Lydell C. Bridgeford discusses the ambitions of the health care proposal that was put forward by Senator Max Baucus. Senator Baucus is the chairman of the Senate Finance Committee.

According to the proposal, it would be obligatory for employers to divulge the particulars of the cost of health benefits on their employees’ W-2 documents. In concurrence with the America’s Healthy Future Act, it is compulsory for organizations to reveal the worth of health insurance coverage it offers each employee as stated on the employee’s W-2 form. This would go into effect at the beginning of 2010. The bill states that it “has a negligible revenue impact over 10 years.”

The bill goes on to assert that if an employer has more than 50 employees and does not provide them with coverage, the employer will be required to reimburse the government for every employee who is full-time and receives a health care affordability tax credit in the projected health insurance exchange. Whether the employees are receiving a tax credit or not, the reimbursement must be equivalent to 100% of the average exchange financial assistance, up to a $400 ceiling.

As stated in the release, the President of the American Benefits Council, James A. Klein, announced that “the Senate Finance Committee proposal avoids many of the destabilizing provisions included in other legislative proposals, such as:

- The employer pay-or-play mandate
- Unlimited state law remedies for employers obtaining coverage within the insurance exchanges
- Federal waivers to states that enact single-payer systems and
- The public health insurance option”

ABC declared that they have various issues with some of the terms in the tender. These include:

- The costly excise tax
- Fees on health insurers and other stakeholders
- The tax on valuable prescription drug coverage for retirees.

Klein argues that “these costs are all likely to eventually be paid by employers and employees and would therefore make health care less affordable.”

More about the Baucus bill

The bill conditions that if an employer offers employer-provided health insurance coverage to an employee, that employee is not eligible for a health care affordability tax credit for health insurance acquired through a state exchange. However, an employee can be eligible for a tax credit if they are offered coverage that does not have actuarial value of at minimum 65%, or who is offered unaffordable coverage by their company. Unaffordable coverage is coverage that is 13% of the employee’s wages.

According to the forecast of the proposition, the amount of contribution to health Flexible Spending Accounts (FSA) would be restricted to $2,000 a year starting from 2013 onwards.

Effective 2011, if employers provide prescription drug plans for eligible Medicare Part D retirees, the bill would eradicate the deduction for the subsidy for those employers.

With the bill, the definition of qualified medical expenses would become more conventional and by the rules. It would regulate the meaning of qualified medical expenses for health savings accounts, health Flexible Spending Accounts and health reimbursement arrangements. The bill would standardize the definition “to the definition used for the itemized deduction.” However, sums paid for medicine that can be bought over-the-counter with a prescription would still be considered as medical expenses and is an exception to the rule.


Resources:

http://ebn.benefitnews.com/news/bauccus-health-bill-aims-to-reform-employers-w-2-reporting-2681885-1.html

http://www.nytimes.com/2009/09/23/health/policy/23health.html?hpw

http://www.nytimes.com/2009/09/23/health/policy/23health.html?hpw

http://www.businessweek.com/bwdaily/dnflash/content/sep2009/db20090916_649567.htm