By Bill Jenaway, Vice President, VFIS Education, Training and Consulting and President CFSI; Sean Carroll, Legislative Director CFSI; and Bill Webb, Executive Director CFSI
The recently enacted Patient Protection and Affordable Care Act (as amended by the Health Care and Education Reconciliation Act of 2010), has implemented a number of key changes that alters access to health care for individuals. The Act also has a number of impacts imposed to help pay for these changes in health care coverage. One of these is known as the “Cadillac Tax.” This provision imposes an annual 40 percent excise tax on plans with premiums exceeding $10,200 for individuals or $27,500 for a family (not including vision and dental benefits) starting in 2018.
The thresholds may be increased depending on actual medical inflation between 2010 and 2018 using a measure that looks to the Federal Employees Health Benefits (FEHB) program. The thresholds may also be increased for individuals in high-risk professions and pursuant to an age and gender adjustment. It is anticipated that the IRS will provide additional guidance regarding the thresholds and the adjustments to the threshold in its regulations.
The term Cadillac is used to describe the plan similar to that of the Cadillac automobile. The automobile has been known for its luxury, implying the Cadillac Health Care Plan is a luxury plan. Therefore, a Cadillac plan is any unusually expensive health insurance plan. The term gained popularity in the early 1990s when debates were occurring over health care plans during the Clinton Administration. This was followed by debate over possible excise taxes on Cadillac plans during the Obama Administration Health Care reform proposals. It should also be noted that bills proposed by Clinton and Obama did not use the term Cadillac.
The tax will apply to both fully insured and self-funded plans. For fully insured coverage that exceeds the applicable threshold, the issuer is responsible for paying the 40 percent excise tax. If it is self-funded coverage, the plan administrator (typically the employer) is responsible for paying the excise tax. The threshold is adjusted for individuals in high-risk professions, but only if a majority of employees covered by the plan are engaged in a high-risk occupation. This means a health care plan that covers only members of a fire department would be eligible for the increased threshold, but a plan that covers all municipal employees may not be eligible for increased threshold. Additional information about the thresholds and permissible adjustments will be addressed by the IRS in its regulations.
These high-value health plans are typical of the type of plans provided to high risk organizations such as fire and police agencies. So the first question is – Do you qualify? The second question is - Are you ready?
Taking care of emergency responder personnel is a responsibility of management and being safety/health conscious is a responsibility of both personnel and management. Thus, everyone in the organization plays a role in health care and in upcoming discussions of the Cadillac Tax and its impact. This issue will most likely be a discussion point during benefit discussions, contract negotiations, budgeting and strategic planning.
Even though the Cadillac Tax will not be effective until 2018, emergency service organizations may want to begin working with agents, brokers, consultants and insurers now to determine ways to manage the implications of the tax on benefit programs. This is particularly true if the organization has personnel engaged in future business planning activities, including collectively bargained plans where negotiations must take place before changes can be made to a plan. It is important for all those involved to have an understanding of the issues, the impacts on the responders and the organization, the options available and the decisions to make.
Read the entire VFIS fall newsletter here.
CREATED: MAY 1, 2014
While sending trained EMS personnel into a patient’s home to do basic preventative care may seem like a perfect fit, there are still many challenges that agencies need to overcome.
In the past few weeks, Ohio and Virginia have come out with statements about the issue, and other organizations are weighing in as well, Dr. Lori Moore-Merrell told a group attending a session during the Congressional Fire Service Institute's meetings . “Ohio law allows EMS providers to perform only emergency medical services. EMS providers should be aware that immunity from civil liability applies only if they are administering ‘emergency’ medical services,” she said. And in Virginia, EMS agencies interested in providing community paramedicine may be required to obtained licenses by the state’s health office.
Meanwhile, a nurses’ association said it feels they may need to supervise the medics, questioning their abilities, she said, adding that some agencies are getting very territorial. While the Affordable Care Act doesn’t mention EMS, Moore-Merrell added: “It sets up opportunities for EMS though.” The IAFF will vote on a resolution at its annual convention in July whether or not it’s something they want to do, she added. But, fire departments and EMS folks aren’t the only ones jumping to get in on the action, she said.
Some private EMS companies are dropping emergency responses so they can concentrate on community medicine. Also, at least two major drug stores have started to promote full healthcare. Under the ACA provision, hospitals and medical facilities understand they will face penalties if a patient is re-admitted to their facility for the same condition within 30 days of discharge. Also, there is still a question on whether the company that transported the patient will get reimbursed if they are seen again within the month.
And, the NFPA hasn’t been sitting idly by. Members have been busy studying the issue and hearing from stakeholders. The proposed community medicine standards document currently rests with a technical committee, according to NFPA Public Fire Protection Division Manager Ken Willette. Ken Knipper, who chairs the NFPA committee, said the issue impacts all providers – volunteers and career personnel. He said the group understands that not all communities have paramedics, and the document will address that. Knipper added that building and cultivating relationships more important now than ever before.
What about your department? What are your future plans in regards to this issue? Please let us know your thoughts in the comments below.
NATIONAL FIRE SERVICE ORGANIZATIONS ADDRESS VOLUNTEER FIRE SERVICE CONCERNS WITH THE PATIENT PROTECTION AND AFFORDABLE CARE ACT
The Congressional Fire Services Institute (CFSI), the National Volunteer Fire Council (NVFC) and the International Association of Fire Chiefs (IAFC), are currently working with members of Congress and the Administration to address the potential impact that the Patient Protection and Affordable Care Act (PPACA) could have on volunteer fire departments throughout the nation.
According to the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148), employers with more than 50 full-time employees (or their equivalents (FTE)) must provide health insurance to employees that work more than 30 hours per week. Unfortunately, the Internal Revenue Service has ruled that volunteer firefighters that receive nominal benefits from their fire departments (including stipends, end-of-the-year banquets and awards) count as "employees" of fire departments. An unintended consequence of this IRS ruling is that fire departments may have to provide health insurance to volunteers that serve more than 30 hours per week at their local fire department.
The effect of this provision could cause serious financial hardship to fire departments. Many volunteer fire departments rely upon local donations and fundraisers to fund their basic operations. The addition of a requirement to provide health insurance would present a serious financial challenge to them.
Although the final regulations have not been codified, the aforementioned organizations are working with a bipartisan group of members of Congress to address this potential consequence of the PPACA.
The NVFC, IAFC, and several members of Congress have sent letters to the IRS asking Acting-Commissioner Werfel to release regulations or guidance stating volunteers who receive nominal compensation will not be considered employees under PPACA. On December 10, 2013, Senator Mark Warner (VA) and Congressman Lou Barletta (PA-11) introduced the Protecting Volunteer Firefighters and Emergency Responders Act (H.R. 3685 and S. 1798). The legislation ensures that volunteers are not counted as full-time employees under the shared responsibility requirements contained in PPACA.
CFSI, NVFC and IAFC will continue to provide updates to the fire service as these efforts are being addressed on Capitol Hill and within the Administration. Please visit our website sites (www.cfsi.org, www.nvfc.org, www.iafc.org) for the latest information.
Bill Webb (CFSI)
Dave Finger (NVFC)
(202) 887-5700 ext. 112
VFIS of Texas NEWS
Here you will find helpful information regarding firefighters, ems responders, and updates in insurance policies.