And The Survey Says “Nearly Two-Thirds Of Employers Expect Health Benefit Costs To Rise Under Obamacare”

According to the consulting firm Mercer of 1,203 employers surveyed, sixty-one percent say they will have to pay more for health benefits when key provisions of the Affordable Care Act take effect in 2014 and one in five expect employee health benefit costs to rise by at least 5 percent.

Health insurance reform will most likely cost the most for companies that pay their employees less and have a large part-time workforce because the Affordable Care Act requires large employers to provide health insurance to all employees working at least 30 hours per week or else face penalties. About one in four employers, and one in two employers in retail and hospitality, said in the Mercer survey that they will have to take action to avoid penalties.

Only 6 percent of employers, including 9 percent of retail and hospitality companies, said they will likely drop their health benefit plans because of the Affordable Care Act.

The study comes after Papa John’s Pizza founder and CEO John Schnatter said earlier this month that he plans to raise the price of each pizza by $0.11 to $0.14 to offset new costs under Obamacare. The National Restaurant Association has previously stated that health insurance reform might hurt restaurants’ slim profit margins, since it requires employers with more than 50 employees to provide affordable health insurance.

The Mercer study did not indicate whether they, like Schnatter, plan to pass on the higher cost of employee health care to consumers.

How The IRS Will Police Us on Healthcare

In 2 and a ½ years, most taxpayers will have to start providing proof on their tax returns that they have health insurance, renewing questions about whether the agency is capable of policing the health care decisions of millions of people in the United States while also collecting the taxes needed to run the federal government.

Under the law, the IRS will provide tax breaks to help pay for insurance and impose penalties on those who don’t buy coverage as well as on some businesses that don’t offer insurance to their employees.

The changes will require new regulations, forms and publications, new computer programs and an outreach program to explain it all to taxpayers and tax professionals. Businesses that don’t claim an exemption will have to prove they offer health insurance to employees.

The health care law “includes the largest set of tax law changes in more than 20 years,” according to the Treasury inspector general who oversees the IRS. The agency will have to hire thousands of new workers to manage it, requiring significant budget increases.

“Knowing the complexity of the health law, there’s no question that the IRS is going to struggle with this,” said Rep. Charles Boustany Jr., R-La., chairman of the House Ways and Means oversight subcommittee. “The IRS wants more resources. Well, we need to start digging down into what are they doing with the resources and personnel.”

Treasury spokeswoman Sabrina Siddiqui said, “The overwhelming majority of funds used by the agency to implement the Affordable Care Act go to administer the premium tax credits, which will be a tax cut averaging about $4,000 for more than 20 million middle-class people and families.”

The Supreme Court, in its 5-4 ruling, upheld the mandate that most Americans get health insurance. Those who don’t get qualified health insurance will be required to pay a penalty, or tax, starting for the 2014 tax year, unless they are exempt because of low income, religious beliefs, or are members of Native American tribes.

The penalty will be fully phased in by 2016, when it will be $695 for each uninsured adult or 2.5 percent of family income, whichever is greater, up to $12,500. The nonpartisan Congressional Budget Office estimates that 4 million people will pay the penalty that year.

The law limits the ability of the IRS to collect the penalties. There are no civil or criminal penalties for refusing to pay it and the IRS cannot seize bank accounts or dock wages nor does interest accumulate for unpaid penalties.

The law does allow the IRS to withhold tax refunds to collect the penalty.

The IRS says it is well on its way to gearing up for the new law but has offered little information about its long-term budget and staffing needs, generating concern from government watchdogs.

The IRS is expected to spend $881 million on the law from 2010 through 2013, hiring more than 2,700 new workers and upgrading its computer systems, but the agency has not made public information about its spending plans in the following years, when the bulk of the health care law takes effect.

The lack of information makes it impossible to determine whether the IRS will have adequate workers to enforce the health care law, the Treasury inspector general for tax administration said in a report three weeks ago. The report, however, concluded that “appropriate plans had been developed to implement tax-related provisions” of the law.

In 2010, House Ways and Means Committee Republicans issued a report saying the IRS may need as many as 16,500 additional auditors, agents and other employees “to investigate and collect billions in new taxes from Americans.”

That assessment has been widely cited by opponents of the law. The IRS disputes the jobs number but hasn’t offered another one.

“That is a made-up number with no basis in fact,” IRS spokesman Dean Patterson said in an email. “The 2012 budget calls for about 1,200 employees for the IRS to implement the (Affordable Care Act), and the vast majority of those employees are needed to build technology infrastructure to support payments like the new tax credits for individuals and small businesses.”

Republicans on the House committee have accused the IRS of obscuring its cost of putting in place the health care law by absorbing it into in other parts of the agency’s budget. They cite a June report by the Government Accountability Office that said the IRS has not always accurately identified spending related to the new health care law.

“The agency’s repeated lack of transparency to Congress and its failure to provide accountability to the American taxpayers raises fundamental concerns about implementation authorities vested to the IRS,” the top four Republicans on the Ways and Means Committee wrote in a June 27 letter to the IRS commissioner.

Federal Government’s Ability to Provide Health Insurance Subsidies Being Challenged

Starting in 2014, the Affordable Care Act requires most Americans have health insurance and offers subsidies to help people pay for insurance bought through markets known as insurance exchanges.

Critics say the law only provides subsidies for people who obtain their coverage through state-run exchanges but the White House says the law can be read to allow subsidies for people who get coverage in federal exchanges as well.

The law says that “each state shall” set up an exchange but officials in one third to half of the states have either been slow to or flat out refused to set them up. Washington may have to set up federally run exchanges to ensure people are covered.

The Congressional Budget Office predicts that 23 million uninsured people will gain coverage through exchanges and that all but five million of them will qualify for subsidies, averaging more than $6,000 a year per person. Subsidies, in the form of tax credits, will be available to people with incomes from the poverty level up to four times that amount ($23,050 to $92,200 for a family of four).

Some supporters of the law say Congress may have made a mistake in drafting this section. But, they add, the intent of Congress is clear: subsidies should be available in federal as well as state exchanges.

The Obama administration issued a rule that allows tax credits for insurance bought in either a state or a federal exchange.

Representative Phil Roe, (R) Tennessee, said the rule on premium subsidies “contradicts the explicit statutory language” of the Patient Protection and Affordable Care Act. Roe and another Tennessee Republican, Scott DesJarlais, have introduced a bill to nullify the rule, issued by the Internal Revenue Service.

Douglas H. Shulman, the I.R.S. commissioner said “The statute includes language that indicates that individuals are eligible for tax credits whether they are enrolled through a state-based exchange or a federally facilitated exchange.”

However, Senator Orrin G. Hatch, (R) Utah, of the Senate Finance Committee, said the Obama administration was usurping the role of Congress and rewriting the law to provide tax credits through federal exchanges.

James F. Blumstein, a professor of constitutional and health law at Vanderbilt University, said the dispute over subsidies involved a serious legal issue.

“The language of the statute is explicit,” Mr. Blumstein said. “Subsidies accrue to people who obtain coverage through state-run exchanges. The I.R.S. tries to get around that by providing subsidies for all insurance exchanges. That interpretation will almost certainly be challenged by someone.”

The most likely challenger, Mr. Blumstein said, is an employer penalized because one or more of its employees receive subsidies through a federal exchange. Employers may be subject to financial penalties if they offer no coverage or inadequate coverage and at least one of their full-time employees receives subsidies.

Michael F. Cannon, director of health policy studies at the libertarian Cato Institute, said the link between subsidies and penalties was a crucial part of the law.

“Those tax credits trigger the penalties against employers,” Mr. Cannon said. If workers cannot receive subsidies in states with a federal exchange, their employers cannot be penalized, he said. That, in turn, would hobble federal efforts to get employers to offer coverage in those states, Mr. Cannon said.

Prof. Timothy S. Jost, an expert on health law at Washington and Lee University, said Congress had made “a drafting error” that should be obvious to anyone who understands the new health care law.

“There is no coherent policy reason why Congress would have refused premium tax credits to the citizens of states that end up with a federal exchange,” said Mr. Jost, who supports the law.

Florida Gov. Rick Scott Says He Won’t Implement Obamacare

Florida Gov. Rick Scott says that his state will not implement the federal health care law because it’s bad policy and cost too much.

The governor told Fox News he thinks the law should be repealed, hopefully by Mitt Romney in November. But in the case that President Obama wins a second term he said Florida will not be setting up a health-insurance exchange nor will they expand Medicaid.

“We’re not going to implement Obamacare in Florida,” Scott told Fox News anchor Greta Van Susteren on Friday night. “We’re not going to expand Medicaid because we’re going to do the right thing. We’re not going to do the exchange.”

State Rep. Mark Pafford, the ranking Democrat on the Florida House committee that handles health care funding, said he was not surprised.

“This is a guy who was in the private sector. He created an organization to fight the Affordable Care Act,” said Pafford, of West Palm Beach. “He then was so upset that he became governor using his own money. So it wouldn’t make sense that he would do anything else.”

Under the Affordable Care Act law, states must implement a health insurance exchange by 2014, a Web-based marketplace where people can shop for insurance, or defer to a federal program. States need to submit plans to the federal government that demonstrate their readiness to launch health exchanges by Nov. 16. States also must decide whether to move forward with an expansion of Medicaid to reduce the number of uninsured residents.

In Florida about 3.8 million people, or 21 percent, are uninsured.

The Supreme Court ruling made it clear that states can not be financially penalized for non-compliance. The federal government has promised to cover nearly all of the costs of the Medicaid expansion in the early years, but Scott said Medicaid is already too expensive and the expansion would put further strain on the state budget.

“We care about having a health care safety net for the vulnerable Floridians,” Scott said on Fox. “But this is an expansion that just doesn’t make any sense.”

Many of the most popular aspects of the Affordable Care Act are already in effect and do not require state involvement. That includes provisions like prescription drug discounts for seniors, allowing young adults to remain on parents’ insurance plans and free preventative care.

Scott said other Republican governors agreed their focus should be fighting the law and supporting Romney, including Rick Perry of Texas, Bobby Jindal of Louisiana and Scott Walker of Wisconsin.

“Here in Louisiana, look, we refused to set up the exchange. We’re not going to start implementing Obamacare,” Jindal told POLITICO. “We have not applied for the grants, we have not accepted many of these dollars, we are not implementing the exchanges, we don’t think it makes any sense to implement Obamacare in Louisiana.”

Scott said the governors arrived at the same conclusion that expanding Medicaid and creating exchanges are not good for taxpayers.

“We care about the citizens of our state,” he said. “We know this will be bad for our health care. We want jobs in our state. This is going to put American businesses at an unbelievable disadvantage as compared to businesses around the world.”

Scott cited the law’s requirement for businesses to offer insurance to employees. He told Van Susteren a story about a Florida business owner who said he may have to shut his doors.

“They walked up to me and they said, ‘Governor, is this really going to become the law? Because if it does, we’re out of business,’ ” Scott said. “ ‘We have 20 employees; we know we won’t be able to buy any health care for anybody.’ ”

The law actually grants companies with fewer than 50 employees an exemption from any requirement to buy insurance.

One of Scott’s biggest concerns is the cost of adding an estimated 1 million people to the Medicaid rolls.

“We can’t pay for that; there is no way Floridians can pay for that,” he said.

Democrat Rep. Pafford believes that Republican lawmakers should be embracing provisions that expand health care access, he said, and new revenue streams like a tax on internet commerce could help pay for it.

“We can afford it,” he said. “There are plenty of ways to do that. They just don’t want to afford it.”

The Legislature sets the budget, so it will ultimately decide whether or not to allocate money to implement provisions of the health care law.

Incoming Senate President Don Gaetz said he and incoming House Speaker Will Weatherford will work with the governor’s office in reaching a final decision. But for now, they are waiting on staff to digest what the court ruling means and its impact, Gaetz said.

“It’s not a matter of not having made up my mind yet, it’s a matter that this 110-page opinion, which is nearly as complex as the law itself, is not 48 hours old yet,” said Gaetz, R-Niceville. “I believe in ‘ready, aim, fire,’ not ‘ready, fire, aim.’ ”

Weatherford, R-Wesley Chapel, said there isn’t an immediate need to move forward on implementing the law. There is no harm in waiting a few months to see if the outcome of the November election changes the political climate, he said.

“There is an opportunity to bring new leadership to the United States of America,” he said, “and if that happens it’s going to change everything.”

Supreme Court Upholds Obamacare

In a clear cut victory for President Obama, the Supreme Court upheld his signature legislative achievement, the 2010 Affordable Care Act this Thursday.

Chief Justice Roberts wrote the majority opinion, who held that the law was a valid exercise of Congress’s power to tax. Congress, he said, is “increasing taxes” on those who choose to go uninsured.

The law requires non-exempted individuals to maintain a minimum level of health insurance or pay a tax penalty. Why certain individuals are exempt while others are not remains an issue of contention for many.

The essence of Roberts’s ruling was:

•       “The Affordable Care Act is constitutional in part and unconstitutional in part,”.

•       “The individual mandate cannot be upheld as an exercise of Congress’s power under the Commerce Clause. That Clause authorizes Congress to regulate interstate commerce, not to order individuals to engage in it.”

•       But “it is reasonable to construe what Congress has done as increasing taxes on those who have a certain amount of income, but (who) choose to go without health insurance. Such legislation is within Congress’s power to tax.”

The law, Roberts wrote, “makes going without insurance just another thing the Government taxes, like buying gasoline or earning income and if the mandate is in effect just a tax hike on certain taxpayers who do not have health insurance, it may be within Congress’s constitutional power to tax.”

He said “The question is not whether that is the most natural interpretation of the mandate, but only whether it is a ‘fairly possible’ one and that the Supreme Court precedent is that “every reasonable construction” of a law passed by Congress “must be resorted to, in order to save a statute from unconstitutionality.”

In 2005, then Senator Obama voted against confirming Roberts as chief justice, saying that Roberts lacked empathy for underdogs and “he has far more often used his formidable skills on behalf of the strong in opposition to the weak.”

Vice President Biden also voted against Roberts when he was a senator.

The four justices joining Roberts in upholding the law were Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan.

The dissenting justices were Justices Antonin Scalia, Anthony Kennedy, Clarence Thomas and Samuel Alito.

Individuals who choose to or can not afford health insurance, and are not eligible for subsidies, will be penalized by the government increasingly year after year starting at $95 in 2014, rising to $325 in 2015, and up to $695 in 2016. After 2016, that $695 amount is indexed to the consumer price index.

Congress specifically did not allow the use of liens and seizures of property as methods of enforcing the penalty nor is non-compliance with the mandate subject to criminal or civil penalties under the Tax Code. Interest does not accrue for failure to pay the penalty in a timely manner, according to the congressional Joint Committee on Taxation.

The court said that the Obama administration cannot coerce states to go along with the Medicaid insurance program for low-income people.

The financial pressure which the federal government puts on the states in the expansion of Medicaid “is a gun to the head,” Roberts wrote.

“A State that opts out of the Affordable Care Act’s expansion in health care coverage thus stands to lose not merely ‘a relatively small percentage’ of its existing Medicaid funding, but all of it,” Roberts said.

Congress cannot “penalize States that choose not to participate in that new program by taking away their existing Medicaid funding,” Roberts said.

The Medicaid provision is projected to add nearly 30 million more people to the insurance program for low-income Americans — but the court’s decision left states free to opt out of the expansion if they choose.

Vermont House passes single payer healthcare bill

Back in February President Obama told his critics to basically put up or shut up when it comes to the healthcare issues facing the country. Opponents of the flawed Healthcare reform bill that the president signed into law have been pushing to have it repealed. Two months ago the president told governors all the across the country “If your state can create a plan that covers as many people as affordably and comprehensively as the Affordable Care Act does, without increasing the deficit, you can implement that plan, and we’ll work with you to do it.”

It looks like Vermont will be the first state to take the president up on that challenge. The Vermont House has passed a bill that will give it’s residents access to a single-payer healthcare system by 2015. Gov. Peter Shumlin, who ran with single-payer health care being a major part of his campaign hailed the legislation saying it would make Vermont “the first state in the country to make the first substantive step to deliver a health care system where health care will be a right and not a privilege, where health care will follow the individual, not be a requirement of the employer, and where we’ll have an affordable system that contains costs.”

House minority Republicans criticized the bill which will set up a five-member board to draft a benefit package called Green Mountain Care, but doesn’t actually require the governor to figure out how to pay for it until 2013. The initial amount to be set aside for funding the system is $1.2 million. House Minority Leader Don Turner, R-Milton said “Creating a health care system based on theory and campaign promises is not good policy,”. Rep. Thomas Burditt, R-West Rutland, said that the government needs to reduce the role it plays in the healthcare system, not increase it.

The Vermont Senate is expected to also pass the bill but Sen. John Campbell, said members might look to make some changes.