Obamacare Medical Device Tax Slipping Through IRS’s Fingers

A 2.3 percent excise tax on medical devices that took effect in January has failed to live up to expectations, and an audit blames the Internal Revenue Service (IRS) for botching its implementation.

A report by the Treasury Inspector General for Tax Administration (TIGTA) says the tax has so far brought in only $913.4 million out of a projected $1.2 billion for the first two quarters of 2014. J. Russell George, the inspector general, says the IRS needs to do a better job of identifying medical device manufacturers and then insuring that they pay the excise tax on all sales of medical devices.

The IRS blames this — and all its other woes — on insufficient funding from Congress, which cut the agency's budget from $12 billion in 2013 to $11.2 billion this year. Some in the House of Representatives counter that, while the IRS shouts underfunding, it still somehow is able to find $63 million to award in bonuses.

For complete information on the all provisions of health care reform, please get a copy of our Affordable Care Act Compliance Kit.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Watchdog Groups Claim Insurance Companies Still Discriminating Against the Sick

Several watchdog groups have written to Health and Human Services (HHS) Secretary Sylvia Mathews Burwell to protest that the health insurance industry is still discriminating against the sick in terms of harder access to care and onerous pricing for medicines, despite the antidiscrimination provision of the Affordable Care Act (ACA).

Among the 300 groups writing — all supporters of the ACA — were the AIDS Institute, the American Lung Association, Easter Seals, the Epilepsy Foundation, the Leukemia & Lymphoma Society, the National Alliance on Mental Illness, the National Kidney Foundation and United Cerebral Palsy. The groups' plea for help is being enjoined by some state insurance commissioners.

The biggest concern, along with the tighter selection of physicians and facilities on most plans, is the insurance industry's habit of placing certain medications on a "high-price tier," in order to shift obligations to the patient to cover the difference on what are deemed to be "expensive" diseases, which can be $2,000 or more on certain medications.

America's Health Insurance Plans, the industry's trade group, says consumers have choices of different plans, some of which offer bigger networks and bigger coverage but at a higher premium.

HHS has promised a reply to the groups' letter, but it has not arrived yet.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Prove-It-Or-Lose-It Notices Sent to Suspect Obamacare Policyholders

The Department of Health and Human Services (HHS) this week sent out 310,000 demands to Obamacare policyholders to verify their citizenship/immigration eligibility. The prove-it-or-lose-it notices followed failed previous attempts to obtain verification from the individuals.

The HHS set a deadline of Sept. 5, 2014. If no verification of eligibliity is supplied by that time, the policies will be suspended on Sept. 30.

"We want as many consumers as possible to remain enrolled in marketplace coverage, so we are giving these individuals a last chance to submit their documents before their coverage through the marketplace will end," said Centers for Medicare and Medicaid Services (CMS) Administrator Marilyn Tavenner in a statement.

In all, some 970,000 health insurance policies sold under the Affordable Care Act (ACA) had citizenship and immigration data issues. About half have been resolved, and 210,000 are still in progress. The rest have been issued notices demanding verification.

This is just the tip of the iceberg. Later, HHS will follow up on policyholders with income data problems who are currently being subsidized but whose eligibility has not yet been established.

To establish your ACA responsibilities, whether you run a small-, medium- or large-scale operation, please refer to our comprehensive Affordable Care Act Compliance Kit.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Obamacare Premiums to Rise Average of 7.5 Percent for 2015, Research Shows

A preliminary analysis by PricewaterhouseCoopers' Health Research Institute predicts that premiums on the Affordable Care Act (ACA) marketplaces will rise an average of 7.5 percent for 2015 policies when open enrollment commences Nov. 15.

State by state, a wide gap exists between highest and lowest, with Arkansas at top with a predicted 50 percent increase in premiums, and Arizona below the bottom with a 23 percent decrease in store for certain consumers.

The Health Research Institute is basing its prediction on rate filings by insurance companies in 29 states and the District of Columbia, which so far average 8.2 percent in rate hikes, but the entry of new insurance companies and other competitive factors should bring that average down a bit in looking forward. Earlier, Avalere Health estimated an 8 percent premium hikes based on filings in nine states.

Click here to VIEW STATE-BY-STATE RATE FILINGS.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Elon Musk’s SpaceX Sued Under WARN Act for No-Advance-Notice Layoffs

Laid-off employees at the Space Exploration Technologies Corp. (SpaceX) in Hawthorne, Calif., are taking the Elon Musk-owned company to court over some 200-400 layoffs conducted on or about July 21.

The vehicle for the lawsuit is the Worker Adjustment and Retraining Notification (WARN) Act, which mandates that companies with 100 or more employees within a 75-mile radius must give 60-days advance notice when conducting mass layoffs. A mass layoff is defined as 50-499 employees within a 30-day period if they make up at least 33 percent of the employer's active workforce. Otherwise, the standard is 500 employees.

According to President Gwynne Shotwell, SpaceX had 3,800 employees in October 2013, but the website now lists only 3,000 employees.

The law firm of Feldman Browne & Olivares filed the suit for former SpaceX technicians Bobby Lee and Bron Gatling and is now seeking class action status to cover the other laid-off employees.

To understand better how the WARN Act may or may not apply to your business, please get a copy of our HR Desk Reference.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Obamacare Fallout: Oracle Sues Oregon Over Web Accusations

Oracle Corp. has filed suit against the Oregon agency that operated the state's now-defunct Obamacare marketplace website, in the process accusing Gov. John Kitzhaber of trying to systematically "vilify the company in the media."

In a 21-page complaint filed with the U.S. District Court for Oregon, Oracle maintains the state continued to work with the company to fix problems with the Cover Oregon site while at the same time carrying out a campaign of "constant public slander."

Cover Oregon finally dropped Oracle as its web developer for the health care insurance site in March and the next month shut it down and turned over operations to the federal government with its HealthCare.gov site, the main national vehicle for selling policies under the Affordable Care Act (ACA), or Obamacare.

Gov.Kitzhaber urged the state attorney general back in May to sue Oracle, but before that happened, Oracle opened fire with its own legal action this past Friday.

Melissa Navas, a spokesperson for the governor, said the lawsuit was expected and would be vigorously challenged because of "Oracle's failure to deliver" on the development of CoverOregon.com, which cost $248 million to build — all with federal taxpayer dollars.

To understand the ACA better and learn how it applies to your business, no matter how large or small, please procure a copy of our ACA Compliance Kit.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Judge Rules College Athletes Own Rights to Their Names and Images

In a case brought to trial against the NCAA (National Collegiate Athletic Association) by former UCLA basketball star Ed O'Bannon, a federal judge has ruled that Division 1 football and basketball players, who were included in the lawsuit, own the rights to their names, images and likenesses.

Thus the NCAA and its constituent schools can no longer use their football and basketball players in promotions without paying them. U.S. District Judge Claudia Wilken, however, ruled that the athletes could not receive payment while in school because that would  “undermine the efforts of both the NCAA and its member schools to protect against the ‘commercial exploitation’ of student-athletes.” Payment will have to be withheld until they are no longer students, and students cannot pursue their own commercial endorsements while attending college.

In a 99-page ruling, Judge Wilken wrote:

After considering all of the testimony, documentary evidence, and arguments of counsel presented during and after trial, the court finds that the challenged NCAA rules unreasonably restrain trade in the market for certain educational and athletic opportunities offered by NCAA Division I schools.The procompetitive justifications that the NCAA offers do not justify this restraint and could be achieved through less-restrictive means. The court … will enter as a remedy a permanent injunction prohibiting certain overly restrictive restraints.

In a nod to the NCAA and its schools, the judge also ruled that they could cap yearly payments at $5,000 per athlete.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Most Uninsured Won’t Have to Pay Obamacare Penalty

In addition to the "outs" provided in the Affordable Care Act (ACA) itself, the Obama administration has engineered 14 ways uninsured Americans can avoid paying a penalty for not having health insurance, according to today's Wall Street Journal.

An analysis by the Congressional Budget Office (CBO) and Joint Committee on Taxation has discovered that about 90 percent of the nation's 30 million uninsured won't pay a penalty in 2016 when the assessment rises from 2014's 1 percent of income to 2.5 percent, according to the report. The result will be that only 4 million of the 30 million estimated uninsured will be subject to a tax penalty in 2016.

Earlier this year, the administration released a hardship form detailing 14 reasons for not having health insurance and thus being waived from the no-insurance penalty. The outs included having your previous policy canceled, suffering domestic violence, experiencing property damage from fire or flood, and the last category — "another hardship — please submit documentation if possible."

The Centers for Medicare and Medicaid Services (CMS) says 77,000 individuals and families had applied for exemptions as of April, but many exemption requests can only be accomplished on tax forms submitted in 2015.

The exemptions provided by the ACA include Native Americans, illegal immigrants and certain religious sects.

Observed Douglas Holtz-Eakin, former director of the CBO and president of the American Action Forum, a conservative think tank, of the exemptions' push: "If your pajamas don't fit well, you don't need health insurance, It basically waives the individual mandate."

To understand the ACA better and learn how it applies to your business, no matter how large or small, please procure a copy of our ACA Compliance Kit.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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OFCCP Issues NPRM to Require Contractors’ Detailed Pay Information

The Office of Federal Contract Compliance Programs (OFCCP) has released a Fact Sheet, FAQs and Notice of Proposed Rulemaking (NPRM) requiring federal contractors and subcontractors to submit an annual Equal Pay Report on employee compensation.

The NPRM would amend the regulations for Executive Order 11246, Equal Employment Opportunity, by adding a requirement that certain federal contractors and subcontractors supplement their Employer Information Report (EEO-1 Report) with summary information on compensation paid to employees, as contained in the Form W-2 Wage and Tax Statement (W-2) forms, by sex, race, ethnicity, and specified job categories, as well as other relevant data points such as hours worked, and the number of employees.

Covered employers would submit electronically three pieces of information related to employee compensation:

  • The total number of employees by EEO-1 job category by race, ethnicity and sex;
  • Total W-2 wages, defined as the total W-2 wages for all workers in the job category by race, ethnicity and sex;
  • Total hours worked, defined as the number of hours worked by all employees in the job category by race, ethnicity and sex.

Federal contractors and subcontractors can show compliance with mandatory posting and notice requirements for multiple federal rules by displaying our All-On-One Federal Contracts Poster.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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Minnesota Cafe Fights Back: Adds Minimum Wage Charge to Bills

Cafe-Oasis-minimum-wage-fee

Earlier, we learned that business owners in the SeaTac community of Washington had found innovative ways to combat the effects of a mandated new $15-an-hour minimum wage — charging for parking, ending free food, making employees pay for uniforms — and now a Minnesota restaurant has taken the battle to the customers.

The Oasis Cafe in Stillwater, Minn., has instituted a 35-charge for each bill to help cover the costs of the state's new $8-an-hour minimum wage effective Aug. 1.

Owner Craig Beemer says the 75-cent increase will cost him $10,000 a year. Other state restaurants, such as Blue Plate with its eight locations, are following suit.

To understand the nation's wage and hour laws, please get a copy of our new Restaurant Industry Wage and Hour Compliance Program.

NB: Waffle Fries? Hmmmm….


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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