House Call; Health Insurance Tax Could be Sticking Point

The Massachusetts House of Representatives last week weighed in on "universal health insurance," passing a bill incorporating many of the ideas proposed earlier by the Romney administration and Senate leaders for reducing the number of uninsured. In endorsing a new insurance tax that likely would set back the state's effort to shed its "Taxachusetts" image, the House ventured into perilous territory. The bill passed last week includes a mandate for all residents to obtain health insurance. It also would levy a payroll tax on companies that do not provide health care benefits.

The payroll tax would equal 5 percent of payroll for companies with fewer than 100 employees, 7 percent for larger companies. Make no mistake: The need for reform of health care financing is one issue on which just about everyone in this state agrees. Massachusetts has some 530,000 uninsured residents, many of them the working poor who do not qualify for Medicaid.

The uninsured are not denied health care, but often routine care is delivered inefficiently in emergency rooms - with the costs ultimately borne by employers, employees and taxpayers. The Romney administration and the Senate leadership both have offered thoughtful proposals intended to shrink the number of uninsured by making health insurance more affordable - emphasizing incentives, innovation and competition rather than rigid mandates. Both propose offering lower-cost plans to those who can't afford gold-plated coverage and who do not have access to group rates. A proposed campaign to sign up low-income residents who qualify for Medicaid but are not enrolled would remove thousands more from the ranks of the uninsured.

Massachusetts has been trying to address this highly complex issue for decades. The Dukakis-era fiasco showed that the road to universal health care cannot be paved with good intentions alone. As the debate moves forward, avoiding the mistakes of the past should be the watchword.

02.09 | 0 komentar | Read More

Insurance Plan Would Help Disabled People Work

Sens. Edward M. Kennedy, D-Mass., and Richard M. "Mike" DeWine, R-Ohio, Tuesday introduced their third bill aimed at helping people with disabilities work outside the home while still receiving federal benefits. The Community Living Assistance Support and Services Act of 2005 would be a public insurance program, funded by a voluntary payroll tax of $30 per month. Workers who have contributed to the program for at least five years would be eligible to receive $50 to $100 in assistance per day if they became disabled, even if they continued to work.

Mr. Kennedy said the money could be spent as the recipient chooses on services such as transportation or personal home care. Mr. DeWine said many disabled people are unable to purchase private health and disability insurance because of pre-existing disabilities. People who become disabled frequently are "forced to bankrupt themselves" to get federal assistance, according to Jeff Sadosky, a spokesman for the senator. The bill would help disabled people work and be financially independent, he said.

Mr. Kennedy estimated that 7 percent of people with disabilities currently are unemployed and would benefit from the new program. "It's not a perfect bill," he said, adding that the measure is intended to build the concept of helping the working disabled, which could later be expanded to include the unemployed.

The payroll tax would be progressive, with low-income workers receiving a tax credit for a portion of the monthly premium. Unemployed people with disabilities could be covered if they had a working spouse. William Henning, director of the Independent Living Center in Boston, called the current system of aid for the disabled "counter- logical."

"It is a very complex system," he said. If a disabled person goes to work, Mr. Henning said, he or she is considered not to be "house- bound," and will lose eligibility for federal assistance. Mr. Henning said the assumption is that if a person can work and support himself, he must not be disabled. In fact, he said, "you can be quite disabled and still work." Mr. Henning has three employees who require assistance at home with activities such as cooking and bathing. In Worcester, this kind of assistance costs an estimated $22 an hour, or $28,000 a year, according to Mr. Kennedy's office.

Sens. Kennedy and DeWine also sponsored the bill reauthorizing the Rehabilitation Act in 1998, which funds employment training for disabled people, and the "Ticket to Work" Act of 1999, which allowed disabled people to join "employment networks" for placement assistance. Mr. Henning said the second bill helped disabled people gain better access to health insurance, but the job placement component hasn't worked as expected.

Reps. John D. Dingell, D-Mich., and John M. Shimkus, R-Ill., will introduce the bill in the House later this week, Sen. Kennedy said.

02.04 | 0 komentar | Read More

Insurance Mandate Advances; House Approves Health Care Plan

With an overwhelming vote mostly along party lines, the House late last night adopted a groundbreaking bill to provide universal health insurance, including a mandate for all residents to obtain health insurance and a controversial new payroll assessment on companies that provide no health care benefits for their employees.

House Republicans joined Gov. Mitt Romney in arguing against the payroll fees that would rise over 18 months to 5 percent of total payroll for companies with 100 or fewer employees and 7 percent for larger companies that do not contribute to worker health plans. The governor said he strongly supports the overall legislation, although he believes that universal health care could be achieved without the payroll assessments. He stopped short, however, of threatening a veto if the bill included the payroll fees, but did say he views them as a "non-starter."

The House, however, modified the payroll fee before final passage with amendments reducing the total revenue they would bring in from $650 million to about $300 million. The change would ensure that no firms that provide insurance would be charged the payroll fees. Revenues would be made up using funds from the tobacco lawsuit settlements. House leaders said.

But shortly before midnight, House Democrats championed their version of a universal health care bill by a veto-proof margin of 131-22. House Speaker Salvatore F. DiMasi, D-Boston, however, defended the assessments. He argued that about $650 million from the fees is needed to expand MassHealth programs to cover more people and create a system of subsidized individual and small group health plans affordable to lower- and middle-income residents.

A Republican amendment to eliminate the fees from the bill failed on party lines by a veto-proof vote of 129-24 shortly after 7 p.m. as debate continued on numerous amendments. The speaker maintained that the payroll fees also would "level the playing field" between companies that put up funds for worker insurance plans and those that do not.

While the governor cautioned that the fees would add to the high cost of doing business in the state, Mr. DiMasi said the new programs would lower health costs for most businesses and eliminate the need for all companies to contribute to the $160 million payroll fund that now pays for free care for the uninsured. Mr. DiMasi called on House members to sell the proposals to the public and claimed the fees are needed to make the universal health care plans work. "It's the only way we will get this done," he said in a floor speech. "What we are proposing today is a bold proposal. It takes bold and courageous leadership to pass this proposal. Our system is broken and it has to be fixed," he said.

Without the subsidies supported by the payroll fees Mr. DiMasi argued many people would not be able to afford the mandate to purchase insurance. That mandate, supported by Mr. Romney, would require all individuals who do not have employer-assisted health care or qualify for the state and federally funded MassHealth program to purchase insurance starting Jan. 1, 2007.

A state clearinghouse would offer subsidized plans on a sliding scale that would provide comprehensive health plans for as little as $161 per month for an adult couple with two children earning $48,500 or $81 for an individual earning $24,000. The legislation would require all residents to verify their health insurance plan on state income tax returns, which would be checked against lists compiled from health insurance companies.

Failure to carry insurance would result in a penalty against the individual equal to half the cost of an insurance plan, and failure to pay those penalties within 60 days would result in the state notifying the Registry of Motor Vehicles not to renew that person's driver's license and car registration. The House plan calls for an estimated 205,000 people currently without insurance to be brought under the MassHealth program, by raising the income guidelines to 200 percent of the federal poverty level for adults with children and 300 percent for children. Another 220,000 currently without insurance are expected to become insured through small group and individual plans that would be available through changes in the law to allow payment using pretax payroll deductions.

Another 163,000 people are expected to qualify for the subsidized insurance plans that would be administered by a state insurance office. Republican House leader Bradley H. Jones of North Reading said there was bipartisan agreement for the individual mandate provisions and expansion of state and federally funded MassHealth programs. But he insisted the state's businesses were in no shape to shoulder more insurance fees. "Don't add a huge new tax to an already struggling Commonwealth," Mr. Jones said, asking the House to drop the payroll assessment portion of the bill.

Rep. George N. Peterson, R-Grafton, said the money being spent in the health care system today is more than enough to "cover health insurance for all of us ... without a $650 million tax on businesses." State Rep. Robert P. Spellane, D-Worcester, said that without the payroll assessments, "employers who choose not to provide insurance are getting away with a free ride." With changes adopted to provide credit from the payroll assessments for firms with seasonal workers and employees covered by insurance from spouses and parents, he said, companies that contribute to employee health plans "won't be affected."

"Employers will have a decision to make," he said. "Do you want to pay the fee or provide insurance?" Mr. Spellane questioned the governor's claim that universal coverage could be accomplished without additional spending.

01.58 | 0 komentar | Read More

Professional Fees Insurance

Who offers professional fees insurance? There are four main providers of cover in the UK. These are Abbey Tax, Professional Fee Protection, IRPC and Peninsula. What is covered by it? Either the insurance company will appoint a representative to act for the taxpayer in the event of an investigation or inquiry or it will pay up to around Pounds 75,000 towards the cost of the accountants' time instead of representation costs.

What is not covered? If the tax return has been submitted late, or if a case is investigated by the HMRC's Special Compliance Office which looks at fraud, then claims will not be covered. In other words insurance will be void if you set out to dodge tax in your return. How much does this insurance cost? To buy this type of insurance cover on a one off basis, you can expect to pay about Pounds 80 to Pounds 100 annually. However, it will depend on whether you buy separate cover or through your accountant.

For cover from Professional Fee Protection, which often sells many policies through one firm of accountants, it could cost between Pounds 40 and Pounds 120, depending on how many other people take it out through the firm of accountants that does your tax return.

Is there an excess to pay? "Full" inquiries tend not to trigger an excess but "aspect" investigations could cost the taxpayer the first Pounds 80-Pounds 150 of a claim. Is it worth it? That will depend whether you face an investigation or not. The average cost of a Revenue investigation is Pounds 2,500 but it could cost a lot more or a lot less than that depending on how complicated your affairs are.

01.50 | 0 komentar | Read More

New Insurance Rules Will Hit the Smallest Firms Hardest

Caroline Goorney is a sole practitioner based in Newcastle-upon- Tyne, specialising in family law. For the past 20 years, she has practised law without facing a single claim. However, when she organised her professional indemnity cover this summer, she was confronted by a 35 per cent hike in her premiums. The rules affecting solicitors' indemnity insurance changed on October 1 2005. The minimum cover re-quired by all practices has now doubled to Pounds 2m, and is set at Pounds 3m for limited liability partnerships. This will be the first change in cover limits in 17 years.

Tim Readman, who sits on the Law Society's Insurance Indemnity Committee and is a former council member, says there were good reasons to increase the cover limit. "The number of claims were increasing, damages were increasing. Overall it's in the public interest," he says. However, the effects on certain segments of the legal profession could be severe. For many sole practitioners and small firms, their professional indemnity payment is their largest single overhead. Although the big commercial law firms will not be greatly affected by the new rules, the other 85 per cent of private practice law firms with partners of four or less will. Mr Readman says: "For sole practitioners who are already struggling, it could mean the difference between continuing and not continuing."

Some brokers say in-creased premiums are not necessarily the result of the changes. Geoffrey Pointon, chairman of PYV Group, a specialist financial services company, says: "Smaller law firms who looked around the market probably saved over 50 per cent on last year. Most were expecting to be charged extra for the Pounds 1m but we had more underwriters offering us cover this year than ever before." However, this will only be a temporary reprieve. Next year the impact of the changes is expected to hit the smaller practices in their pockets. Research from AON, the insurer, shows that smaller practices are most likely to require good negligence cover. Almost half the negligence claims in the UK (43 per cent) arise from residential conveyancing work undertaken by firms with 10 or fewer partners.

At the other end of the spectrum, the biggest UK law firms are unaffected by the changes as most of the top 1,000 carry cover well in excess of the Pounds 3m upper limit. However, the process of putting professional indemnity in place is still onerous and time consuming. Many firms since September 11 2001, and the subsequent capital scarcity, have had to go through what amount to "marketing exercises" where they display their risk-management processes to insurers to obtain cover economically. In addition, with commercial transactions now regularly ex-ceeding Pounds 1bn in value, the potential for a catastrophic claim - one that exceeds a law firm's insurance cover - grows. Mr Pointon says: "The big, big firms can't buy the cover they need because the insurance market is not big enough, so some major firms are uninsured effectively above a couple of hundred million."

Chris Perrin, executive partner and general counsel at the global law firm Clifford Chance, says this problem is not new for the big firms. "We have as much cover as we can reasonably get and this is materially more than Pounds 200m," he says. One of the ways in which Clifford Chance covers itself is to buy indemnity policies from as many as 40 different underwriters from around the world, with no individual underwriter having an exposure above Pounds 20m-25m. Similarly, Ian Dinwiddy, finance director at another global law firm, Allen & Overy, says it has been widening the group of insurers that are interested in underwriting law firms by going to New York and Bermuda.

But, as Mr Dinwiddy says, although most big firms have total cover that is a multiple of the largest claim that has ever been paid, "it's no guarantee that it's the largest claim that will ever be paid in future".

01.42 | 0 komentar | Read More