November 1, 2007
SCHIP negotiations | $500 FSA carry-over legislation | Expanded COBRA subsidy
Legislation updates provided by Rob Smith, Ceridian manager of Government Relations
SCHIP negotiations continue
$500 FSA carry-forward legislation introduced
House votes to expand COBRA subsidy for dislocated workers
SCHIP negotiations continue
The already politically contentious SCHIP debate took another turn on November 1, when the Senate approved legislation to reauthorize the program. The House passed the legislation last week, but the bill must be signed by President Bush before it can become law. Congress is under a tight deadline as the current funding authorization for the program is set to expire on November 16.
President Bush earlier this year vetoed similar legislation to reauthorize SCHIP, a federal program which provides grants to states to provide health insurance coverage for families that make too much money to qualify for Medicaid, stating that he believes the Democratic Congress's measure goes beyond the original intent of the program.
Of particular note to employers is a little-known provision in the legislation which, if enacted, would require businesses to report to the state cost and benefits information regarding their health plans in states that offer premium subsidies to SCHIP beneficiaries to help them purchase employer-based coverage. Employers would also be required to notify all employees that the state offers premium subsidies for eligible individuals.
The bill would also increase SCHIP funding by $35 billion over the next five years, bringing the total funding to $60 billion. States would receive funding for programs that cover children in families who make up to 300 percent of the federal poverty level ($51,510 for a family of three), and the Social Security Administration would be required to verify the names, Social Security numbers and places of birth of enrollees and applicants.
President Bush is expected to veto this version of the legislation, as well, but members of the Senate Finance Committee are meeting with House Republicans this week in an attempt to craft compromise legislation that could be passed by both the House and Senate with two-thirds, veto-proof majorities. If this group is unable to come to a consensus, Congress will likely pass a budgetary continuing resolution to allow the SCHIP program to operate into next year.
$500 FSA carry-forward legislation introduced
A bipartisan group of House members introduced legislation to allow for a $500 per year rollover in FSA accounts.
This legislation is somewhat different than other carry-forward proposals because it would sunset after 3 years, which will keep the bill's cost down to roughly $3 billion. Cost has been the major obstacle to past efforts to change the "use-it-or-lose-it" rule, so the sunset provision could be key. The bill already has a strong bipartisan list of cosponsors, and we expect it to pick up more support in the coming months.
Each year, FSA holders forfeit roughly $1 billion in unspent funds under the "use-it-or-lose-it" rule, which significantly affects FSA enrollment. Congress is long overdue to change this rule.
House votes to expand COBRA subsidy for dislocated workers
The U.S. House of Representatives in October approved new legislation to revise and extend the Trade Adjustment Assistance program's COBRA tax subsidy for trade-displaced workers. The bill would increase the present tax credit from 65 percent to 85 percent and speed up the bureaucratic certification process.
The new legislation contains a special provision, significant for Ceridian Benefits Services, that would allow the trade-displaced unemployed who are aged 55 and over to remain on COBRA until they are eligible for Medicare. This provision means that in many cases individuals would remain on COBRA for up to 10 years as opposed to the current eligibility limit of 18 months for most continuants.
While the House of Representatives handily OK'd the new measure, its prospects in the U.S. Senate are uncertain. One reason is that President Bush has issued a veto threat, claiming the bill would be too costly and would make illegal aliens eligible for aid. In addition, some senators believe 10-year COBRA eligibility would dramatically alter both TAA and the COBRA program in unacceptable ways.
There was some hope in the business community, however, that the Bush Administration and the Democratically-controlled Congress would fashion a "grand bargain" under which Republicans would swallow expanded TAA and COBRA in exchange for approval of several stalled Free Trade Agreements.
Legislation updates provided by Rob Smith, Ceridian manager of Government Relations
SCHIP negotiations continue
$500 FSA carry-forward legislation introduced
House votes to expand COBRA subsidy for dislocated workers
SCHIP negotiations continue
The already politically contentious SCHIP debate took another turn on November 1, when the Senate approved legislation to reauthorize the program. The House passed the legislation last week, but the bill must be signed by President Bush before it can become law. Congress is under a tight deadline as the current funding authorization for the program is set to expire on November 16.
President Bush earlier this year vetoed similar legislation to reauthorize SCHIP, a federal program which provides grants to states to provide health insurance coverage for families that make too much money to qualify for Medicaid, stating that he believes the Democratic Congress's measure goes beyond the original intent of the program.
Of particular note to employers is a little-known provision in the legislation which, if enacted, would require businesses to report to the state cost and benefits information regarding their health plans in states that offer premium subsidies to SCHIP beneficiaries to help them purchase employer-based coverage. Employers would also be required to notify all employees that the state offers premium subsidies for eligible individuals.
The bill would also increase SCHIP funding by $35 billion over the next five years, bringing the total funding to $60 billion. States would receive funding for programs that cover children in families who make up to 300 percent of the federal poverty level ($51,510 for a family of three), and the Social Security Administration would be required to verify the names, Social Security numbers and places of birth of enrollees and applicants.
President Bush is expected to veto this version of the legislation, as well, but members of the Senate Finance Committee are meeting with House Republicans this week in an attempt to craft compromise legislation that could be passed by both the House and Senate with two-thirds, veto-proof majorities. If this group is unable to come to a consensus, Congress will likely pass a budgetary continuing resolution to allow the SCHIP program to operate into next year.
$500 FSA carry-forward legislation introduced
A bipartisan group of House members introduced legislation to allow for a $500 per year rollover in FSA accounts.
This legislation is somewhat different than other carry-forward proposals because it would sunset after 3 years, which will keep the bill's cost down to roughly $3 billion. Cost has been the major obstacle to past efforts to change the "use-it-or-lose-it" rule, so the sunset provision could be key. The bill already has a strong bipartisan list of cosponsors, and we expect it to pick up more support in the coming months.
Each year, FSA holders forfeit roughly $1 billion in unspent funds under the "use-it-or-lose-it" rule, which significantly affects FSA enrollment. Congress is long overdue to change this rule.
House votes to expand COBRA subsidy for dislocated workers
The U.S. House of Representatives in October approved new legislation to revise and extend the Trade Adjustment Assistance program's COBRA tax subsidy for trade-displaced workers. The bill would increase the present tax credit from 65 percent to 85 percent and speed up the bureaucratic certification process.
The new legislation contains a special provision, significant for Ceridian Benefits Services, that would allow the trade-displaced unemployed who are aged 55 and over to remain on COBRA until they are eligible for Medicare. This provision means that in many cases individuals would remain on COBRA for up to 10 years as opposed to the current eligibility limit of 18 months for most continuants.
While the House of Representatives handily OK'd the new measure, its prospects in the U.S. Senate are uncertain. One reason is that President Bush has issued a veto threat, claiming the bill would be too costly and would make illegal aliens eligible for aid. In addition, some senators believe 10-year COBRA eligibility would dramatically alter both TAA and the COBRA program in unacceptable ways.
There was some hope in the business community, however, that the Bush Administration and the Democratically-controlled Congress would fashion a "grand bargain" under which Republicans would swallow expanded TAA and COBRA in exchange for approval of several stalled Free Trade Agreements.
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