Health Care Reform Rundown

This week in health care news, new initiatives are originating from the Patient Protection and Affordable Care Act (PPACA), as well as new initiatives included in the recent budget deal for the continuing resolution.

PPACA Initiatives
In terms of initiatives stemming from PPACA impacting small businesses, the Internal Revenue Service (IRS) recently released guidance (Notice 2011-28 for employers on reporting the costs of health care on employees’ Form W-2. Last year, before the requirement was scheduled to be implemented according to PPACA, IRS made the requirement voluntary for 2011, but maintained its mandatory requirement for 2012 (due January 31, 2013).

The notice includes guidance on what coverage to include and how to determine the cost of the coverage, as well as on how to report it. For smaller businesses – those filing fewer than 250 W-2 forms – the IRS makes the requirement optional at least for 2012 and continues the optional treatment for even smaller businesses until further guidance is issued.

The Department of Health and Human Services (HHS) also has been busy promulgating new aspects of PPACA, including new initiatives on patient quality. NSBA has advocated for improving health care quality as a focal point in reducing unnecessary health expenditures, which often are passed along to small businesses and their employees in the form of higher premiums.

The administration has unveiled the National Patient Safety Initiative that aims to reduce hospital-acquired conditions and preventable readmissions by changing the way Medicare pays for care. Such readmissions are estimated to cost the healthcare system $50 billion a year.

Similarly, HHS’s Centers for Medicare and Medicaid Services (CMS) recently added new information to theirHospital Compare Websiteto allow individuals to compare infection rates at over 4,700 hospitals. NSBA has long-supported efforts to bring greater transparency into the health care system with the goal of further empowering consumers to make well-informed and pragmatic decisions about the health care they pursue.

Budget Discussions on Health Care
Meanwhile, on Capitol Hill, members of Congress continue to struggle with PPACA, including provisions with direct impact on employers. Most recently, the continuing resolution (CR) budget deal struck to fund the government through the end of this fiscal year included a provision that eliminates PPACA’s free choice voucher program and reduces funding for the Consumer Operated and Oriented Plan (Co-Op) from $6 billion to $2.2 billion.

The Co-Op program provides resources for non-profit health insurers and was a compromise to the public health insurance option during health care reform deliberations. The free choice voucher would have allowed low-income workers to opt out of their employer-sponsored plans and obtain coverage through the state-based health insurance exchanges.

The CR also includes a provision directing the Government Accountability Office to do a wide-ranging review of PPACA’s implementation within 90 days, including an analysis on the projected impact PPACA will have on insurance premiums. The House is expected to vote Thursday on the CR.

Senate Republicans recently requested similar analysis from the CMS Office of the Actuary, which examined the impact of PPACA on employer-provided health coverage. In short, the actuarial analysis found that over a five-year period, roughly 20 percent of small employers and five percent of large employers would terminate coverage due to its availability through health insurance exchanges. Click here to read more.

NSBA will continue to monitor health care reform initiatives in Congress and elsewhere to advocate and ensure progress is made to benefit small-business owners, their employees, and their families. Stay tuned to NSBA’s Web site and  NSBA’s Health Reform Today and Tomorrow Web site for more news and information as it is made available.

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