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Life Health > Health Insurance > Health Insurance

Budget deal: How will it affect health agents?

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Congressional leaders wrestled a temporary government funding measure — H.R. 83 —  through the Senate Saturday with a 56-40 vote.

Even though only 56 senators voted for the bill, 77 senators, including many Republicans, voted to keep the U.S. government open by letting the bill come up for a vote on the Senate floor. If the measure had failed, the government would have lost official authorization to spend the money it needs to continue with normal operations.

President Obama has said he will sign the bill.

See also: Obama veto threat on tax-break bill deepens rift among Democrats

The PDF giving the official text of H.R. 83 is 1,603 pages long and includes cryptic provisions affecting many different aspects of federal government operations, ranging from agriculture building funding to FBI’s National Gang Intelligence Center. Congress has released a document that explains many of the provisions in the bill.

Hundreds of pages of provisions in the bill deal funding for the U.S. Department of Health and Human Services (HHS). Section 219, for example, calls for HHS to post more details about how it spends PPACA public health and prevention money on the Web.

Here’s a look at three provisions of interest to agents and brokers in the commercial health insurance market. 

Tough dog

1. HHS OIG may be more entertaining

HHS Office of Inspector General (HHS OIG) is a watchdog agency that’s supposed to keep tabs on the activities of HHS. The new funding deal gives it $71 million, according to a provision on page 874 of the PDF. That’s less than the $75 million request Obama put in his budget request for fiscal year 2015, which started Oct. 1, but it’s the same amount the agency received for fiscal year 2014.

Some in Congress questioned whether HHS OIG officials did enough to let them know how badly working on the Patient Protection and Affordable Care Act (PPACA) HealthCare.gov public exchange enrollment system was going before the system opened for business.

In the explanatory statement about H.R. 83, lawmakers say HHS OIG must give Congress a work plan describing how it will oversee PPACA implementation within 60 days after President Obama signs the bill.

HHS OIG is also supposed to explain how it will enforce rules that forbid recipients of HHS grants from using taxpayers’ money for lobbying, and it will require HHS OIG to work with inspector general agency that oversees the Internal Revenue Service (IRS) to assess how the IRS is doing at keeping taxpayers from abusing the PPACA premium subsidy tax credit program, according to the explanatory statement. The premium tax credit report is due by June 1, 2015.

Winner! (Guy in cubicle celebrating.)

2. The Blue Cross and Blue Shield representatives you meet may be happier

PPACA Section 9016 added a new tax law, Internal Revenue Code (IRC) Section 833(c), that requires Blue Cross and Blue Shield health plans and some other nonprofit plans to spend at least 85 percent of their premiums on health care to continue to qualify for IRC Section 833 tax treatment.

Insurers that qualify for IRC Section 833 tax treatment can deduct 25 of their claims and 100 percent of their unearned premium reserves from their taxable income. 

PPACA also required minimum medical loss ratio (MLR) provisions that require health insurers to spend 80 percent of individual and small-group revenue and 85 percent of large-group revenue on health care and quality improvement activities or else provide rebates.

Section 833(c) did not let nonprofit plans count health care improvement activities in efforts to meet the minimum PPACA nonprofit plan spending level.

The new funding measure will now let the Blues plans and other nonprofit plans put quality improvement efforts in their spending total. The provision is on page 1,602 of the PDF.

Worker in an office building

3. Serving expat plans may be easier.

The new bill includes an entire major section, Division M, that describes how HHS and the IRS are supposed to apply PPACA to expatriate plans, or plans that cover people outside the United States.

The IRS will treat an expatriate health plan that meets the requirements of the provision as an eligible employer-sponsored plan under IRC provisions that incorporates the definition of “minimum essential coverage” (MEC) under IRC Section 5000(f).

For purposes of PPACA Section 9010, an enrollee in an expat plan will not be considered a U.S. health risk, but the plan will still have to pay a fee for each enrollee in an expat plan.

See also: House passes bill loosening PPACA for expats

The expat section starts on page, 1,586 of the PDF.


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