Do You Have a Choice in Health Insurance?

A number of religious institute members have expressed concern and disappointment in recent months over the way that the Affordable Care Act has structured health insurance on the exchanges. Because those members who work within the institute or for another Catholic employer have no reportable income, the only option available to them when they go to the state marketplace is Medicaid. Even if they wanted to pay something toward their health care, they are not allowed to apply for a non-Medicaid plan on the exchange and qualify for a subsidy.

An article yesterday by Nicole Hopkins in the Wall Street Journal expressed similar dismay over this dilemma. Hopkins' mother is age 52 and has minimal income due to circumstances in recent years. However, despite her low income, for years she has chosen to pay for her own health insurance. Under the new law, however, the policy she has been happy to pay for for years will no longer be available. Indeed, her cost would increase by 50%, and her deductible would skyrocket, if she chose to continue to pay for her own insurance. Hopkins writes:

The Sept. 26 letter from my mother's insurer promised that the more expensive plan "conforms with the new health care law"—by covering maternity needs, newborn wellness and pediatric dental care. My mother asked: "Do I need maternity care at 52?" In addition to requiring her to pay an extra $1,677 annually, the plan would have increased her deductible by $1,500.

Thinking that her mother had made a mistake and that she must be able to bypass Medicaid and opt to pay something for her coverage, Hopkins walked her mother (in the state of Washington) through the online application process from across the country (in New York). Of the application process she writes:

The situation sounded absurd, so I asked her to walk me through her application on Washington Healthplanfinder to make sure she wasn't missing anything. Sitting in New York with my computer, I logged onto the site under her name and entered the information my mother provided over the phone. I fully expected her to realize that she had forgotten some crucial piece of information, like a decimal point in her annual income. We checked and double-checked the information, but the only option still appeared to be Medicaid. She suggested clicking on "Apply for Coverage," thinking that other options might appear.

Instead, almost mockingly, her "Eligibility Results" came back: "Congratulations, we received and reviewed your application and determined [you] will receive the health care coverage listed below: Washington Apple Health. You will receive a letter telling you which managed care plan you are enrolled with." Washington Apple Health is the mawkish rebranding of Medicaid in Washington state.

The page lacked a cancel button or any way to opt out of Medicaid. It was done; she was enrolled, and there was nothing to do but click "Next" and then to sign out.

Hopkins listened as her mother explained to her why she was so averse to being forced to go on Medicaid.

"I just don't expect anything positive out of getting free health care," she said. "I don't see why other people should have to pay for my care, whether it be through taxes or otherwise." In paying for health insurance herself—she won't accept help from her family, either—she was safeguarding her dignity and independence and her sense of being a fully functioning member of society.

Before ObamaCare, Medicaid was one option. Not the option. Before this, she had never been, in effect, ordered to take a handout. Now she has been forced to join the government-reliant poor, though she would prefer to contribute her two mites. The authorities behind "affordable care" had erased her right to calculate what she was willing to spend to preserve her dignity—to determine what she thinks is affordable.

That little contribution can mean the difference between dignity and despair.

For the truly poor, being institutionally forced to take welfare is demoralizing. The Affordable Care Act is at risk of systematizing learned helplessness by telling individuals like my mother that they cannot afford to care for themselves in the way they could before the law was enacted. "This makes me feel poorer than ever," she said.

Naturally not everyone feels the same way as Hopkins' mother. Many see Medicaid as an "entitlement" that is available to anyone who qualifies. It has been, and continues to be, for many a life-saving program. And that is a good thing.

But when someone is willing and able to pay something toward her upkeep, when it matters to her that she maintain some modicum of internal pride and dignity, being forced to depend on the government is a humiliating experience. Ms. Hopkins' mother's dilemma is indeed sad.

In a country that has grown and thrived for centuries due to an indefatigable belief in hard work, unfettered  human ingenuity, and  indomitable courage, are we indeed facing a government that can tell us "we know what's best for you" (comprehensive coverage that you do not need) and "you must settle for what we give you" (Medicaid)? Sadly, it is looking that way more and more.

To read Ms. Hopkins' entire article, go to http://online.wsj.com/news/articles/SB10001424052702303531204579207724152219590.

Various Tax Benefit Changes for 2014

The following year-end tax information is taken from IRS Newswire IR-2013-87. We have highlighted several points that affect either or both religious with earned income and/or their employees or which are commonly asked about by our members.

Note that the combined standard deduction ($6200) and personal exemption ($3950) for 2014 equals $10,150, which is the threshold amount of income that a religious (under age 65) would have to report in order to be required to file an income tax return in 2015. This could be important when it comes to determining whether a member will be susceptible to paying a tax/penalty if s/he is not covered by a qualified health insurance coverage in accord with the ACA.

Note that Revenue Procedure 2013-35 listing these and other changes is available at http://www.irs.gov/pub/irs-drop/rp-13-35.pdf.

In 2014, Various Tax Benefits Increase
Due to Inflation Adjustments

WASHINGTON — For tax year 2014, the Internal Revenue Service announced today annual inflation adjustments for more than 40 tax provisions, including the tax rate schedules, and other tax changes. Revenue Procedure 2013-35 provides details about these annual adjustments.
The tax items for tax year 2014 of greatest interest to most taxpayers include the following dollar amounts.

• The tax rate of 39.6 percent affects singles whose income exceeds $406,750 ($457,600 for married taxpayers filing a joint return), up from $400,000 and $450,000, respectively. The other marginal rates – 10, 15, 25, 28, 33 and 35 percent – and the related income tax thresholds are described in the revenue procedure.
• The standard deduction rises to $6,200 for singles and married persons filing separate returns and $12,400 for married couples filing jointly, up from $6,100 and $12,200, respectively, for tax year 2013. The standard deduction for heads of household rises to $9,100, up from $8,950.
• The limitation for itemized deductions claimed on tax year 2014 returns of individuals begins with incomes of $254,200 or more ($305,050 for married couples filing jointly).
• The personal exemption rises to $3,950, up from the 2013 exemption of $3,900. However, the exemption is subject to a phase-out that begins with adjusted gross incomes of $254,200 ($305,050 for married couples filing jointly). It phases out completely at $376,700 ($427,550 for married couples filing jointly.)
• The Alternative Minimum Tax exemption amount for tax year 2014 is $52,800 ($82,100, for married couples filing jointly). The 2013 exemption amount was $51,900 ($80,800 for married couples filing jointly).
• The maximum Earned Income Credit amount is $6,143 for taxpayers filing jointly who have 3 or more qualifying children, up from a total of $6,044 for tax year 2013. The revenue procedure has a table providing maximum credit amounts for other categories, income thresholds and phaseouts.
• Estates of decedents who die during 2014 have a basic exclusion amount of $5,340,000, up from a total of $5,250,000 for estates of decedents who died in 2013.
• The annual exclusion for gifts remains at $14,000 for 2014.
• The annual dollar limit on employee contributions to employer-sponsored healthcare flexible spending arrangements (FSA) remains unchanged at $2,500.
• The foreign earned income exclusion rises to $99,200 for tax year 2014, up from $97,600, for 2013.
• The small employer health insurance credit [SBHCTC] provides that the maximum credit is phased out based on the employer’s number of full-time equivalent employees in excess of 10 and the employer’s average annual wages in excess of $25,400 for tax year 2014, up from $25,000 for 2013.

Details on these inflation adjustments and others not listed in this release can be found in Revenue Procedure 2013-35, which will be published in Internal Revenue Bulletin 2013-47 on Nov. 18, 2013.

Confusion Surrounds Implementation of ACA

If you are finding yourself confused over what lies ahead as we quickly approach deadlines in the implementation of the Affordable Care Act, you are not alone. The employer mandate has been delayed for a year, but not the individual mandate. People all over the country are expressing mixed emotion and mixed levels of understanding about what to expect.

Recently at our National Conference in Anaheim we had two experts speak at our pre-Conference workshop on the ACA. Many religious institutes remain concerned over the requirement that essentially all health insurance policies (for men and for women alike) cover women's preventive services that include contraceptives, sterilization, and abortion-inducing drugs. We have a webinar scheduled for mid-November that will address in part the latest on the status of the contraceptive mandate and the ongoing litigation in courts across the United States. Watch for emails and check our website in the next few weeks when we open the webinar for registrations.

Employer Reporting of Employee Health Insurance Costs on W-2s

We continue to receive questions about the status of the ACA provision requiring employers to report on their employees' W-2s the amount that is paid for the employees' health coverage. This provision is still unsettled, and the IRS has instructed that until further notice certain employers with under 250 employees are not required to report the health coverage costs on employee W-2s. Employers can do so, but it is optional.

For more on this IRS statement, go to http://www.irs.gov/uac/Employer-Provided-Health-Coverage-Informational-Reporting-Requirements:-Questions-and-Answers.

For details on what must be reported, see the chart at this link: http://www.irs.gov/uac/Form-W-2-Reporting-of-Employer-Sponsored-Health-Coverage.

Are You Eligible for the Combined Federal Campaign?

The 2013 Combined Federal Campaign (CFC) has been launched and federal organizations across the country are preparing to participate. CFC is the largest and most successful workplace fundraising campaign in the world. It raised $7 billion for thousands of charities over the past 50 years.  In 2012, 130,000 generous federal employees gave nearly $62 million to help neighbors in need around the corner, across the nation and throughout the world.

Through the CFC’s local campaigns, federal employees have the opportunity to donate to thousands of approved charities (see for example, the complete online list of participating charities in the Washington, DC area campaign: 2013 Catalog of Caring).

The theme of this year’s campaign is “Make It Possible,” designating all the ways the CFC campaign makes it possible for federal employees to make the world a better place.  Many federal agencies will be kicking off their campaigns on October 1 and will run them until December 15 to allow employees to choose charities to receive their donations.

Although it is too late to get onto the list for 2013’s campaign (for money that will be distributed in 2014), Catholic organizations may want to apply to be on the list of eligible organizations in late 2014 (for distributions made in 2015).

RCRI produced a webinar on the CFC in 2012. You can view the webinar and learn more about this potential for fundraising at this link: http://www.trcri.org/members/CFC.php.

EMPLOYER “DID YOU KNOW” PPACA FACTS

Some employers are unaware of some very important requirements and looming deadlines by which they must abide under the new health care law. We have grown accustomed to seeing the IRS and HHS named as the governing bodies in the implementation and enforcement of the PPACA, but the Department of Labor (DOL) is the third agency that is tasked with implementing and governing the new law. Below are a few often overlooked provisions that the DOL has published. Leaders of religious institutes and business office personnel should take notice and make sure that their sponsored ministries are compliant.

(1) Employers Must Give Employees Notice of Coverage Options by October 1, 2013 
Originally set for March 1, this deadline was extended until October 1, the same date that the state marketplace exchanges are set to open for business. See http://www.dol.gov/ebsa/newsroom/tr13-02.html.

This provision applies to virtually ALL employers no matter how many employees you have. It is incorporated into the Fair Labor Standards Act (FLSA), and it requires employers to provide a notice of coverage options to each employee, regardless of plan enrollment status (if applicable) or of part-time or full-time status. (Employers are not required to provide a separate notice to dependents.)

•  Employers are required to provide the notice to each new employee at the time of hiring beginning October 1, 2013. For 2014, the Department will consider a notice to be provided at the time of hiring if the notice is provided within 14 days of an employee’s start date. 
• With respect to employees who are current employees before October 1, 2013, employers are required to provide the notice not later than October 1, 2013. The notice is required to be provided automatically, free of charge. 

The notice must be provided in writing in a manner calculated to be understood by the average employee. It may be hand-delivered directly to the employee, provided by first-class mail, or delivered electronically (if the employee has access to email at work and is sure to get it). Posting a central notice in a common area does not suffice.

The notice that an employer sends must be in writing and it must inform the employee:

• …of the existence of the Marketplace (Exchange) including a description of the services provided by the Marketplace, and the manner in which the employee may contact the Marketplace to request assistance; 
• …that if the employer plan's share of the total allowed costs of benefits provided under the plan is less than 60 percent of such costs, that the employee may be eligible for a premium tax credit if the employee purchases a qualified health plan through the Marketplace; and 
• …that if the employee purchases a qualified health plan through the Marketplace, the employee may lose the employer contribution (if any) to any health benefits plan offered by the employer and that all or a portion of such contribution may be excludable from income for Federal income tax purposes. 

Sample Notices for Employers to Adapt for Employees
-For a sample notice that employers can use for employees to whom they offer health insurance coverage, go to this link.
-For a sample notice that employers can use for employees to whom they do NOT offer health insurance coverage, go to this link.
The differences in these notices is very subtle, but be careful to use the correct one. Also, be sure to fill in the blanks with the applicable contact information when called for.

(2) Automatic Enrollment in Health Plans when employers have more than 200 employees http://www.dol.gov/ebsa/faqs/faq-aca5.html
PPACA amended the FLSA by adding a new section requiring employers with more than 200 full-time employees to automatically enroll new full-time employees in the employer’s health benefits plans and continue enrollment of current employees.

What Agency is responsible for guidance under this new FLSA provision? 
The Secretary of Labor has delegated responsibility for rulemaking and for regulations of this new provision to the Employee Benefits Security Administration (EBSA) within the DOL. EBSA and the Department of the Treasury will coordinate to develop the rules that will apply in determining full-time employee status for purposes of the amendments to the FLSA and the rulemaking by the Treasury Department under the Internal Revenue Code to develop the rules that will apply in determining full-time employee status.

When do employers have to comply with the new automatic enrollment requirements of the FLSA? 
Are you ready for this answer? Section 18A provides that employer compliance with the automatic enrollment provisions of that section shall be carried out “[i]n accordance with regulations promulgated by the Secretary [of Labor].” Accordingly, it is the view of the Department of Labor that, until such regulations are issued, employers are not required to comply with section 18A. The Department of Labor expects to work with stakeholders to ensure that it has the necessary information and data it needs to develop regulations in this area that take into account the practices employers currently use for auto-enrollment and to solicit the views and practices of a broad range of stakeholders, including employers, workers, and their families. The Department of Labor intends to complete this rulemaking by 2014.

(3) Ninety Day Waiting Period Limitation for New Employee Coverage (Link is here)

New DOL regulations propose that a group health plan, and a health insurance issuer offering group health insurance coverage, not apply any waiting period that exceeds 90 days. (Neither a plan nor an issuer offering coverage is required to have any waiting period.) If, under the terms of the plan, an employee can elect coverage that becomes effective on a date that does not exceed the 90-day waiting period limitation, the coverage complies with the waiting period rules, and the plan or issuer will not be considered to violate the waiting period rules merely because individuals choose to elect coverage beyond the end of the 90-day waiting period.

This provision is effective January 1, 2014. The proposed regulations have several sample scenarios to help employers figure out if their plans are or will be compliant with the provision when it takes effect.

How Well Do You Know Your Bible?

If you are relaxing tonight, flipping channels, and looking for something to watch on the television, consider a 9:00 (Eastern time) detour over to the Game Show Network (GSN) where you can watch a fun episode of "The American Bible Challenge." (To see if the channel is available in your area, go to the GSN TV website and enter your zip code. Note the time differences also for those not in the Eastern time zone!)

What will make this program fun tonight is that a team of three Dominican Sisters from Michigan (Dominican Sisters of Mary, Mother of the Eucharist) will be competing in the semifinal round of this family-friendly quiz show that is a cross between "Minute to Win It" and "Are You Smarter than a Fifth Grader?" Jeff Foxworthy is the host of the program, and he will entertain you in his own comic style.

Sister Peter Joseph, Sister Maria Suso, and Sister Evangeline

Here is a snippet from the three young Sisters' previous appearance on the game show.

I learned about the Sisters' upcoming semifinal round appearance on Zenit. You can read more about them and their religious institute at this link.

We wish the Sisters the best of luck in their endeavor!