Tip Tuesday! Obama admits fault in health reform rollout, tries to let employers keep plans

By Christian Schappel

Small employers disappointed that their current health plans will get canned in 2014 due to Obamacare could – added emphasis on could – see those plans get a second life.

In a sobering news conference at the White House, President Obama took the blame for the botched rollout of his signature law and his inability to make good on a promise to allow Americans and small employers to keep their current health plans if they liked them.

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Obama to reform retirement savings next? 4 things you need to know

By Christian Schappel

 

Pretty much no matter what happens in President Obama’s final term, his presidency is likely to be defined by his healthcare reform law. But in what appears – at least in large part – to be an attempt to raise money for the federal government, he has set his sights on a new target: Retirement savings.

 

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Obama’s new jobs plan: Will it reduce unemployment?

March 20, 2012 by Christian Schappel

President Obama has unveiled his latest jobs proposal. Included in it are these seven things he hopes to provide for the unemployed.

1. Universal Displaced Worker Program. The president’s new budget proposal included plans for a program designed to provide displaced workers (those who lost their job when their employers closed or eliminated their positions, or didn’t have enough business to keep them employed) with skills, counseling and job search assistance services. The White House estimates up to a million workers a year would be eligible for help under the program.
2. Up to $4,000 in training awards. Under the Universal Displaced Worker Program, displaced workers would be eligible for training awards of up to $4,000 per year for up to two years.
3. Up to $300 in weekly stipends. For workers who are receiving job training, the program would provide weekly stipends for child care, transportation and other expenses worth between $150 and $300 for low-income workers. They’d be available for up to 78 weeks and could be received in addition to 26 weeks of unemployment insurance benefits.

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5 hidden mandates in new payroll tax cut bill

February 21, 2012 by Christian Schappel

By now you’ve probably heard that Congress passed a bill that’ll extend the Bush-era 2% payroll tax cut. Well, prolonging the tax cut isn’t all it’s going to do.

The bill, dubbed the Middle Class Tax Relief and Job Creation Act of 2012, also contains five other provisions that haven’t received nearly as much hype.

Here’s a rundown of else the bill will do: 

• Expand work sharing program. The bill will allow workers who’ve had their hours reduced to receive unemployment benefits equal to half of their reduction in pay. Unemployment insurance funds will be used to pay for this benefit. Proponents of this provision say the current unemployment system tends to encourage layoffs because unemployed workers can collect benefits worth half of the former wages. So this provision is expected to keep more people on the job.

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Obama pulls plug on part of health overhaul law

By RICARDO ALONSO-ZALDIVAR Associated Press

WASHINGTON (AP) -- The White House appeared to waffle Monday on the fate of a financially troubled long-term care program in President Barack Obama's health overhaul law, as supporters and foes heaped criticism on the administration.

At stake is the CLASS Act, a major new program intended to provide affordable long-term care insurance. Last Friday, Health and Human Services Secretary Kathleen Sebelius said the administration would not proceed with the plan because she has been unable to find a way to make the program financially solvent.

On Monday, the nonpartisan Congressional Budget Office issued a ruling that cleared the way for repealing the CLASS Act, but the administration rejected that step - and created considerable confusion. Backers and opponents said the White House is trying to have it both ways.

"I feel like somebody just called me about how to do really good pet care after they shot my dog," said Larry Minnix, president of LeadingAge, a trade group representing non-profit nursing homes, which are strong supporters of CLASS.

Paying for long-term care for a frail, elderly family member is a major financial dilemma for America's middle class. Medicare only covers short-term nursing home stays, for patients in rehab. And to become eligible for Medicaid, people have to spend most of their assets, akin to impoverishing themselves. The Community Living Assistance Services and Supports program was supposed to help provide an answer.

A long-standing priority of the late Sen. Edward M. Kennedy, it was supposed to function as a self-sustaining voluntary insurance plan, open to working adults regardless of age or health.

Workers would pay an affordable monthly premium during their careers and could collect a modest daily cash benefit of at least $50 if they became disabled later in life. The money could go for services at home or to help with nursing home bills.

But a central design flaw dogged CLASS. Unless large numbers of healthy people willingly sign up during their working years, soaring premiums driven by the needs of disabled beneficiaries would destabilize it, eventually requiring a taxpayer bailout.

After months insisting that could be fixed, Sebelius finally acknowledged Friday she didn't see how.

"Despite our best analytical efforts, I do not see a viable path forward for CLASS implementation at this time," she said in a letter to congressional leaders.

Officials said they discovered they could not make CLASS both affordable and financially solvent while keeping it a voluntary program open to virtually all workers, as the law required. The law mandated that the administration certify CLASS would remain financially solvent for 75 years before putting it into place.

As long as CLASS remained a possibility - even on paper - Republicans pushing its repeal would have had to come up with $86 billion in savings attributed to the program in its first 10 years, when income from premiums would more than cover benefit costs.

But the budget office said Monday that since the administration is not going ahead with CLASS, a repeal bill doesn't need offsetting savings. Instead, the CBO will raise its estimate of the deficit.

That ruling removed a major obstacle for repeal, and Republicans vowed to press ahead. The administration balked.

"We do not support repeal," White House spokesman Nick Papas said Monday. "Repealing the CLASS Act isn't necessary or productive. What we should be doing is working together to address the long-term care challenges we face in this country."

He declined to answer if the president would veto a repeal bill.

Republicans said at a time of record deficits, the administration is now in a position of saying it wants to keep alive a program it acknowledges would probably go bust.

"It defies logic for the White House to admit this part of their health spending bill would put an unsustainable burden on taxpayers, yet demand it stay on the books," said Senate Republican Leader Mitch McConnell of Kentucky.

Adding to the uncertainty, a top technical expert who worked on CLASS financing for the administration appeared to contradict Sebelius' conclusions. Robert Yee, an actuary who specializes in long-range financial planning, said Monday that he had found a possible path forward. Yee's ideas would involve marketing the plan first to groups of primarily healthy people, and also possibly requiring those in poor health to wait longer before they could receive benefits.

It was unclear whether either of those approaches would be acceptable to the coalition of CLASS supporters - or Sebelius and the administration.

Supporters of the program say the administration will pay a political price if it tosses out the long-term care plan. AARP, the seniors lobby, has called the decision by Sebelius premature

"If they said they want to hibernate it for a couple of years, that would be clearer than what they are saying now," said Minnix.

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Controversial health reform study details released

The Obama administration did not like the picture McKinsey & Co.’s latest health reform study painted of life after the new law. But McKinsey is not backing down from its findings.

The controversial study found that 30% of all employers will “definitely” or “probably” stop offering their workers health insurance once the bulk of the healthcare reform law’s mandates take effect in 2014.

That figure jumps to 50% among employers with a “high awareness” of the reform law’s requirements, the study found.

Those findings did not sit well with the White House and other Democrats who pressured McKinsey to release its methodology.

Recently, McKinsey obliged by releasing the details of the survey on its site, along with a statement, saying: “We stand by the integrity and methodology of the survey.”

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Tip Tuesday: President Signs Repeal of Expanded 1099 Requirements

From the Journal of Accountancy: 

On Thursday, President Barack Obama signed into law the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 (HR 4; 1099 Act), which repeals both the expanded Form 1099 information reporting requirements mandated by last year’s health care legislation and also the 1099 reporting requirements imposed on taxpayers who receive rental income enacted as part of last year’s Small Business Jobs Act (PL 111-240). The Senate approved the bill on April 5, and the House voted in favor of it on March 3.

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