Friday, September 6, 2013

Liberty University Asks Supreme Court to Review Freedom of Religion Challenge to Obamacare

I came across this news article after posting today's blog.  It's big enough news to justify its own post.  It's about HHS's requirement (under the authority of Obamacare) to mandate every policy provide coverage for contraceptives, including abortion inducing drugs, over the religious objections of employers.  Basically, religious employers like the Catholic Church and Liberty University argue that it violates their freedom of religion to force them to pay for drugs that they find morally objectionable, whether they are forced to pay directly through a self-insured plan or indirectly through some other insurance plan.

Liberty University has filed a petition for certiorari asking the Supreme Court to reverse the lower court's ruling against it.  WND has a detailed discussion of the case and issues here.

Before getting to the specifics, let me lay out some background.  The Supreme Court has almost absolute authority to pick and choose which cases it wants to hear.  A party who loses a case in a lower court must file "a petition for writ of certiorari" asking the Supreme Court to accept the case (called "granting cert" for short).

Last I checked, in only about 1 in 100 cases does the Supreme Court grant cert but Wikipedia says they accept about 5%.  They tend to accept cases where (1) there are inconsistent decisions in the lower courts; (2) the issue is really important and clearly raised by the case; and (3) they suspect the lower court likely came to the wrong decision.

So in Liberty University v. Lew, Liberty is trying to convince the Court those three things are true.  Given the magnitude of the case, they probably have a better chance than usual of getting cert granted.  But it's still a long shot.

Liberty raises several issues, all of which are of great importance.  The first two argue that it's not constitutional to force private employers to purchase expensive insurance under the threat of heavy fines.  In other words, it is not really regulating commerce or validly imposing a tax to order companies to do things under the threat of huge fines.  Fines for failing to provide compliant insurance can be as high as $100 per day per employee.  If an employer has 1000 employees, that's $100,000 per day or $3,000,000 per month.

The government has the option of raising the penalty to $15,000/day per employee in egregious cases.  For our hypothetical 1000 employee company, that would be $15,000,000 per day or $450,000,000 per month.  Liberty may have a point that the government is coercing rather than regulating or taxing.

The next three issues raise the freedom of religion issue.  Liberty basically says that the government is forcing them to go against their religious beliefs by paying for abortion inducing drugs (aka abortificants).  The government argues that it is up to the employee to decide whether it is right or wrong to use these products.  The employer has no right to impose its religious beliefs on the employees by withholding drugs many people believe are acceptable to use.

We'll have to keep an eye on this.  It may be several months before the Supremes decide whether to take the case.

Today's Obamacare--Federal Labor Standards Notice Due by October 1, 2013

Here is something important to add to your September "to do" list.  All employers subject to the Federal Labor Standards Act (FLSA) must provide notice to their employees of the opening of the Obamacare insurance exchanges by October 1, 2013.  The original date was supposed to be March 1, 2013, but as with so much under PPACA, the government delayed the date.

Check with your lawyers and accountants.  Here are some shortcuts to help them help you (and hopefully save you some money).

Help with the required notices is available.

In the Small Business Guide to Obamacare, we provide a handy timetable showing critical dates you need to be aware of.  So pick up a copy today.

Now, on to Today's Obamacare headlines.

Thursday, September 5, 2013

Some Things to Consider When Choosing a Healthcare Policy

Yesterday, I attended a seminar put on by the Health Care Law section of the State Bar of Michigan.  I met many competent, dedicated professionals who are working to implement the new health care law.  Some of the lawyers I met were in private practice, others worked in-house for hospitals, and some were in the finance end of the business.  They face many challenges but I feel they will be up for them.

I spoke with a few people about how they expect Obamcare/PPACA to affect business and access for the average person.  There were some common themes.

  • Many medical providers do not accept Medicaid.  Medicaid does not pay enough to make it worth it.  If you become newly eligible for Medicaid, don't expect to be able to go to any hospital or doctor you choose.
  • I received mixed messages on whether the exchange policies will suffer the stigma attached to Medicaid.  Some people said that their system might accept the exchange policies but others said they might not.  It will pay to check both the network information provided by insurance company as well as confirming with your own doctors whether they will accept a particular policy.
  • Don't assume that networks are the same for all policies from a given insurance company.  For example, if you have a Blue Cross policy now don't assume that it will have the same network associated with it next year.  If keeping a particular doctor or hospital is important to you, you will need to check with both the insurer and doctor to make sure the policy will work.

Most of the seminar was not on the impact of PPACA in particular, but it came up several times.  One resource that some will find useful is the white papers from Michigan State Bar on health care exchanges.  Providers are struggling to move their pricing models over to that called for by the new environment.  And if you really want to give yourself a headache, the tax issues for non-profit hospitals would be a good place to start.

Now, for Today's Obamacare headlines:

Right Wing Rants

Obamacare's taxes on labor will hurt employment.

More than 250 employers have cut hours due to Obamacare.

Chicago Tribune blasts Obamacare.

RNC rolls out website criticizing Obamacare.

Left Wing Cheerleading

Obamacare may help people who now don't know it will.

21 states ban abortion coverage.

Obamcare could be disaster for GOP.

Ted Cruz is addicted to Obamacare.

Ted Cruz lies about Obamacare.

Maryland hires Ravens to support Obaamcare rollout.

Hard News

Obamacare Q&A for New Jersey.

Bill Clinton calls on Republicans to help make Obamacare work.

New York Q&A regarding adult child remaining on parent's policy when offered insurance through work.

Interactive map shows expected increases in cost of individual plans.

Obamacare startup helps companies identify workers eligible for Medicaid.

For Industry Professionals

PPACA ad blitz begins.

Is PPACA like Medicare?

So there it is.  Please feel free to subscribe (that little box on the right) or email me questions or comments at  Thanks for reading.

Wednesday, September 4, 2013

Administration Considers Special Exemption for Unions

We've been following Obamacare's impact on unions.  It did not take very long for the administration to come up with a break for unions after the unions complained.  The government is exploring ways to make exchange subsidies available to union workers, especially those enrolled in multi-employer plans.

Before we get to that, the Michigan legislature approved the Medicaid expansion sending the bill on to Governor Snyder (who has promised to sign it).  One "reason" giving for approving the Medicaid expansion is that businesses won't have to pay the $2000 penalty/tax/shared responsibility payment for people who enroll Mediciad but would have to if they enrolled in the exchanges.

That's a red herring and it appears to me to be a misreading of how Obamacare works.

Both these stories raise an important point about the Obamacare scheme.  The basic idea behind Obamacare is that everyone needs to have health insurance.  Health insurance is key to access to the health system, the argument goes, and therefore everyone should have some form of coverage.

How do we get everyone covered?  First, most people get their coverage through an employer and that's assumed to continued.  Setting aside whether that is a good assumption, other people get coverage through government programs like Medicare or the Veteran's Administration.

What about the currently uninsured?  The Obamacare plan is essentially what some call a "three-legged stool."  (1) People with low incomes are expected to get coverage through expanded Medicaid programs, like the one Michigan is enacting.  (3) the Obamacare online exchanges will provide subsidized coverage for some people.  And lastly, (3) large employers (i.e. with 50 or more employees) will be forced to buy insurance for full-time employees, or else pay a penalty if employees get exchange policies.  If people don't get insurance, they will be fined, with some narrow exceptions.

Depending on income, some people will get subsidies if they buy a policy on the exchange.  You can calculate an estimate of the subsidy at the UC-Berkeley Labor Center.

Here's the catch.  A basic principle guiding Obamacare is that if a person can get coverage from an employer or the government, then that person is not eligible for a subsidy on the exchange.  In other words, if you get an affordable offer from your employer you should take it.  If you're eligible for veteran's coverage, you should take that.  That's true even if the offered insurance costs more than a subsidized Obamacare policy on the exchange.  It's also true if your eligible for Medicaid.

What the unions appear to want is an exception to this rule.  They want the subsidies for their private health plans, even though that violates the spirit and likely the letter of the law.  Private health insurance is already subsidized, as it receives tax-favored status.  Now the unions want to double-dip and get a second subsidy on top of that.  Moreover, it seems they could get a subsidy that non-union employees with private, employer-provided insurance won't get.

The Michigan $2000 penalty argument fails for a similar reason.  Some say that expanding Medicaid means businesses will lead to lower penalties on business.  Here's why that seems to be wrong.  If someone is eligible for Medicaid, that person is not eligible for subsidies on the exchange.  A Medicaid-eligible person could buy an exchange policy but under the law as written would not be eligible for a subsidy.  Even though the person has a low income, that person would have to pay the full price.

The penalty on large employers for failing to offer affordable insurance only applies if an employee buys exchange-based insurance AND gets a subsidy.  No subsidy-no penalty.  Perversely, this is true even in states without the Medicaid expansion.  So Michigan's expansion of Medicaid does not prevent penalties on business, it's just not a factor under the rules for determining when a penalty applies because a person eligible for Medicaid can't get a subsidy.

There's a lot of disinformation out there on both sides.  For the straight story, check out my book The Small Business Guide to Obamacare.  I may not like Obamacare, but I want you to get the straightest story possible.

Now for Today's Obamacare headlines.

Rightwing Rants

Obamacare threatens privacy.

Michigan Medicaid's expansion threatens long-term fiscal health.

Unions seek double subsidies for their health plans.

Growing number of Republicans calls for rejection of special break for Congress and staffs.

Obamacare may overturn ban on federal spending for abortions.

Leftwing Cheerleading

Obamacare will help small businesses cover employees.

Understanding the right's Obamacare obsession.

Straight News

Obamacare media blitz seeks to persuade young uninsureds to enroll.

Watch out for Obamacare scammers.

For Industry Insiders

Can Medicare Advantage survive PPACA?

Rand study paid for by HHS indicates employer policies will be cheaper but individual policies will cost more under PPACA.

Anti-fraud provisions save billions.

Employers must send exchange notice by October 1.

Unions seek right for members to get Obamacare subsidies.

Tuesday, September 3, 2013

Today's Obamacare--More On Unions

Yesterday (Labor Day), I asked why unions would support Obamacare?  It places high taxes on good health plans and will almost surely limit benefits going forward.  If you have a really good union health plan, it seems foolish to give it up.

Apparently, some union members are asking the exact same question.  40,000 longshoremen of the ILWU are leaving the AFL-CIO, citing Obamacare as the reason.  They don't like AFL-CIO's stand on immigration as well.

I have several links regarding this story below and I won't dwell on it.  But it does seem that waiting until the law was about to become effective to protest was not a good strategy.  Perhaps they should have done something sooner.

On to Today's Obamacare headlines:

Rightwing Rants
Company's reduce benefits in response to Obamacare.

Obamacare hinders recovery.

Sen. Reid says Obamacare is stepping stone to government single pay scheme.

ILWU dumps AFL-CIO over Obamacare.

Unions are unhappy with Obamacare.

ILWU leaves AFL-CIO over Obamacare.

Unions frustrated with Obamacare.

Unions feel duped by Obamacare.

Leftwing Cheerleading
Obamacare finds it Bull Connor.

Obamacare hurts fast food minimum wage increase efforts.

Hard News
Obamacare needs young people to buy insurance to succeed.

Tallying Obamacare's cost in Illinois.

TEA Party seeks referendum on Medicaid expansion in Arizona.

How college students fit into Obamacare scheme.

Million sign petition to defund Obamacare.

Sen. Heller of Nevada says Congress and its staff should have Obamacare plans.

Monday, September 2, 2013

Press and Media Information

If you are from the media, feel free to use the following images for your stories:

Further biographical information can be found at:

Today's Obamacare--Why Would Unions Support the Affordable Care Act?

Happy Labor Day.  It's just one month until the health care exchanges are scheduled to launch.  Most people come to blogs looking for answers, today I only offer a question.  Maybe you can help me out.

As I wrote the Small Business Guide to Obamacare, a question that kept popping into my head was why would any union support this law?  The health benefit plans that union and government workers enjoy here in Michigan go far beyond anything I would expect the government to be able to provide.  Low or non-existent co-pays, low out of pocket maximums, and generous coverages and treatments, what's not to like?  Why mess with a good thing?

The Affordable Care Act, at its core, is supposed to be about pressuring everyone to have roughly the same coverage.  If it weren't for the exemptions and delays, we would be on track to all have the same coverage.  Again, if you have great coverage why would you want "Medicaid for everyone."

The two biggest factors that could limit union benefit packages are:

  • The Cadillac tax, which imposes a hefty penalty on expensive healthcare policies.  If the limits are not raised, the most likely people to have to pay the Cadillac tax are union employers.  Those employers would presumably factor the tax into their overall compensation calculations, meaning employees would take a hit.
  • HHS can determine what policies cover.  If a procedure costs too much, the HHS secretary can limit coverage in many situations. 

The only thing I can think of is that if health insurance is granted as a right to everyone, then unions won't have to negotiate that point in future contracts.  They could direct their energy to other benefits and wages.  But they fought so long for so hard to get the policies they have, it seems crazy to me to give it up.

So if anyone has any ideas, we'd love to hear them.  Feel free to email or post a comment below.

Now to Today's Obamacare headlines:

Rightwing Rants

Sen. Cruz vows to continue Obamacare opposition.

Leftwing business owner becomes Obamacare opponent.

Obamacare good for business--the Obamacare consulting business.

Obamacare was sold on deceptive terms.

Aetna withdraws from another exchange, is that a trend?

Obamacare benefits are not free.

Republican lawmakers face litmus test on whether they accept Obamacare money.

Texas Republicans don't like Obamacare.

Obamacare will be the unaffordable care act.

Nebraska health insurance rates to spike.

Happy hour:  testing Obamacare.

Leftwing Cheerleading

Insurance rates will not spike as much as Georgia insurance commissioner expects.

Don't believe the polls, PPACA will be popular.

Obamacare is great for everybody, even business.

Hard News

One million New Jersey residents expected to enroll in Medicaid and exchanges.

States market Obamacare exchanges under other names.

Michigan begins enrollment efforts.

Hundreds rally in Wilmington to oppose Obamacare.

For Industry Insiders

Well, what do you know, there's nothing out there.  I guess the insurance pros get the weekend off.

Cheers, everyone, have a great weekend.