March Madness: A Policy Version—The Elite Eight

By Ann Sullivan, WIPP Chief Advocate

For many years, my son Matt and I watched March Madness together (that was until he moved to Los Angeles). Not only are many of the games squeakers, I love the upsets and Cinderella teams that emerge during the tournament. Half of the fun is filling out the brackets and guessing which teams will move forward.

So, in honor of March madness, we bring you March policy madness. We have created a policy bracket of the issues we expect will make it past the first round of Congressional action. Just for fun.

WIPP Works Bracket March 2017.png 

Here’s an explanation of the Policy Brackets:

Upper Left: Healthcare vs. Border Wall

President Trump’s Executive Actions have identified both repeal of Obamacare and the potential construction of a border wall. Congressional attention is focused on repealing and or replacing the Affordable Care Act.

Healthcare wins this round.

Upper Left: Regulatory Reform vs. FY2018 Appropriations

Congress is hungry to take back policy-making power from the Executive Branch and has found a sweet spot—rolling back regulations—a move President Trump agrees with. He has already signed legislation repealing a Department of Interior rule and is expected to sign more repeals in the coming months.

On the other hand, appropriations is a long and cumbersome process. To get started, on Fiscal Year 2018 appropriations, President Trump needs to share a budget outline with Congress expected next month, and both the House and Senate Appropriations Committees will need to pass all 11 appropriations bills by the end of September. This is a process that has not occurred in over 20 years.

Regulatory reform wins this round.

Lower Left: Trade vs. Supreme Court Nominee

President Trump has indicated that reforming trade policy is a high priority.  But revamping global trade deals into bilateral negotiations will prove to be complicated. The Supreme Court vacancy, on the other hand, has been top of mind. Some Senate Democrats have privately conceded that they expect Neil Gorsuch to be confirmed, taking the place of Antonin Scalia.

The bracket goes to Supreme Court nominee Neil Gorsuch.

Lower Left: Debt Ceiling v. Government Shutdown

Toward the end of the summer, the Treasury Department will have exhausted all “extraordinary measures” to continue paying the government’s bills. Once again, Congress will need to raise the debt ceiling. This close-to-annual exercise used to be non-controversial. But not anymore. This is an opportunity for Congress to discuss fiscal policy.

Another opportunity to discuss fiscal policy is the expiration of the Continuing Resolution on April 28th. In the past, government shutdowns have been threatened/executed, putting continued funding of the government at risk. Given that both Houses of Congress and the president are from the same party, it doesn’t seem likely that shutting down the government is an option. That being said, crazier things have happened in Washington.

Due to timing, debt ceiling wins by a single foul shot.

Upper Right: Taxes vs. Immigration

Tax reform, a priority of both the president and the Congress, is long overdue. In fact, comprehensive tax reform has not been successful since 1986. But don’t look for action overnight. Congressional Republicans are suggesting it will be undertaken sometime this fall.

On the other hand, immigration is even more contentious and bipartisan reform plans were last successful in 1996 under President Clinton. Since then, although there have been many efforts, reform has been elusive.

Tax wins this round.

Upper Right: Defense Spending vs. Infrastructure

Appropriators are currently preparing a special supplemental funding bill for the Defense Department and President Trump announced he would like to add $54 billion to the defense budget. The infrastructure bill hasn’t gained as much traction as the rhetoric about its importance.

Defense spending wins this round.

Lower right: FY17 Omnibus Appropriations vs. NDAA

The National Defense Authorization Act has a 55-year history of being signed into law each year. It is considered in Congress a “must pass” bill. Omnibus appropriations that combine multiple appropriations into a single bill have a spotty record at best. While Omnibus appropriations passed in Fiscal Year 2016, it is still unclear how the rest of FY17 will be funded. Because no one is quite sure, we declare NDAA the winner.

NDAA wins this round.

Lower right: Spending Cuts vs. Elimination of a Federal Agency

President Trump made a campaign promise to significantly decrease agency spending and is expected to propose major cuts in the FY2018 budget. Although eliminating agencies is possible, it is easier to starve an agency than eliminate it altogether.

Spending cuts win this round.

The Elite Eight issues that we predict will prevail to the next round in Washington are:

  • Regulatory Reform
  • Healthcare
  • Supreme Court Appointment
  • Debt Ceiling
  • Tax
  • Defense spending
  • NDAA
  • Spending Cuts

In Washington policy circles, representing women-owned businesses is often like rooting for the underdog. Women across the country who have joined our voice often end up winning the policy fight even though they are dismissed in the “first round.” But collectively, we can end up being the winners who bring home the victory. Not just for us, but for those who have come before us and those that are coming behind us.

Which issues do you think will score over the coming month? Tweet at us @WIPPWeDecide #DCelite8 with your predictions for the Final Policy Four.

Executive Order Bonanza has Implications for Business

By Ann Sullivan, WIPP Chief Advocate

President Trump will complete only his third full week on Friday and has already left a lasting mark on how small businesses and government itself work with 20 Executive Orders. Through a series of presidential actions, Mr. Trump has touched on topics ranging from Immigration to healthcare. It’s time we took a deeper dive into what’s come down the pipeline and how it affects the small business community. Read the blog here.

The domestic policy action that was signed in the presence of a number of small businesses, is the “Two-for-One” Executive Order.

Here’s the rundown. The Executive Order has two parts – one aimed at Fiscal Year 2017 and one for Fiscal Year 2018:

  • FY17: “1 in and 2 out.” If a federal agency proposes a new regulation, it must recommend two regulations to the Office of Management and Budget (OMB) to be terminated. OMB, not the agency will have the final word on which regulations are eliminated.
  • FY18 and subsequent fiscal years: Agencies are ordered to offset costs of new regulations and the OMB is ordered to create a budget that limits how much a new regulation can rise.

On its face, this Executive Order spells relief for lenders and small businesses but there are a raft of unknowns still to be resolved. One question is when this directive will be implemented. For example, the administration’s OMB Director-designate Congressman Mick Mulvaney is undergoing a tough confirmation process and the timeline for his confirmation by the full Senate is still unclear.

Executive Orders generally provide broad guidelines rather than detailed plans on its execution. Questions to be answered are: What actually constitutes a “regulation?” Is it simply a single rule or a whole host of interwoven regulations that, together, provide guidance for an agency on an individual program or policy? What constitutes a “cost?” Will the benefit in a cost-benefit analysis be considered or will the analysis include only the cost? OMB is stocked with experts so we anticipate much more clarity on this as soon as the OMB director is confirmed.

Now, on to more straightforward presidential actions regarding President Trump’s infrastructure plans. One such action expedites environmental review and approval for high priority infrastructure projects and gives any Cabinet member or governor the unilateral ability to designate a project as “high priority” thus shortening the approval process, laid out in the NEPA law. He’s also issued a “Build the Wall” action which orders the Department of Homeland Security to begin building a wall along the U.S. and Mexico border using existing funds. It also authorizes the hiring of 5,000 new border agents. Congress will have to appropriate additional funds for completion because the current budget does not have funding for this project.

Additionally, there were two more Executive Orders issued almost immediately upon President Trump’s inauguration. One of the first actions signed by President Trump was an Executive Order that begins the process of repealing Obamacare. While it does not directly repeal the law, it directs federal agencies to give states, insurance companies and consumers maximum flexibility in complying with Obamacare until such a time as it is repealed. Full repeal and/or replace is going to take an act of Congress which has been openly wrangling with itself on whether to repeal, repeal and replace, or to “repair” the existing law. Regardless, this presidential action starts the ball rolling with respect to repeal of Obamacare while Congress considers its course of action.

The other significant action taken by the president instituted a federal agency-wide hiring freeze on all existing and open positions with exceptions for national security, military, and public safety.  The president intends this as a stopgap and allows agencies to reallocate to prevent public safety and national security from being adversely affected. The kicker, however, is that the memorandum explicitly prevents the hiring of outside contractors to prevent the circumvention of the spirit of the order. Given the number of waivers and exceptions allowed, it’s not altogether clear how this will work in practice, but it certainly lays down a marker that the president is serious about reining in the growth of the federal government.

Finally, on Feb. 3, the president signed two Executive Orders aimed at decreasing regulations for the financial industry; the first calling for a review and the scaling back of existing financial laws, including Dodd-Frank, and the second halting the implementation of the Department of Labor’s (DOL) fiduciary rule, which was set to go into effect this April.

Dodd-Frank, enacted after the 2008 meltdown, was responsible for creating more stringent rules regarding bank capitalization, increasing compliance and reporting standards for banks, introducing stricter mortgage requirements, creating the Financial Stability Oversight Council and the Consumer Financial Protection Bureau, and curbing excessive risk-taking and the existence of too-big-to-fail institutions on Wall Street. Mr. Trump’s action on Dodd-Frank requires regulators to produce a study on financial rules within 120 days—appearing as more of a demand for a review than a complete dismantling of the law.

The fiduciary rule was intended to prevent consumers from receiving conflicted advice when it comes to retirement savings. The president’s order calls for the DOL to examine the rule to determine whether it may lead to the unintended consequence of making it more difficult for advisors to provide financial advice to their clients. However, embraced by much of the financial industry, this order is expected to move quickly compared to the order on Dodd-Frank.

These Executive Actions have the potential to clear the way for even greater gains by women-owned small business moving forward. As we reach for new heights in 2017, WIPP will be fully engaged with the Congress and administration to ensure that burdensome regulations harming the growth of women-owned small business are eliminated and we continue to be the robust engine powering the small business economy.

Reimagining Health Care

By Ann Sullivan, WIPP Chief Advocate

Affordability, predictability, and flexibility were three themes reiterated at the Feb. 7 hearing held by the House Committee on Small Business entitled “Reimagining the Health Care Marketplace for America’s Small Business.” It was held for the purpose of taking a look at the current marketplace and its recent difficulties, and to explore options to improve access, affordability, and consistency.

While no clear legislative path has yet been paved, many facts, figures, and ideas were floated around regarding how to ensure that small business is not an afterthought in the revamping of the healthcare system. Solutions presented and discussed at the hearing included tax credits for small business, across state line coverage, and Health Savings Accounts and Health Reimbursement Arrangements.

Here is more about the items discussed.

  • Tax credits for the self-employed: As the Tax Code currently stands, self-employed individuals are restricted from deducting their health insurance premiums. Small, self-employed business owners end up paying more for health insurance because their premiums are not treated the same for taxes as other businesses.

Leveling the playing field by giving these small businesses tax credits would improve affordability for small business owners, as well as expand the pool of coverage, according to Keith Hall of the National Association of the Self-Employed (NASE).

  • Across state line coverage: The number of insurers participating in the marketplace varies widely from state to state, as do the number of coverage plans. The lack of competition among insurers in the current exchanges decreases pressure to keep costs down.

Mr. Hall of the NASE believes that allowing for the sale of health insurance across state lines will boost competition, driving costs down. In order for this to happen, Congress will have to enact a health plan that will modify the existing law that inhibits the sale of health insurance across state lines.

  • Health Savings Accounts (HSAs) and Health Reimbursement Arrangements (HRAs): A provision of a law signed into Congress last session allows small employers with fewer than 50 full-time employees that do not offer a group health plan to fund employee HRAs to pay for qualified out-of-pocket medical expenses and for non-group plan health insurance premiums, including plans purchased on the public health care exchanges.

Allowing small businesses to offer a bare bones plan and HSAs would allow individuals to decide the best choice for themselves and their families, according to Tom Secor of Durable Corporation, who testified on behalf of the National Small Business Association (NSBA).

This hearing was the first of a continuing series that will take place on the discussion of healthcare repeal and replacement. To read full written testimony from each witness here.

Senate Begins Process to Repeal Obamacare

By Ann Sullivan, WIPP Chief Advocate

The 115th Congress is already at work and taking votes that impact women business owners. The Senate voted 51 to 48 early Thursday to approve a budget resolution that instructs Congressional committees to begin work on legislation repealing major portions of the Affordable Care Act.

Senator Rand Paul was the lone Republican “no” vote and Republicans defeated Democratic amendments defending popular portions of the ACA, including expanded Medicaid and Medicare and allowing kids to stay on their parents’ insurance until they’re 26.

The House is expected to take up the resolution this week, though debate may extend into the weekend.

WIPP will work with Congress to ensure that whatever changes are implemented address accessibility and affordability—issues that have plagued the small business market.

WIPP will stay on top of legislative developments like this in 2017 to make sure you have the latest information you need.

HRAs Back in Time for the New Year

Tucked deep within the 824-page “21st Century Cures” legislation passed this week, was a major victory for Women Impacting Public Policy and entrepreneurs nationwide. The bill, on its way to the President for his signature will allow for the return of Health Reimbursement Arrangements, or “HRAs”, a small business-friendly way to offer health benefits.

In short, HRAs offer business owners an easy and tax-friendly way to subsidize employee medical costs, including insurance premiums. For example, a business owner could offer $200 a month to employees toward their individual premiums instead of providing health insurance through a company plan.

In practice, employees shop for plans in the individual market, finding what best fits their needs and budget. The business reimburses employees for some or that entire premium. This was a popular method for small businesses for which company-wide insurance plans were prohibitively costly.

The Affordable Care Act, however, and its interpretation by the IRS created stiff penalties (up to $500,000) for businesses using this method to offer a health benefit. This legislation reverses that interpretation, making clear that such plans are acceptable, penalty free.

Employers can now offer up to $4,950 per employee per year ($10,000 for employees with dependents) and employees must show they used funds on medical purposes, including premiums. Companies must have 50 or fewer employees and must offer the benefit to all employees to be eligible.

WIPP has long advocated a fix to this unintended consequence and took the lead in pressing Health and Human Services Secretary Sylvia Burwell to provide temporary relief last year.

John Stanford, WIPP Government Relations

Keep It Simple, Silly

By John Stanford, WIPP Government Relations

 

hc - wippIt’s a favorite phrase of my boss – and WIPP’s Chief Advocate – Ann Sullivan. The idea is nothing new: a simple solution is usually the best. That is why, for years, women business owners used the simplest possible idea for providing health benefits – you (employee) go out and get your own insurance and I (employer) will reimburse you. Simple, right?

They are called Healthcare Reimbursement Arrangements, or HRAs, and bringing them back (for the second time) is one of WIPP’s top healthcare priorities. We are making great progress. The House Ways and Means Committee approved legislation that would allow HRAs to be used for firms with fewer than 50 employees. The House as a whole is expected to vote on the bill next week.

The bill would allow employers to reimburse employees for qualified medical expenses like premiums and out-of-pocket costs. Importantly, employers must offer it to all eligible employees and cannot offer a separate group plan. The reimbursement is capped at around $5,000 for an individual and $10,000 for families and does not count as employee income (meaning no taxes!).

Again, the idea is simple. Employers select an amount to reimburse employees, instead of locking in an insurance plan that may not fit their employees or their budget. But why did we lose HRAs in the first place? That is not so simple.

The Affordable Care Act eliminated caps on health insurance plans—an undoubtedly good thing for when disaster or disease strikes. But, in the opinion of the IRS, these HRAs, by definition, had a cap (however much the employer contributed). So they were outlawed in 2013 or 2014.

2013 or 2014 is a strange way to describe when the IRS banned a certain healthcare plan. But that is what it was – the IRS notices on the issue were so confusing they had to issue additional regulations three times. Policy wonks, insurers, and healthcare consultants were unsure – let alone business owners – about whether they were allowed. And making a mistake on this carries severe penalties; offering a non-conforming plan can trigger a penalty of $100 per day per employee –more than $350,000 a year for a company with 10 employees.

Because of this confusion, WIPP stepped in asking Secretary Burwell to intervene on behalf of women business owners. She did and HRAs were allowed through June 2015. Legislation is needed to bring them back permanently and WIPP is optimistic Democrats and Republicans can work together, as they already have, to get this done. After all, ten million women business owners and their nearly nine million employees are pretty active voters.

It’s pretty simple.

More on how WIPP is working with Congress and the Administration to bring competitively-priced and accessible health options to women business owners is in our blog, Making the Affordable Care Act Work.

 

 

 

 

 

Open Enrollment for 2016 Health Insurance Marketplace Begins

It’s time to get covered!  HCgov stock imageryMillions of Americans count on HealthCare.gov for quality and affordable health coverage. If you or someone you care about needs health insurance, you should know that Open Enrollment for 2016 coverage runs from November 1, 2015 through January 31, 2016.

Learn about options available in your area by visiting HealthCare.gov or call 1-800-318-2596.

Key Dates and Deadlines

  • November 1, 2015: Open Enrollment for 2016 Marketplace coverage begins.
  • December 15, 2015: Deadline to enroll for coverage starting January 1, 2016.
  • January 15, 2016: Deadline to enroll for coverage starting February 1, 2016.
  • January 31, 2016: Last day of Open Enrollment for 2016 Marketplace coverage.

Helpful Resources for Business Owners & the Self-Employed

New IRS Resource helps Employers Understand the Health Care Law

Healthcare taxThe new ACA Information Center for Applicable Large Employers page on IRS.gov features information and resources for employers of all sizes on how the health care law may affect them if they fit the definition of an applicable large employer (ALE).

Although the vast majority of employers will not be affected, you should determine if you are an applicable large employer.  If you averaged at least 50 full-time employees, including full-time equivalent employees, during 2014, you are most likely an ALE for 2015.  If you have fewer than 50 full-time employees, you may be considered an applicable large employer if you share a common ownership with other employers. As an applicable large employer, you should be taking steps now to prepare for the coming filing season.

The web page includes the following sections:

  • What’s Trending for ALEs,
  • How to Determine if You are an ALE,
  • Resources for Applicable Large Employers, and
  • Outreach Materials.

Visitors to the new page will find links to:

  • Detailed information about tax provisions including information reporting requirements for employers,
  • Questions and answers, and
  • Forms, instructions, publications, health care tax tips, flyers and videos.

In 2016, applicable large employers must file an annual information return – and provide a statement to each full-time employee – reporting whether they offered health insurance, and if so, what insurance they offered their employees. 

If you will file 250 or more information returns for 2015, you must file the returns electronically through the ACA Information Reports system.  You should review draft Publication 5165, Guide for Electronically Filing Affordable Care Act (ACA) Information Returns, now for information on the communication procedures, transmission formats, business rules and validation procedures for returns that you must transmit in 2016.

Visit the IRS’s new ACA Information Center for Applicable Large Employers resource page for more helpful information.

How PPACA Will Affect Your Business The Next 5 Years?

Tod Covert  By Todd Covert, Executive Vice President of ACA Track

The Patient Protection and Affordable Care Act (PPACA) – also known as the Affordable Care Act or ACA – is the landmark health reform legislation passed by the 111th Congress and signed into law by President Barack Obama in March 2010. The legislation includes a long list of health-related provisions that began taking effect in 2010 and will “continue to be rolled out over the next four years.” Key provisions are intended to extend coverage to millions of uninsured Americans, to implement measures that will lower health care costs and improve system efficiency, and to eliminate industry practices that include rescission and denial of coverage due to pre-existing.

What does it mean for business today?

Business With 50-99 Employees 2015

Key Point #1

Navigating through transition relief to determine the date you need to make sure you are in compliance.

Applicable large employers (ALEs) with fewer than 100 full-time employees, including full-time equivalent employees, may have until 2016 to offer health insurance to eligible employees and their dependents without facing penalties.

This transition relief is available to employers who can certify that they have not reduced their workforce to remain under the threshold and have not materially reduced or eliminated health coverage previously offered. This certification needs to be included with your filing under Section 6056 for 2015.

The IRS will still grant transition relief to employers who reduced their workforce for “bona fide” business reasons.

Key Point #2

If you are over 50 FTE (Full-Time Equivalents) or part of a control group (Parent Company) with more than 50 FTE than you MUST file the 1095-C and 1094-C even if you do not offer coverage.

Key Point #3

Don’t “expect” your payroll company to complete these 1094-C and 1095-C forms.

Why?  Most payroll companies don’t even track the information required to complete these new IRS forms—It is more a benefit enrollment and plan design function than payroll.

  1. Dates of hire and waiting periods determine when employees are in the limited assessment period. Partial months are treated uniquely differently than full months and the series coded will change. Most payroll vendors only track deductions.
  1. Termination, rehire dates and class changes impact offer of coverage and safe harbor designations. Employees with a number of changes during the year can see a variety of different codes appearing on form 1095. Not a payroll function
  1. Offer of coverage determines whether 70% (2015) and 95% (2016) levels are reached or significant penalties are to be paid. Not a payroll function
  1. Safe harbor designations and income drive affordability calculations. Not a payroll function
  1. Transition relief provides the ability to mitigate risk and avoid penalties altogether.  Not a payroll function

Key Point #4

Start balancing culture and cost now because the “Cadillac Tax” is on the horizon in 2018—It’s not a matter of “IF” we hit the Cadillac Tax it’s a matter of “When” we hit the Cadillac Tax.

If health insurance exceeds $10,200 in premiums for an individual or $27,500 for a family. The tax amounts to 40 percent of the cost above that threshold AND its Non-Tax Deductible.

Why do we say “When” we hit the Cadillac Tax?  The insurance cost threshold ($10,200 in premiums for an individual or $27,500 for a family) only increases at CPI each year which is about 3.1% and Healthcare inflation increases close to 8.0% thus the X & Y axis lines are eventually going to cross.

Please join us September 29th for Women Accessing Capital: 5 Things You Need to Know About the New 1094-C and 1095-C IRS Reporting. Register now! 

Meet the World’s Youngest Self-Made Female Billionaire: Elizabeth Holmes.

by Annie Wilson, InternEH

According to Forbes, Elizabeth Holmes has been named the world’s youngest self-made female billionaire with a net worth of $4.5 billion. Earlier this month she was named as Time Magazine’s List of 100 most influential people. Her billion dollar idea?: a revolutionary way to make blood testing accessible for anybody. Holmes’ company, Theranos, created a system that brings together a minimally invasive and needle free method of blood withdrawal with hundreds of low cost tests that almost anyone could afford. Holmes’ intention is to restructure our healthcare system to be more preventative as opposed to a reactive:

“The current health care paradigm is one in which diagnosis often takes place after symptoms are already present, and diseases have begun to progress. We’re committed to changing that. We’re pioneering a new paradigm in which lab testing is accessible and affordable for everyone. When cost is no longer a consideration and people no longer have to be symptomatic in order to get a test. Meaning your patients can get the tests they need, and you can get the information you need, early and in time for therapy to be effective.” – Elizabeth Holmes, Theranos website

Holmes attended Stanford University but dropped out at the age of 19 to start Theranos in 2003. Since then, Holmes has impressed investors with the potential commercial, military, and humanitarian applications of her idea. Holmes has also acquired a very impressive board of directors, including former cabinet secretaries George Shultz, Bill Perry and Henry Kissinger, two former Senators, a retired CentCom commander, a retired Navy admiral and a former director of the Center for Disease Control and Prevention. She has rapidly developed her company since 2003 and has notably partnered with Walgreens to build thousands of Wellness Centers for Theranos to carry out its testing. To date, Theranos has also accumulated $92 million in venture capital funding from investors like Larry Ellison and Draper Fisher Jurvetson with her first venture capital funding worth $5.8 million in 2005 at the age of 21. Holmes owns 84 patents to her name and Theranos is estimated to be worth $9 billion with Holmes owning half of its stock.

If you want to learn more about Elizabeth Holmes:

  • Click here for a video about how she came up with her business idea.
  • Click here for a timeline of Theranos’ conception
  • Click here to watch a TED Talk given by Holmes about the importance of early detection