TASC CEO Blog

After a long week of debate, on April 15th President Barack Obama signed an $18 billion bill temporarily extending unemployment and health benefits to millions of Americans, including those receiving coverage through the Consolidated Omnibus Budget Reconciliation Act (COBRA).

Through the bill, a 65 percent subsidy of COBRA benefits for those who have lost their jobs is extended through May 31, 2010.  On April 5, tens of thousands of unemployed Americans started to lose their benefits after being out of work for a period of more than 26 weeks.  The new bill works retroactively to April 5, meaning benefits will also be restored for anyone who became unemployed since that date.  Under the new extension, persons who file for unemployment benefits before June 1 will receive the 65 percent subsidy for up to 15 months.

With consumer spending on the rise and unemployment slowing, I think this may well be the final extension of COBRA that we see.  Like many of our leaders, I am cautiously optimistic that most individuals will find work in that time period and no longer need COBRA.

The Senate sent the healthcare “fixes” Bill back to the House on Thursday and the House passed the Senate changes to the Reconciliation Bill by a vote of 220 to 207.  The Bill now goes to the President for his signature.  Earlier, the Senate passed the Reconciliation Bill by a vote of 56 to 43.

This part of our nation’s healthcare reform has been a long and strange journey, and it’s nearly over…for now.  Once President Obama signs this Bill into law–coupled with the previous Bill already enacted into law by the President–healthcare reform legislation will have transpired.

Three Democrats voted against the Bill–Senators Ben Nelson (Neb.), Mark Pryor (Ark.) and Blanche Lincoln (Ark.)–but it easily prevailed because Reconciliation Bills require only a simple majority to pass, not the 60 votes typically needed to advance Bills in the Senate.  All three Senators voted for the Bill that Obama signed when it passed the Senate in December.  Several Democrats also voted in support of some Republican amendments to the Reconciliation Bill but none were approved.  Senate Democrats promised their House counterparts not to alter the legislation and offered no amendments during the three days of floor consideration.

Passage is expected.  Of note are various successful Republican points-of-order (i.e. technicalities) that forced the deletion of a few provisions within the student-lending legislation that is attached to the Bill.

You can count on TASC to remain vigilant and to review in-depth the evolving legislation.  As various provisions of the Bill are clarified, we know new questions are likely to surface, and we are at the ready.  I have been in this business for 27 years, and have witnessed all the legislation and regulations that have been passed over that time relative to our industry and our customers.  With that experience, I am confident TASC will continue to provide leadership that our Clients can rely on.

Early on I predicted that some form of legislation would be passed on healthcare reform, however, I was expecting it to take place in the second half of the President’s four year term. I figured the economy would take a little quick up-tick and the Democrats would be settled into the driver’s seat for a while. For various reasons this legislation will come sooner than I thought. As previously stated, the Senate passed a healthcare reform bill and it was done with the sixty votes needed. After months of strategic and tactical discussions, H.R.4872, the Healthcare Reform Reconciliation Bill, was posted on-line at 2:20 p.m. Thursday, March 18, 2010. That started the 72-hour clock ticking—the time Congressional leadership promised for review of the bill prior to a vote. Thus, a vote in the House could come no earlier than Sunday afternoon (March 21, 2010). Whether the House will vote that soon remains to be seen. Expect some changes to the language. Presently, there are not 216 publicly committed “yes” votes in the House. Thus, the vote could be delayed past Sunday afternoon.

The process will require the House to enact into law H.R.3590, the Senate health reform measure, before the Senate votes on the changes to H.R.3590 contained in H.R.4872. Thus, anything in H.R.3590 not changed in H.R.4872 would become law as drafted in H.R.3590. An example of this would be the Simple Cafeteria Plan provisions under Section 9022 entitled “establishment of Simple Cafeteria Plans for small businesses.” Changes in the Reconciliation Bill that relate to our customers and TASC include the following:

• High Value Health Insurance Tax Threshold and Timing: The bill delays until 2018 the high value health insurance tax. This tax is a 40 percent tax, payable by the insurer or–where the plan is a self-insurance plan or for purposes of Flexible Spending Accounts (FSAs)–by the plan administrator or employer. The bill includes an increase in the threshold at which the high value health insurance tax is triggered. The new thresholds would be $27,500 for family coverage and $10,200 for individual coverage (higher thresholds—$39,950 and $11,850 respectively—would apply for those in high-risk occupations). The threshold amounts are indexed. Stand-alone dental and vision coverage would not be included in the calculation of the total value of health insurance.
• FSA Limitation: The new $2,500 annual limit (indexed) on FSAs would be delayed by two years, to 2013.

Both the Rules Committee and the House floor vote could take place on Sunday, March 21. President Obama will delay travel and be on hand for the House vote. The tactics used for getting the bill(s) passed does not seem to be public yet. House Democrats are considering using a self-executing rule, also called “deem and pass,” that would deem the underlying Senate healthcare bill passed once the reconciliation package is passed.

TASC and our industry will remain committed to trying to steer legislation that makes sense for its customers. This is a difficult task. In addition, TASC will continue to inform customers through channels like the CEO Blog, Client Alerts, etc., and will make every effort to help customers understand the impact of the changes. TASC will move our organization and services in line with customer need. Overall, the legislation is manageable related to TASC’s relationship and services with and to customers. Disregarding the “politics,” we expect the outcome of these bills to be acceptable to TASC, to our representatives, and to our Clients.

On a separate note, but related to TASC and our customers, the Hiring Incentives to Restore Employment (HIRE) Act was enacted into law on Thursday. This is the “Jobs” Bill. Originally there were provisions for another extension of COBRA in the Bill.  However, at the last moment Senator Harry Reid stripped those provisions because he wanted the bill not to lose its message or intent with respect to jobs.