The healthcare reform bill from the Senate Finance Committee has been released.  (You can find a link to the entire bill on the TASC Healthcare Reform Watch page.)  The bill is 1,500 pages long and for the most part is pretty much what we expected.  However, there are a couple of twists.

1. The bill calls for creation of a SIMPLE Cafeteria Plan (Pages 371-374 of the bill).  Much like the SIMPLE Plans in the retirement world, this would ease the non-discrimination requirements small employers face when implementing a Cafeteria Plan.
2. There appears to be a push amongst a handful of Senators to raise and index the proposed cap on total benefits an employee can receive (Page 337 of the Committee Report).  Their proposal would index the cap tied to the Consumer Price Index plus 1 percent.  These Senators are also talking about bumping up the cap for employees 55 years or older.  This proposal would increase the cap for older employees by $1,850 a year for single employees and $5,000 a year for families.

TASC sees both proposals as positive.  Too often poorly-designed non-discrimination requirements have discouraged small employers from using these Plans.  Anything that can ease these regulations will increase acceptance, which ultimately will benefit employees.

This is a first, quick look at a very extensive document.  We will take a step back and review this material more closely.  Watch for more updates soon.

The Senate Finance Committee has approved its version of the healthcare reform bill.  Check out the latest on our website at www.tasconline.com/healthcarereform/index.html.

The eyes of the sporting nation are upon the Midwest today as the Green Bay Packers prepare to take on the Minnesota Vikings, their arch-rivals from just across the Mississippi River.  This particular contest is especially interesting because long-time Green Bay quarterback Brett Favre is lining up with Minnesota against his former team.  This drama features so many colorful characters, sub-plots, and accusations that the daytime soap operas are envious.

Many football fans in TASC’s home state of Wisconsin and in Minnesota (where TASC maintains an office with 45 employees and many more Clients and Providers) are now divided into two camps: Green Bay Packer fans, and Brett Favre fans.  Fans of the Packers believe that no matter the circumstances that caused Favre to leave Green Bay, he is now on another team, and they want him to lose.  Fans of Favre believe the Packers were wrong not to bring back the man who three times was voted Most Valuable Player, and they are pulling for Favre to obtain revenge on the Packers.

I for one, belong to the first group.  I believe that no one player is more important than the team.  And I take it one step further: once an individual is considered indispensable to the success of an organization, ensuing problems are bound to occur.   And just as Brett  Favre didn’t win the Super Bowl all by himself, no one individual is solely responsible for TASC’s success.  No matter the size of the role, the efforts of everyone here at TASC contribute to the success of our organization.

The Favre-Packers saga has also prompted me to think about what it takes to keep an organization moving forward.  I hold fast to one major key to success: never allow your organization to get too satisfied.  This means never stop investing in your organization, never stop diversifying your products and services, and never stop training your staff.  Failure in any of these areas will make you vulnerable to competitive forces.  I don’t blame the Vikings for believing that signing Brett Favre improves their team’s chances this season.  And I don’t blame the Packers for thinking it was time to move forward without him.  Every team wants high performing players that fit into the overall scheme of the team.  That is certainly what TASC looks for in new hires.  It’s also about never being completely satisfied with your organization and always looking for ways to improve it.  That is something all football fans can agree on.

Go Pack!

In July and August of 2009, Nielsen Consumer Research conducted a survey of Flexible Spending Account (FSA) Participants.  The purpose of the research was to better understand the number and types of consumers who are currently covered by FSAs, how they use FSAs, and their perceptions of FSAs overall.  As the debate over healthcare and the proposed changes to FSAs continues, the findings of this survey help put this issue in perspective.

Some key survey findings include:

• An estimated 33 million Americans participate in FSAs either as a Participant or as a dependent of a Participant.
• Forty-two percent of FSA Participants contribute more than $2,000 a year; the mean contribution per Participant is $1,569 per year.
• Almost 35 percent of Participants live in households income with less than $55,000, while for 73 percent household income is under $100,000.  The mean household income for all FSA Participants is $77,625.
• Participation is disbursed across all age groups, with nearly 60 percent under the age of 44.
• Participants use their FSA dollars for these top five types of expenses: prescription drugs, medical office visits, dental office visits, eye care, and over-the-counter medications.

The findings clearly indicate that a large number of middle-class Americans participate in a FSA.  Also interesting is the number of Participants who contribute more than $2,000 a year to their FSA.  The $2,000 yearly cap on FSA contributions that has been proposed in the Senate Finance Committee’s America’s Healthy Future Act would affect nearly half of all Participants.

Beyond the numbers, there some other enlightening facts to be gleaned from the survey findings.  For example, 89 percent of FSA Participants believe the benefit is important and 51 percent claim that losing the benefit would have detrimental effect on them. Seventy percent of the respondents feel that participation in a FSA is an essential part of their family’s healthcare budget, with 62 percent stating that if they had no FSA they would have to take funds from other important sources to afford their family’s healthcare.

Not surprisingly, 91 percent agree that FSAs should remain an option for Americans, 87 percent agree that more Americans should be able to have access to a FSA, and 85 percent agree that continued availability of FSAs should be part of any healthcare reform legislation.  Also not surprising, 84 percent of the Participants stated that they would contribute more to their FSA if there was no risk of losing funds at the end of the year.

So what is the big takeaway from this survey?  Large numbers of middle-class Americans depend on FSAs to afford healthcare and strongly believe that any healthcare reform bill should include continuation of Flexible Spending Accounts.  At TASC, we agree 100 percent.

On Saturday morning the Senate Finance Committee posted a list of amendments to the America’s Healthy Future Act it released last week.  In total, there were more than 500 amendments.  Roughly 18 of the amendments related to our industry, and all of the 18 – which were proposed by Democrats and Republicans alike — are seen as very positive for our industry and for employers and employees who benefit from these types of Plans.  The amendments include proposals to increase the cap on Flexible Spending Accounts (FSAs), to set-up better indexing of the cap, and to retain the tax deductions for over-the-counter medications.  Senator Max Baucus (D-MT) and the Senate Finance Committee expect to begin deliberations on the Act later this week.

  Here is a sampling of some of the proposed amendments:

• Senator Charles Schumer (D-NY) proposed increasing the FSA cap to $3,000 and applying the same index to the FSA cap as that applied to the threshold for the excise tax.
• Senators Olympia Snowe (R-ME) and Mike Enzi (R-WY) proposed increasing the FSA cap to $3,000 as well.
• Senator Pat Roberts (R-KS) proposed increasing the FSA cap to $5,000 and allowing for the rollover of unused funds.
• Senators Jon Kyl (R-AZ), John Ensign (R-NV), and John Cornyn (R-TX) all proposed eliminating the cap on FSAs.
• Both Senators Orrin Hatch (R-UT) and Jim Bunning (R-KY) want to amend the bill so that over-the-counter medications qualify as medical expenses.
• Hatch and Roberts also want to amend the bill to exclude FSAs from determination of threshold for excise tax.

As you can see, both Republicans and Democrats are proposing amendments, and so far all of the proposals are favorable from our standpoint.  Perhaps the real message here is that we are still along way from this becoming law.  The bill is moving through the process and will likely undergo a lot of changes before it hits the President’s desk.  Stay tuned…