White House Will Delay W-2 Insurance Reporting Requirement, Other Health Reform News

CongressDaily reports that the Obama administration announced Tuesday it will delay for one year a provision of the health law that requires employers to report the value of an employee’s health plan on tax forms. The White House says the extra time is necessary to give employers time to prepare to comply with the requirement. “Under the overhaul law, all employers who provide health insurance are required to include the information on workers’ tax forms after 2010. But instead of a mandatory reporting requirement, the IRS’ draft 2011 W-2 tax form includes an optional line for employers to report the cost of employer-sponsored health insurance coverage.” People do not have to pay taxes on their health insurance (McCarthy, 10/12).

The Hill: “And in a blog post Tuesday, Stephanie Cutter, the administration’s head of healthcare reform messaging, shot down one persistent rumor: that information about health benefits added to employees’ tax forms will translate into higher income taxes. That, she said, is not true. Employers have the option of adding the value of the plans to 2011 W-2 forms and will be required to do so in 2012, but the goal is to inform employees about their benefits, not tax them.” Starting in 2018, however, “the law does create an excise tax on high-cost healthcare plans. Starting [that year], so-called ‘Cadillac plans’ will be subject to a 40 percent tax on excess benefits. … The law defines such plans as costing more than $10,200 a year for individuals and $27,500 for families, with higher thresholds for risky professions such as firefighters and miners” (Pecquet, 10/12).

Related, earlier KHN story: ‘Cadillac’ Insurance Plans Explained (Gold, 3/18)

In other health law news, CQ HealthBeat reports that Consumers Union is warning that if the Department of Health and Human Services “goes along with the wishes of the insurance industry in setting rules for the creation of state-based exchanges, consumers won’t get the best deals … Exchanges would lack the power to exclude plans that don’t offer good deals, and insurers would be able to offer plans outside of exchanges that would siphon off good risks, said DeAnn Friedholm, director of health reform at Consumers Union. That would leave a disproportionate number of higher-cost enrollees — sick people — in plans offered inside the exchanges, driving up the premiums they charge, she said. Friedholm was commenting on a 35-page letter filed with HHS by America’s Health Insurance Plans (AHIP), the nation’s largest health insurance association, on how exchanges should be structured” (Reichard, 10/12).

CNN reports that Oregon’s Democratic governor candidate said the health law could be “toxic issue” in 2012 unless rising medical costs are addressed. “Former Gov. John Kitzhaber, a physician and a lead architect Oregon’s state run health program, is seeking his old job back this year after serving two terms from 1995 to 2003. … But Kitzhaber said he would seek a waiver as governor to launch a ‘pilot project’ to experiment with federal health care dollars and examine ways to reduce costs, and he suggested other states should do the same. ‘I supported the passage of the bill but I think we need to recognize that this was really health insurance reform and not health care reform,’ he said in an interview over coffee at a Portland diner” (Hamby, 10/12).

The Sacramento Press says a group of doctors in California seeking government-run, universal health care is worried the “situation with health care is getting worse faster than the federal health overhaul is going to make it better. … Dr. Paul Hochfeld, a emergency room physician who founded the group, which calls itself the Mad as Hell Doctors … said the federal overhaul passed by the Congress in March and April was beneficial. But it does not go far enough. The reforms adopted do little or nothing to control medical costs, and costs continue to increase” (Kirn, 10/12).

Finally, three former U.S. attorneys general “are supporting Virginia’s lawsuit challenging the federal health care reform law,” The Associated Press reports. “A friend-of-the-court brief filed Tuesday by Republicans William Barr, Edwin Meese and Dick Thornburgh supports Virginia Attorney General Ken Cuccinelli’s claim that Congress lacks authority to require citizens to buy health insurance or pay a penalty. The insurance mandate is the chief issue in Virginia’s lawsuit” (O’Dell, 10/12).

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