January 14, 2013

The Virginia General Assembly began last Wednesday and will continue until February 23. Health care reform is one of a number of issues they will be considering. Governor McDonnell has recommended that the state do little to nothing on health care reform. But legislators in both parties are pushing for action on this issue.

On the Health Benefits Exchange (HBE), at least two bills have been introduced in both the Virginia House of Delegates and Senate that would establish a state run Health Benefits Exchange. While none of the bills are perfect, they all would move Virginia forward towards an HBE, although the state probably could not run the exchange until 2015 (the federal government would run it in 2014). The state may also look at the option of a “partnership” exchange, where the state and federal government jointly run it.

Medicaid Expansion will be one of the biggest issues of the session. Recent studies have shown that Virginia expanding Medicaid will save small businesses money, as well as costing the state less than not expanding Medicaid. The fight for expansion will be in the budget discussions. The budget negotiations can be harder to follow and often move into conferences where very few legislators are involved.

Please contact your members of the General Assembly and ask them to take action on health care reform. The website http://virginiageneralassembly.gov/ has an easy way to find out who your legislators are and to contact them. Click on the “who’s my legislator” button at the top of the page.

Because the federal government will pick up most of the cost, and because the state spends a good deal now on indigent care, expanding Medicaid will cost very little, while not expanding it may drive up costs a good deal. Plus, a recent study commissioned by the Virginia Hospital and Healthcare Association showed that health insurance costs for those with coverage should go down by slightly less than 1% as fewer folks are using uncompensated care. Finally, expansion should add about 30,000 health care jobs. The report is available at http://www.vhha.com/medicaideconomicimpact.html.

FISCAL CLIFF OUTCOME: Both Houses of Congress passed a bill to avoid the “fiscal cliff” of massive tax hikes and spending cuts. In brief the deal: keeps income taxes stable for everyone making less than $400,000 ($450,000 for a family of 4); delays the massive spending cuts know as sequestration until March 1; allows the social security payroll tax cut to expire; extends increased unemployment insurance for a year; expands Earned Income Tax Credit for five years; and keeps the “full” package of tax breaks for business investment. The agreement did not deal with increasing the federal debt limit.

The federal government has a new online tool to help small businesses (and individuals) find health insurance options. See http://www.healthcare.gov/videos/2011/11/small-business-health-plan-finder.html for more information.

As of October 1 there are new limits on debit card swipe fees. The new limit is 26 cents per swipe. The national MSA was very active in this fight. See http://mainstreetalliance.org/ for more information.

There is a federal income tax credit for small businesses that provide health insurance for their employees. The credit will carry over into the future if it is not all used in one year. IRS form 8941 contains information http://www.irs.gov/pub/irs-pdf/i8941.pdf