Wednesday, July 31, 2013

How You Could Still Owe An Employer Mandate Fine Despite the "Suspension"

This is from John Graham, a Chartered Alternative Investment Analyst (CAIA) who has completed all three levels of the Chartered Financial Analyst (CFA) program writing Obamacare's Employer Mandate Delay Creates Two Big Problems at Forbes

[E]mployers need to be aware that they are offered only “transition relief” for next year. IRS Notice 2013-45 states that employers are “encouraged to voluntarily comply with the information reporting provisions for 2014.” Although political analysis suggests that the “relief” will roll over to future years, the Notice waives only reporting requirements. Treasury cannot waive the actual tax.

As a result, there may be little relief even from “red tape”. Will auditors grant relief from reporting a tax liability to businesses which owe the tax in 2014? This should be a topic of intense discussion within the accounting profession. If the profession sticks to the letter of the law, auditors will demand that businesses prepare good-faith calculations of taxes due to the employer mandate, and not to write them off until legislation really “fixes” the problem. This should concern not only small business, but large businesses with low-wage hourly workers or franchisees.

Look out below! Work more, get less in Obamacare 'cliff'

This is from Dan Mangan writing at CNBC

Be careful you don't fall off the Obamacare "cliff" when the boss asks you to put in some overtime.

Working more could ultimately mean thousands of dollars less for you under a quirk in the new healthcare law going into effect this fall. This could prompt some people to cut back on their hours to avoid losing money.

"Working more can actually leave you worse off," the price-comparison site notes in a new analysis.

"It's sort of an absurd scenario," said Jonathan Wu,'s co-founder. "It's something for people to be aware of."

In that scenario, an individual or family whose annual income surpasses maximums set by the federal government—if only by $1—will totally lose subsidies available to buy health insurance under the Affordable Care Act.

The loss of those subsidies in some cases will mean that people potentially would have been better off financially if they had worked less during the year, Wu said. And they then would have to work significantly more to make up for the lost subsidy.

"I think they'd be surprised to see how drastic it is," said Wu. "I'd be kind of shocked to see if I make $100 less (in total income each year), I get all these benefits, but if I make $100 more, I get nothing."

"You basically don't want to fall in that hole," said Wu, adding that he believed contractors and others with more control over their incomes would be apt to adjust their hours worked to avoid the subsidy cliff.

He also said that because of lower insurance premiums often offered younger people, the effect will more likely be seen by older people. But "you will see it across all age groups" in the seven states including New York and Vermont where insurance premiums are either barred from being affected by age, or restricted from being dramatically affected, he said.

Under the ACA, federal subsidies in the form of tax credits to buy insurance on new state health insurance exchanges will be available to millions of people who can start enrolling on those exchanges Oct. 1. The subsidies are available to people or families whose incomes total 400 percent above the federal poverty level or less, and are designed to cap their insurance premiums at 9.5 percent of their total income.

Doing the math

For a single person, that FPL income maximum is $45,960 per year. The maximums are adjusted upward for couples and families until maxing out at $94,200 for a family of four.

Under a scenario that identified, a couple in Ohio, both age 50, would be eligible for subsidies worth $3,452 to purchase a so-called silver insurance plan—a moderately priced level of benefits under the ACA's scheme—that costs $9,346 annually if they made up to $62,040 per year.

But if they made just $1 more than that, they would lose the subsidy. Wu noted that the couple then would have to earn at least $65,492 to make up for the lost subsidy.

Maximum income levels for Obamacare insurance subsidies, and premium maximums

Household Size400% FPLPremium Cap
1 (Single)$45,960$4,366
2 (Couple)$62,040$5,893

In New York, a family of three whose annual income totals $78,120, would pay $12,784 for the second-lower-priced silver plan on that state's insurance exchange. After getting a $5,363 tax credit, the family's net cost for the insurance would be $7,421.

But if the family earned even slightly more than $78,120, they would have to pay the entire $12,784 for the insurance because they then wouldn't qualify for the subsidy.

To make up for that, the family's annual income would have to reach $83,483, Wu said.

The age effect

The stark effect of peoples' age in determining their risk from the subsidy cliff is seen in two examples from Connecticut.

There, Wu said, a 27-year-old single man would pay $3,636 annually for the second-cheapest silver plan—less than the $4,366 cap on insurance premiums for individuals earning $45,960 or less annually. That person would not be eligible for subsidies, and thus would see no disincentive in working more hours.

But the annual premiums for a 50-year-old Connecticut couple buying that plan would be $12,468. If their combined incomes were $62,040 or less, they would receive $6,575 in subsidies to offset the cost.

However, if their income was more than that, they would lose the subsidies, leaving them out of pocket $6,575. They then would have to earn at least $68,615 to make up for that lost subsidy, Wu said.

Employer Mandate Delay Will Cost $12 Billion and Affect 1 Million Workers

This is David Morgan writing for Reuters:

President Barack Obama's decision to delay implementation of part of his healthcare reform law will cost $12 billion and leave a million fewer Americans with employer-sponsored health insurance in 2014, congressional researchers said Tuesday.

The report by the non-partisan Congressional Budget Office is the first authoritative estimate of the human and fiscal cost from the administration's unexpected one-year delay announced July 2 of the employer mandate - a requirement for larger businesses to provide health coverage for their workers or pay a penaty.

The analysts said the delay will add to the cost of "Obamacare's" insurance-coverage provisions over the next 10 years. Penalties paid by employers would be lower and more individuals who otherwise might have had employer coverage will need federal insurance subsidies.

"Of those who would otherwise have obtained employment-based coverage, roughly half will be uninsured (in 2014)," CBO said in a July 30 letter to Representative Paul Ryan, Republican chairman of the House of Representatives Budget Committee....

The delay intensified doubts about the administration's ability to implement Obama's signature domestic policy achievement and stirred Republican calls for a similar delay in another Obamacare mandate that requires most individuals to have health insurance in 2014....

[T]he change will ... result in a $10 billion reduction in penalty payments that some employers would have made in 2015 for failing to provide coverage next year, CBO said.

The change also means another $3 billion in added costs for exchange subsidies. That is because about half of the 1 million workers who would have gained employer-sponsored coverage next year will now obtain insurance through the exchanges or via public programs including Medicaid, CBO said.

Other changes, including an increase in taxable compensation resulting from fewer people enrolling in employment-based coverage, will offset those factors by about $1 billion.... 

Tuesday, July 30, 2013

Detroit Teaches Us How All Ponzi Schemes (and California) Will End

...[W]hen governments promise benefits they are unwilling to pay for, the system can very quickly come to resemble something designed by Bernie Madoff. Like many other cities around the country, Detroit promised policemen, firemen, teachers and other public employees pension and post-retirement health care benefits, but was unwilling to set aside the money needed to fund those benefits.

The city attracted workers with total compensation package that included current wages and future benefits. Since the future benefits were substantially unfunded, they can be paid only if future taxpayers pay them. But the future taxpayers never agreed to this deal. If they do pay, they will be paying for services delivered in the past. If they don’t pay, they won’t have to sacrifice any current city services.

So guess what? The future taxpayers have flown the coop. Louis Woodhill summarized the situation in a column for Forbes:

Detroit’s bankruptcy filing lists about $18.25 billion worth of debt. This amounts to $26,838 for each person still living in Detroit, which is equal to an unsupportable 176% of annual per capita income.

Slightly more than half of Detroit’s debts ($9.20 billion) represent the unfunded liabilities of the city’s retirement benefit plans, including both pensions and other post-employment benefits.

Now here is something interesting. Did you know that it is illegal under federal law for a private corporation to do what Detroit did? Any private company setting up a defined-benefit pension plan is required by law to fund that plan each and every year. Defined-benefit plans are plans that promise a specific pension benefit during the years of retirement, such as 60 percent of final pay. They are to be distinguished from defined-contribution plans, such as 401(k) plans, that are always funded because the employee is only entitled to whatever is in the account.

The only private companies with large unfunded pension benefits today are ones that were grandfathered years ago when the current pension regulations were put in place. No new pension plan can promise benefits and refuse to set aside funds to pay for those benefits....

So here is the obvious public policy question: why do we let cities and towns all across America do what is illegal for private companies to do? That the public sector has been irresponsible is patently obvious....

As the unfunded liability for a city rises, it can fall into a death spiral. The city initially raises taxes to pay for its promises. In response, the private sector contracts as individuals and businesses move to less burdensome locales. The more people there are who leave, the higher the rates have to be. Meanwhile, the quality of the city services declines as more of the city’s revenues are used to pay for retirement benefits instead. That in turn encouages even greater exodus of the people and businesses that form the tax base. As the Wall Street Journal explained:

For years Detroit has been gutting services and sucking taxpayers dry to finance retirement and debt obligations. Nearly 70% of parks have been closed since 2008, and four in 10 street lights don’t work. The city has cut its police force by 40% in a decade. Response times are five times longer than the national average, and it has one of the highest violent crime rates in the country.

Meanwhile, Detroit residents pay the highest property and income taxes in the state. Last year its business tax doubled. About 40% of revenues go toward retirement benefits and debt, much of which was issued in the last 10 years to finance pension contributions. Payments on $1.6 billion of pension-related certificates of participation consume nearly every dollar of property tax revenue.

The lesson for the rest of us should be clear. It really doesn’t matter whether public employees are under-paid or over-paid. What matters is that city government pay for whatever they promise at the time the promise is made and do not try to shift those costs to future taxpayers.

Put differently, government at all levels (including the federal government) should have to play by the same rules that govern the private sector. 

Via Dr. John Goodman writing Detroit Is A Dying Example Of How All Ponzi Schemes End at Forbes.  

Congress Horrified at Prospect of Being Forced into ObamaCare Exchanges

As President Obama barnstorms the country promoting his health care law, one audience very close to home is growing increasingly anxious about the financial implications of the new coverage: members of Congress and their personal staffs.

Under a wrinkle that dates back to enactment of the law, members of Congress and thousands of their aides are required to get their coverage through new state-based markets known as insurance exchanges. ...

In battles over the health care law in 2009-10, Republicans proposed a requirement for lawmakers and aides to join the exchanges, and Democrats accepted it. 

Senator Charles E. Grassley, Republican of Iowa, who proposed an early version of the idea, said he wanted to make sure that “members of Congress and Congressional staff get their employer-based health insurance through the same exchanges as our constituents.”

It has been a headache for many in Congress ever since. ...

[A] House Democrat, speaking on condition of anonymity, said, “This was a stupid provision that never should have gotten into the law.”...

I guess stupid ideas are okay for the American people - just not for congress.   

Monday, July 29, 2013

New Rule Poses Challenge for Wellness Programs

Employers must offer other ways for workers to get rewards if they can’t meet health goals

By Dorsey Kinder  | Sacramento Business Journal

Regulations recently released by the Obama administration could make it more difficult for companies to offer wellness programs that financially reward employees for meeting specified health goals such as quitting smoking or losing weight.

Beginning Jan. 1, employers are required to offer alternative ways employees can earn the incentive if they feel they can’t meet the goal.

For example, an employee who cannot reach a goal for lowering her cholesterol but is managing it correctly with a doctor’s guidance could still be eligible for incentives through an alternative program.

The new regulations, issued under the Affordable Care Act by the U.S. departments of Health and Human Services, Labor and Treasury, clarify what can and can’t be done with “outcome-based” wellness programs. So-called participation-based programs that offer health seminars or fitness-club memberships aren’t affected.

The goal of requiring employers to provide a “reasonable alternative standard” for earning an incentive is to ensure the program is not simply a subterfuge to reduce benefits based on health status. But some are asking if it goes too far.

“You have this really interesting dichotomy where the Obama administration is saying they believe in wellness programs and want to encourage their use,” said [Sacramento]-based insurance consultant Craig Gottwals, who also works as a broker for San Jose-based BB&T/Liberty Benefits Insurance Services.

“But then on the other hand they just came out with these new regulations that make it really hard for an employer to actually enforce a wellness program,” he said. “If an employee is asked to lose ‘X’ amount of weight, they can simply say they can’t or don’t want to. And you have to provide them with an alternative method to achieve that discount.”

Other, less controversial changes under the new regulations give employers more freedom to offer fiscal incentives. The maximum permissible employee discount for health behavior rises from 20 percent of an employee’s health insurance cost to 30 percent. That rises to 50 percent for programs that seek to reduce tobacco use.

All the changes considered, some people involved in the wellness program space are tepidly in favor of the new regulations.

“I applaud the Obama administration for wanting to focus on work-site wellness,” said Henry Loubet, chief strategy officer for Torrance-based Keenan, the largest privately held insurance brokerage and consulting firm in California. “By and large we look at them favorably.”

Perhaps because outcome-based programs are far less common than participation-based wellness efforts, the new regulations are stirring little concern among Sacramento-area employers.

Rancho Cordova-based Bloodsource Inc., for example, isn’t much affected by the new regulations because its reward — $20 per pay period for participating in regular biometric screenings and other health risk assessments — doesn’t require attaining a health goal.

“We don’t currently dock employees for smoking or other unhealthy behaviors,” said benefits administrator Madelyn Kalstein, who runs the program for the nonprofit, which has just under 500 employees.

The company is “still evaluating as to whether we’re going to do the ‘carrot or the stick’ approach with our employees,” she said — and the new regulations are playing a part in that discussion.

One Sacramento company that already decided against an outcome-based approach is Lionakis, a Sacramento-based architecture firm with 150 local employees and an established wellness program.

“Our wellness program is primarily a grassroots effort,” said director of human resources Susan Essaf. “We provide information and resources — we’ve never tied outcome to benefits.”

The company was influenced in part, Essaf said, by a RAND Corp. study that suggested wellness programs in general provide little benefit.

“And culture is another reason,” she said. “Given the size of our company, it didn’t balance out to administrate employee behavior to how and what they pay for benefits.”

The study in question was a Congressionally mandated report first delivered by RAND to the U.S. Department of Labor and the U.S. Department of Health and Human Services last fall.

The study found that while participation in wellness programs could be boosted by offering financial incentives, the bottom-line benefit to employers was insignificant — about $378 in direct medical costs per participating employee per year. That, the study concluded, was generally not enough to offset the cost of putting a program in place.

The federal government is not the only source of pressure on outcome-based wellness programs. California State Sen. Bill Monning, a Democrat from Monterey, is looking to put further restrictions on incentive-based programs. He is author of Senate Bill 189, which would have limited companies even further in terms of what they can and can’t do to incentivize healthy behavior. The bill was tabled in the Senate Appropriates Committee earlier this year.

“The main effort there,” he said, “was to put in some guard rails to avoid cost-shifting to employees with unhealthy behaviors and pre-existing conditions.”

The bill would not have allowed reward or penalty for wellness programs based on specific health outcomes. But it would have allowed for rewards based on participation.

Gottwals, the [Sacramento] insurance consultant, said he comes at the issue from a practical standpoint: If the latest regulations make outcome-based programs difficult and the RAND study suggests wellness programs produce little savings, why offer them at all?

The answer, he said: “In practice, employees do tend to appreciate informational programs,” he said. “But when you start bringing out the fat calipers and asking people to ride exercise bikes, they generally don’t appreciate it.”

Puget Sound Business Journal staff writer Valerie Bauman contributed to this story.

Full text and original source: The Sacramento Business Journal

Outsourced COBRA Mistake? $1.8 Million Dollar Penalty

When some employers hire a third-party administrator (TPA) to handle their COBRA paperwork, they wipe their brow and think: Whew, at least I don’t have to worry about that anymore. But as a recent court ruling revealed, that thought process couldn’t be further from reality.

The ruling to which we are referring came from the case of Pierce v. Visteon Corp., and here’s a brief background:
Visteon, a large global automotive supplier, outsourced its payroll, benefits and COBRA administration processes to a number of different TPAs. 
When employees were terminated from Visteon, those terminations were processed through an auto data feed system where that info was sent off electronically to the payroll TPA, the benefits TPA and then the COBRA TPA
Over the course of several years, many employees failed to receive their COBRA notices. 
Two of those employees initiated a class-action complaint against Visteon and, when all was said and done, 741 former workers joined the class that claimed Visteon failed to ensure its TPA provided the required COBRA qualifying event notices. 
The company tried to pin everything on its TPAs. Visteon also claimed that its TPA never notified it when COBRA notices were actually furnished, so failing to send these notices was out its control and caused by “communication glitches” among its TPAs.
Grossly negligent

A court, however, didn’t buy the argument that making sure terminated employees received COBRA notices was out of Visteon’s control.

According to the court, Visteon either willfully violated COBRA’s notice provisions or, at best, was “grossly negligent in performing its responsibilities as plan administrator.”

The court went on to cite the company’s many failings, such as:
  • lacking internal systems for tracking the status of employees
  • failing to properly oversee its TPAs, and
  • refusing to accept responsibility for the COBRA notice system.
Because of these failings, the court awarded statutory penalties of $2,500 per affected participant, which added up to $1.8 million in total penalties.

And that doesn’t include the yet-to-be determined attorney’s fees Visteon also owes.
  • Lesson: Employers need to be extremely careful when it comes to selecting a TPA for their COBRA administration, and they should closely monitor their TPAs on a regular basis.
Source and full text at

Chicago City Employees Sue to Block Shift to ObamaCare Coverage

Yet another big city has realized that it can save money by shifting retirees to Obamacare Exchanges where nearly all of those retirees will get subsidies from the federal government (as long as they make less than 4x the federal poverty level, which will cover the vast majority of retirees).  Every dollar paid for by the federal taxpayer will alleviate the burden of that over-promised city.  The latest city to announce this intention is Barack Obama's beloved Chicago, run by his good friend, Mayor Emanuel.   
Retired city workers are asking a judge to block Mayor Emanuel from making them rely on Obamacare for their health insurance....
This affects most city retirees and it underscores how, after decades of grotesque financial mismanagement, the only choices left are painful ones. A spokesman for the lawsuit was a retired cop, wounded several times in the line of duty. Public employee unions hope that angry taxpayers staring at a doubling or even tripling of City Hall's property tax will empathize with Mike Underwood. 
He moves slowly these days, in part because of arthritis he blames on being shot once and stabbed twice during 30 years as a patrol officer, but what bothers Mike Underwood the most right now is City Hall's plan to make him and his wife rely on Obamacare for health insurance. He considers it a betrayal. 
"When I was hired, we were promised by Mayor Daley, the first Mayor Daley, that we'd have health insurance for ourselves and our wives for life," Underwood says.
Full text: Reason Magazine.

I guess city retirees don't really consider the PPACA Exchanges to be real health insurance.  

Friday, July 26, 2013

IRS employee union: We don’t want Obamacare

IRS employees have a prominent role in Obamacare, but their union wants no part of the law.

National Treasury Employees Union officials are urging members to write their congressional representatives in opposition to receiving coverage through President Obama’s health care law.

The union leaders are providing members with a form letter to send to the congressmen that says “I am very concerned about legislation that has been introduced by Congressman Dave Camp to push federal employees out of the Federal Employees Health Benefits Program and into the insurance exchanges established under the Affordable Care Act.”

Full text from IRS employee union: We don’t want Obamacare | Washington Examiner. 

How Vitamins and Supplements May Increase Mortality from Cancer and Heart Disease

On October 10, 2011, researchers from the University of Minnesota found that women who took supplemental multivitamins died at rates higher than those who didn't. ...

Researchers from the Cleveland Clinic found that men who took vitamin E had an increased risk of prostate cancer. ...

These findings weren't new. Seven previous studies had already shown that vitamins increased the risk of cancer and heart disease and shortened lives. Still, in 2012, more than half of all Americans took some form of vitamin supplements. ...

In fact, they're less healthy.

In 1994, the National Cancer Institute, in collaboration with Finland's National Public Health Institute, studied 29,000 Finnish men, all long-term smokers more than fifty years old. This group was chosen because they were at high risk for cancer and heart disease. Subjects were given vitamin E, beta-carotene, both, or neither. The results were clear: those taking vitamins and supplements were more likely to die from lung cancer or heart disease than those who didn't take them--the opposite of what researchers had anticipated.

In 1996, investigators from the Fred Hutchinson Cancer Research Center, in Seattle, studied 18,000 people who, because they had been exposed to asbestos, were at increased risk of lung cancer. Again, subjects received vitamin A, beta-carotene, both, or neither. Investigators ended the study abruptly when they realized that those who took vitamins and supplements were dying from cancer and heart disease at rates 28 and 17 percent higher, respectively, than those who didn't.

In 2004, researchers from the University of Copenhagen reviewed fourteen randomized trials involving more than 170,000 people who took vitamins A, C, E, and beta-carotene to see whether antioxidants could prevent intestinal cancers. Again, antioxidants didn't live up to the hype. The authors concluded, "We could not find evidence that antioxidant supplements can prevent gastrointestinal cancers; on the contrary, they seem to increase overall mortality." When these same researchers evaluated the seven best studies, they found that death rates were 6 percent higher in those taking vitamins.

In 2005, researchers from Johns Hopkins School of Medicine evaluated nineteen studies involving more than 136,000 people and found an increased risk of death associated with supplemental vitamin E. Dr. Benjamin Caballero, director of the Center for Human Nutrition at the Johns Hopkins Bloomberg School of Public Health, said, "This reaffirms what others have said. The evidence for supplementing with any vitamin, particularly vitamin E, is just not there. This idea that people have that [vitamins] will not hurt them may not be that simple." That same year, a study published in the Journal of theAmerican Medical Association evaluated more than 9,000 people who took high-dose vitamin E to prevent cancer; those who took vitamin E were more likely to develop heart failure than those who didn't.

In 2007, researchers from the National Cancer Institute examined 11,000 men who did or didn't take multivitamins. Those who took multivitamins were twice as likely to die from advanced prostate cancer. 

In 2008, a review of all existing studies involving more than 230,000 people who did or did not receive supplemental antioxidants found that vitamins increased the risk of cancer and heart disease.

On October 10, 2011, researchers from the University of Minnesota evaluated 39,000 older women and found that those who took supplemental multivitamins, magnesium, zinc, copper, and iron died at rates higher than those who didn't. They concluded, "Based on existing evidence, we see little justification for the general and widespread use of dietary supplements."

Two days later, on October 12, researchers from the Cleveland Clinic published the results of a study of 36,000 men who took vitamin E, selenium, both, or neither. They found that those receiving vitamin E had a 17 percent greater risk of prostate cancer. In response to the study, Steven Nissen, chairman of cardiology at the Cleveland Clinic, said, "The concept of multivitamins was sold to Americans by an eager nutraceutical industry to generate profits. There was never any scientific data supporting their usage." On October 25, a headline in the Wall Street Journal asked, "Is This the End of Popping Vitamins?" Studies haven't hurt sales. In 2010, the vitamin industry grossed $28 billion, up 4.4 percent from the year before. "The thing to do with [these reports] is just ride them out," said Joseph Fortunato, chief executive of General Nutrition Centers. "We see no impact on our business."

How could this be? 

Given that free radicals clearly damage cells--and given that people who eat diets rich in substances that neutralize free radicals are healthier--why did studies of supplemental antioxidants show they were harmful? The most likely explanation is that free radicals aren't as evil as advertised. Although it's clear that free radicals can damage DNA and disrupt cell membranes, that's not always a bad thing. People need free radicals to kill bacteria and eliminate new cancer cells. But when people take large doses of antioxidants, the balance between free radical production and destruction might tip too much in one direction, causing an unnatural state in which the immune system is less able to kill harmful invaders. Researchers have called this "the antioxidant paradox." Whatever the reason, the data are clear: high doses of vitamins and supplements increase the risk of heart disease and cancer; for this reason, not a single national or international organization responsible for the public's health recommends them....

This is an excerpt from Do You Believe in Magic? The Sense and Nonsense of Alternative Medicine.  Summarized by the Atlantic

Thursday, July 25, 2013

Craig's Visit with Armstrong & Getty on 7/25/13: Prediction that the Individual & Employer Mandates are Gone and Not Coming Back

Is that what health reform what supposed to be?

Maybe it is. At least it is certainly starting to look more like that, isn't it?

It is worth remembering that in 2003 Barak Obama clearly articulated his vision for healthcare when he said:
"I happen to be a proponent of a single-payer universal health care program. I see no reason why the United States of America, the wealthiest country in the history of the world, spending 14 percent of its gross national product on health care, cannot provide basic health insurance to everybody. And that's what Jim is talking about when he says everybody in, nobody out. A single-payer health care plan, a universal health care plan. That's what I’d like to see. But as all of you know, we may not get there immediately. Because first we've got to take back the White House, we've got to take back the Senate, and we've got to take back the House."
For more on this theory and to see a video of Senator Obama's comments see what I wrote here.

Total Incompetence or Elaborate Scheme? Demise of Employer and Individual Mandates will Accelerate Erosion of Employer Sponsored Healthcare

Yes, the unraveling of President Obama's health law makes he and his cohorts look incompetent and short-sighted as we head into 2014. Far be it from me to advocate the intellectual giftedness of Nancy Pelosi and Harry Reid, but I think that view is, itself, too short-sighted. These delays, repeals (free choice vouchers, 1099 reporting, CLASS Act), and executive line-item vetoes (employer mandate, small business exchange) are leading us to the decoupling of employers and healthcare and that is going to please many people.

The hard left has long advocated single-payer healthcare akin to Canada's or England's while the hard right has advocated the legalization of an individual's ability to claim a tax deduction for health insurance just like an employer. That business tax deduction monopolization which is not similarly granted to individuals is a leftover from wage freezes in World War II and has been the single strongest driver of an employer-sponsored system in the U.S.

In both the left and right extremities lies a sentiment to dismantle the current system and replace it with single payer or individual free market care. In an unleashed free system people could buy their own high deductible plans across state lines, save for everyday care in health savings accounts, and freely move from employer to employer without regard to their need for corporate health insurance. Tax credits and subsidies could be given to low income individuals, but each person would control their own care and widget makers could focus on making widgets instead of diverting resources to becoming junior healthcare attorneys and compliance wonks.

'Single payer' is comically described in a recent post by John Goodman:
[For those who have been living under a rock, "single payer" is what we used to call "national health insurance," and before that "socialized medicine" and before that "government-provided health care," by people who today call themselves "progressives" but used to call themselves "liberals" and before that "socialists" in some cases — all in the hope that continual re-labeling will make the ideas actually seem sensible.]
The current events take us closer to pleasing both of these populations as the nation readies itself for the next debate: free market healthcare or socialized medicine? At least this will be an honest debate and not the hybrid Frankenstein monster of PPACA replete with political kick-backs, favoritism and perverse economic incentives (to cut people hours, keep employee size below 50, grant exemptions to favored constituencies, etc.)

Some policy wonks, including Dr. John Goodman at the National Center for Policy Analysis believe we will eventually end up with both. We'll have some kind of Medicaid-for-all that will please the socialized-medicine crowd and those who can afford it will enter a private-pay system with shorter waits, more thorough treatment and superior health outcomes. I tend to fall into this camp. I don't think we'll be better off. But I do believe that is where we will end up.

This is from Robert Brooks at Forbes further illustrating how PPACA's delamination takes us down that path, "The Employer Mandate Delay May Have Drastic Consequences":
... The combined effect of these changes [the delay and probable eventual death of the employer mandate and the unenforceability and soon to be political unviability of the individual mandate] will be to transform the health coverage landscape in a completely different way than was envisioned when the ACA was passed. Back in 2009 and 2010, various provisions of the employer mandate were presented by proponents as a “firewall” to prevent employers from “dumping” their low-income employees onto the exchanges, where they would be eligible for substantial subsidies at taxpayer expense. This “firewall” included not only a $2,000 per-employee penalty for not offering health coverage at all, but a $3,000 penalty per affected employee for offering coverage that was “unaffordable,” that is, with an employee share of the premium in excess of 9.5% of the employee’s family income (in which case the employee would be eligible for subsidies in the exchange). That firewall is now completely dismantled. Anyone willing to claim eligibility will be able to obtain exchange coverage, and (in the cases of about two-thirds of households) the premium subsidies that go with it. 
This dismantling of the firewall will have two immediate impacts. First, for a substantial percentage of people who get their health coverage through an employer, subsidized exchange coverage will be a better deal. (For those with income under three times the poverty level, the most they will have to pay in the exchange is less than the most they’d have to pay through an employer.) They will now face no barrier to enter the exchange and claim their subsidy. Second, without the employer penalty, it will be even more attractive an option for employers to let them go to the exchanges (that option is, as Doug Holtz-Eakin puts it, “on sale”) – and shut down their own health plans. For some fully-insuring (usually small) employers this will not even be an option, but a requirement. If enough employees drop out of the health plan at work, the employer will no longer meet the minimum participation requirements imposed for group plans by many insurers, and will be forced to drop its coverage. 
The result could well be a substantial collapse of employer-sponsored health coverage – something which could not be easily be rebuilt the following year if the employer mandate is imposed then. However, even for people who think employer-sponsored health coverage is nonsensical, this is not something to celebrate, because it would be replaced by something even worse. The reason? In the exchanges, the premium one pays is independent of health status – which means of you are relatively healthy can you simply wait until you “needs” coverage, and buy it then without paying a higher premium. In the meantime – which could be a very long time – you’ll have saved a lot by not paying a premium. Most people will save far more than it would cost the individual mandate penalty – and in any case that is most likely delayed for at least a year, and might well turn out to be unenforceable even after that (as explained, for different reasons by Megan McArdle, Michael Cannon, among others). 
When people figure out that they are financially better off waiting to buy health coverage until they need a lot of health care, the insurance pool will consist mainly of people who, well, need a lot of health care. In order to keep health plans solvent, premiums will have to go up – and for every increase, more people will decide they are better off without coverage. (Economists call this “adverse selection.”) 
The individual mandate penalty was supposed to limit this effect, and the employer mandate was supposed to isolate most workers from it. With both of those mandates delayed, unenforceable, or gone completely, there is nothing to prevent an upward spiral of premiums, higher taxpayer-funded subsidies and more people being uninsured. 
Is that what health reform what supposed to be?
My answer to this question is - maybe it is. At least it is certainly starting to look more like that, isn't it?

It is worth remembering that in 2003 Barak Obama clearly articulated his vision for healthcare when he said:
"I happen to be a proponent of a single-payer universal health care program. I see no reason why the United States of America, the wealthiest country in the history of the world, spending 14 percent of its gross national product on health care, cannot provide basic health insurance to everybody. And that's what Jim is talking about when he says everybody in, nobody out. A single-payer health care plan, a universal health care plan. That's what I’d like to see. But as all of you know, we may not get there immediately. Because first we've got to take back the White House, we've got to take back the Senate, and we've got to take back the House."
Video of this speech:

Now perhaps his view on this topic has also evolved like it did on same sex marriage (which he was against a couple of years ago and is now for) or the individual mandate itself. In the 2008 election candidate Obama, in a debate with candidate Hillary Clinton, scoffed at her and her belief that one could solve a lack of healthcare with an individual mandate. He argued that would be like a belief that one could solve homelessness with a mandate that all persons must buy a home. Months later he signed PPACA into law - endorsing that individual mandate. And to date, he has not used his newfound line-item veto power too delay or repeal that mandate. But ultimately he will. It is unenforceable and has been nullified by regulation anyway with no less than 20, yes TWENTY exemptions.

Candidate Obama on the Individual Mandate:

In any event, I'm staring to believe that PPACA might have been strategically constructed to fail all along. It is just too hard to fathom that any group of elected, life-long bureaucrats could have been this incompetent. But perhaps I under appreciate their shortcomings.

Stories Causing Atlas to Shrug


More than two Americans have been added to the food stamp rolls for every one job the Obama administration says it has created.


As more studies are done we learn that high doses of supplements like multivitamins have no effect or increase the risk of the diseases we are trying to prevent.

Political Buffoonery:

Congressman Jim McDermott compared those who oppose Obamacare to the South in the Civil War.   

Examining the Employer Mandate Delay and Its Effect on Workplaces

On July 23, 2013, Grace-Marie Turner testified before the Subcommittee on Health, Employment, Labor, and Pensions and the Subcommittee on Workforce Protections of the House Committee on Education and the Workforce. The following is a summary of her written testimony. A pdf version of her full testimony can be found here

Information about the hearing and testimony from the other witnesses can be found here.

Large and small businesses across America have been making painful decisions to lay off employees, cut workers’ hours, and make do with fewer workers than they really need.  This is not what you would expect in a recovering economy.

The clear distorting factor is the Affordable Care Act, especially the employer mandate. The decision by the administration to delay the reporting requirements for the mandate only adds to the questions and concerns business owners and workers have about the law.

The statute clearly says that the mandate is to begin in 2014, not 2015, as the administration has now directed. Last Wednesday, the House of Representatives passed legislation to give the administration legal authority to postpone the mandate.  However, the administration said in a puzzling statement that the president would veto the legislation to delay the mandate that he himself is delaying by administrative directive. No wonder businesses are confused!

Who made the decision?  CMS administrator Marilyn Tavenner testified last week that she was not consulted on the decision to postpone.  She said she was “made aware” of the delay just a few days before it was announced.

I understand that you had invited Howard Shelanski, the administrator of the OMB’s Office of Information and Regulatory Affairs, to testify today about the decision. In a call to committee staff, his office indicated it was not involved in the decision and therefore he would not testify.

Congressman Michael Burgess questioned a Treasury official during an Energy and Commerce Committee hearing last week regarding the timeline of the administration’s decision. The official was not able to provide the date the decision was made, nor who made the final decision to delay the mandate and whether that person was a Treasury Department or a White House official.

Certainly a decision with such significant implications should have been reviewed by those in the administration with responsibility for implementing the law to determine its legality, its implications for other provisions of the law, and its impact on businesses and their employees.

Now, employers are more confused than ever about their responsibilities and liabilities, including whether delay of the reporting requirements does in fact also absolve them of the mandate itself.

What business is saying

A part-time nation:  A recent survey by the U.S. Chamber of Commerce found that 71% of small businesses say the health law makes it harder to grow. Only 30% say they are prepared for the requirements of the law, and a quarter say they don’t even know what is required of them. Among small businesses that will be impacted by the employer mandate, one-half say they will cut hours to avoid the penalties.

An earlier Gallup poll found that 41% of small businesses surveyed had frozen hiring because of the health law. One in five said they already had reduced the number of employees “as a specific result of the Affordable Care Act.”

Employers have been providing health insurance for their workers voluntarily for more than 70 years, but the ACA places significant new burdens on employers, including onerous reporting requirements and higher costs because of new mandated benefits.

While most employers want to provide health insurance, not all can afford it and still keep their prices competitive.  For companies with very tight profit margins, the mandate to provide health insurance can send their bottom line from black to red.

Some critics have argued that if all businesses are forced to provide health insurance and raise prices, they will not lose customers because all of their competitors will be operating under the same requirements. But customers are smarter than that:  They will buy less, substitute more, and more business transactions will simply vanish.

Employers already are responding to the mandate

Backers of the health law have said that the one-year delay in reporting requirements for the employer mandate is largely irrelevant because the great majority of employers subject to the mandate already offer health insurance. But offering isn’t the same as accepting.  Almost half of the nation’s nearly 28 million uninsured workers are employed by firms that are mandated to provide health coverage.

Federal data show that 96.8% of firms with 50 or more employees do offer health benefits. However, Professor Chris Conover of Duke University has examined the distribution of the nation’s 28 million uninsured workers age 18-64 by firm size, and he found that 46.1% are employed at firms subject to the mandate.

Therefore, to say that delaying the mandate is inconsequential is belied by the facts.

Incentives to drop coverage: While the health law tried to lock-in employer coverage, it may very well have the opposite effect of incentivizing employers to drop it instead.  The Wegmans grocery chain, for example, is cutting health benefits for its part-time employees and plans to send them to the ObamaCare exchanges where they may get more generous benefits and subsidies than the company says it can offer.

Cutting hours:  The health law is redefining a full-time work week as 30 hours rather than the traditional 40.  Because there is a look-back period, many employers already are scaling back employee hours.  And many of them are cutting workers to 25 hours to provide a cushion in case shifts run over.

That is a significant income loss for workers, many of whom are at the lower-end of the income scale.  But employers, especially in the restaurant and retail industries, say that their decisions are driven by an attempt to keep their doors open.

And a one-year delay in the employer mandate will not change the hiring behavior of employers.  They won’t hire full-time workers while knowing they would have to let those workers go a year from now.  If anything, the delay gives employers more time to figure out how to restructure their businesses and workforces to avoid the added costs of the health law.

Redefining 30 to 40 hours:  Some business groups are advocating a change in the law to move the definition from 30 to 40 hours.  While that seems logical, many businesses will continue to build a cushion into their schedules and that would likely mean the full-time work week would be 35 rather than 40 hours.  I would recommend that Congress not make this change.  The only solution to avoid these and other distortions in the labor market is to repeal the employer mandate.

Labor unions unhappy

Those who say that the employer mandate has little or no effect on businesses also should listen to those who represent organized labor.  Representatives of three of the nation’s largest unions recently warned Democratic leaders in Congress that Obamacare would “shatter not only our hard-earned health benefits, but destroy the foundation of the 40 hour work week that is the backbone of the American middle class.”

“Perverse incentives are causing nightmare scenarios,” they write. “The impact is two-fold: fewer hours means less pay while also losing our current health benefits.”

Last week, Laborers International Union of North America President Terry O’Sullivan wrote that the law has “destructive consequences” for the types of health plans that cover millions of unionized construction workers and their family members.

But the delay of the reporting requirements for the employer mandate does not mean that businesses can take a year off from other provisions of the law, and the president has not given them relief from these requirements that will further burden businesses with compliance costs and distract them from their core business activities.

Next steps

One of the things that businesses had most hoped to get from the law was more affordable coverage through the small business exchanges called for in the law. But the administration announced in April that it would delay until at least 2015 implementation of these exchanges.

The administration also has announced it will rely on an “honor system” for health insurance subsidies, presenting a significant potential for fraud and waste of taxpayer funds.  Additionally, very little information has been provided by the administration about the status of the exchanges that the federal government is creating.

The risks, complexities, delays, and confusion surrounding the ACA strongly indicate that the only responsible path is to delay implementation of the exchanges and related subsidies until taxpayers can be assured funds are being spent properly and legally.  In the meantime, Congress could authorize funds to help states develop or strengthen high-risk pools so people with pre-existing conditions who are waiting for the exchange coverage to begin on January 1 can get coverage immediately.

A full version of Grace-Marie’s testimony can be found here.
Information about the hearing and testimony from the other witnesses can be found here.


Wednesday, July 24, 2013

The Damage Has Been Done: PPACA Has Resulted in Caps on Worker Hours Despite Employer Mandate Suspension

This is from Sandhya Somashekhar at the Washington Post (link): 

For Kevin Pace, the president’s health-care law could have meant better health insurance. Instead, it produced a pay cut.

Like many of his colleagues, the adjunct music professor at Northern Virginia Community College had managed to assemble a hefty course load despite his official status as a part-time employee. But his employer, the state, slashed his hours this spring to avoid a Jan. 1 requirement that all full-time workers for large employers be offered health insurance. The law defines “full time” as 30 hours a week or more....

This month, the Obama administration delayed the employer insurance requirement until January 2015. But Virginia, like some other employers around the country that capped part-timers’ hours in anticipation of the initial deadline, has no plans to abandon its new 29-hour-a-week limit.

The impact on Pace and thousands of other workers in Virginia is an unintended consequence of the health law, which, as the most sweeping new social program in decades, is beginning to reshape aspects of American life.

Under the law, companies with 50 or more workers will be required to provide health insurance to all their full-time employees or face significant fines.

The decision to delay that requirement was welcomed by business groups, which said companies needed more time to adapt to the law. But the delay has emboldened the law’s critics, who say it is evidence that the statute is ill-conceived and should be repealed....

When the law was written, advocates hoped the employer requirement would help reduce the ranks of the uninsured. Some employers have said they would offer insurance to additional workers, but others have gone in the opposite direction.

Virginia’s situation provides a good lens on why. The state has more than 37,000 part-time, hourly wage employees, with as many as 10,000 working more than 30 hours a week. Offering coverage to those workers, who include nurses, park rangers and adjunct professors, would have been prohibitively expensive, state officials said, costing as much as $110 million annually.

[A recent study] found that 12 percent of employers in a survey last year planned to cut staff hours to avoid a jump in costs under the new rules....

Friday, July 19, 2013

Chart of 21 Steps and 5 Agencies to Determine PPACA Eligibility

This chart that shows how Obamacare will work, and it’s taken from an official report released by government auditors. The image below shows how the Treasury’s inspector general for tax administration explained the Obamacare enrollment process, in testimony before the House Oversight Committee on Wednesday:

President Obama's Plan to "Simplify" Your Health Care

The process for determining subsidy eligibility could require 21 different steps, involving at least five separate entities—the Social Security Administration, the Department of Homeland Security, the Department of Health and Human Services, the Internal Revenue Service, and state exchanges—and utilizing a process called the Income and Family Size Verification Project.

Given this bureaucratic nightmare, it’s little wonder that another report from government auditors released last month said that “critical” deadlines to create the Obamacare exchanges had been missed. Nor should any be surprised that yesterday, Treasury’s inspector general for tax administration testified it “is concerned that the potential for refund fraud and related schemes could increase” due to Obamacare.

California's Largest Small Biz Insurer - Anthem Won't Participate in CA Small Biz Exchange

Anthem Blue Cross will not sell policies to California small businesses through a new marketplace created by ObamaCare.

The healthcare law establishes new insurance exchanges in each state, where individuals and small businesses can shop for coverage. Anthem Blue Cross said it does not intend to participate in California's small-business exchange, according to a report in the Los Angeles Times.

Anthem is the state's largest insurer for small businesses.

The company said it still intends to sell policies outside of the small-business exchange, according to the Times — so its decision to stay out of the exchange could hamper the state's ability to make the marketplace attractive to businesses.

"That's really surprising and not a good thing for the exchange," Micah Weinberg, a senior policy adviser at the Bay Area Council, an employer-backed San Francisco group, told the newspaper.

Source: The Hill's Healthwatch

Obamacare Penalties Spawn 'Skinny' Plans to Skirt Most Employer Penalties

  • A Treasury Department official confirmed that properly designed skinny (mini-med) plans meet the requirements of the health care law. 
  • The premium for these plans would be around $50 a month. 
  • About 1.4 million Americans had mini-med plans in 2010.
This from Politico
Employers heaved a sigh of relief when the Obama administration announced it would not enforce Obamacare’s mandate that large companies provide insurance to their workers next year.
But some companies plan to offer “skinny plans” designed to duck the biggest penalties anyway, according to industry consultants. And the Obama administration has extended its blessing to this limited coverage, even though it would not protect individuals from medical bills that could cause financial ruin in the case of severe injury or illness.
The health law spells out in detail the comprehensive coverage that insurers have to provide on the new insurance marketplaces or exchanges. But it’s nearly silent about what the employers who provide insurance to a majority of Americans need to include in their health plans.
“There are no rules on how good that coverage has to be,” said Gretchen Young, senior vice president of health policy at the ERISA Industry Committee....
“There are particular employers in particular industries for whom the Affordable Care Act is a disaster,” said Andy Anderson, who leads the health division at the law firm Morgan, Lewis & Bockius in Chicago. The Congressional Budget Office estimates the penalties would bring in $3.7 billion per year.
The health care law required employers with the equivalent of 50 or more full-time workers to provide health insurance or else pay a $2,000 per employee fine, starting in 2014. After intense lobbying from the business community, the Treasury Department announced earlier this month that the mandate won’t take effect until 2015.
The penalty is a fraction of the roughly $8,000 it costs to provide an employee with comprehensive health insurance. But it would be a major new expense for large employers that don’t pay for coverage now.
A firm with 2,500 employees would pay about $5 million in penalties each year.
But there’s a second penalty that gets less attention. Large employers that don’t provide robust, affordable insurance to their workers will pay a $3,000 penalty for each employee who gets taxpayer-funded subsidies on an exchange.
And there is a new type of insurance plan that is designed to protect employers from the first penalty and lower their exposure to the second. They are the skinny plans, a descendant of limited benefit — or “mini-med” — plans that are set to be phased out at the end of this year.
“Skinny alternatives are an attempt to manage liability for ACA penalties,” said Neil Trautwein, employee benefits policy counsel at the National Retail Federation.
The idea is that far fewer employees will go to the exchanges if they have an affordable alternative in the workplace.
Unlike the plans sold through the exchanges, company-backed insurance does not have to cover the 10 categories of services in the health care law’s essential health benefits.
There are a few standards, however.
Skinny plans will have to cover preventive services like vaccines and cancer screenings without any cost-sharing — a requirement of all insurance under the health law. They can’t put a cap on annual benefits, as limited benefit, or mini-med, plans typically do now. But the lack of a cap is largely symbolic because the plans don’t cover the services that run up medical bills.
They could offer very limited coverage of hospitalizations or surgeries, for instance, and a certain number of doctor office visits and a narrowly tailored prescription drug benefit. The premium for these plans would be around $50 a month, said Richard Stover, a principal in New Jersey-based Buck Consultants, who has clients that plan to offer skinny plans next year....
And those who want more comprehensive coverage can still go to the exchanges, where they may be eligible for subsidies depending on their income.
“That may be a better option for employees who need better coverage,” Stover said. For those employees who do receive subsidies on the exchange, their employers would have to pay a $3,000 penalty, but it’s likely to be a smaller subset of the workforce, Stover said.
The most likely group of employees to be offered skinny plans next year are those who work for employers that have mini-med plans now. About 1.4 million Americans had mini-med plans in 2010....
A Treasury Department official confirmed that properly designed skinny plans meet the requirements of the health care law....

9.6 Year Wellness Intervention Cancelled After Failure to Produce Change

More on the magic beans front: 
  • Short of interning people in exercise camps, it is hard to imagine a more intensive intervention 
  • After 9.6 years there was no difference in cardiovascular events in the two groups
  • The treatment group had more inpatient visits and more ambulatory visits costing $2,388 a year, with $827 higher diabetes-related costs - with no difference in health outcomes.  
This was published by Linda Gorman on John Goodman's Health Policy Blog (Link)

According to the July 11, 2013 issue of The New England Journal of Medicine, the Look AHEAD trial has been canceled on the “basis of a futility analysis” after 9.6 years of follow-up. It was designed to study whether an intensive lifestyle intervention for weight loss would decrease cardiovascular morbidity and mortality among overweight or obese patients with Type 2 diabetes. Short of interning people in exercise camps, it is hard to imagine a more intensive intervention.

The 5,145 participants were randomly assigned to either a control group or an intensive lifestyle intervention group. The control group received the usual information about behavioral strategies for adopting standard recommendations about how to eat right and exercise.

The intensive lifestyle intervention group met with extensively trained, culturally sensitive, lifestyle counselors 4 times a month in the first year. Its members received individualized weight loss goals, specific per day calorie intake goals, meal replacements that were provided free of charge and detailed exercise goals for each week. Weight loss drugs were offered if participants failed to meet their goal in the first 6 months. During years 2-4 each participant had a monthly individual meeting with a phone or email follow-up two weeks later. They kept goal sheets, food, and activity records. Monthly meetings were available, and prizes were awarded if people met specific goals such as losing 5 pounds or walking 400,000 steps. There were 16 centers, and they competed against each other to reach weight loss and activity goals.

After 9.6 years there was no difference in cardiovascular events in the two groups. Standard clinical measures of health had improved more for the intervention group than for the control group, though some of the improvements were small.

At the end of four years, Wadden et al. (2012) reported that the control group had lost an average of 1.3 kg (almost 3 pounds) while the intensive intervention group had lost an average of 4.9 kg (almost 11 pounds). By the end of the trial, the control group had lost an average of 3 percent of body weight while the intervention group had lost an average of 6 percent. For a 5 foot 7 inch woman weighing 180 pounds at baseline, a 6 percent loss would be 10.8 pounds. A 3 percent loss would be 3.4 pounds.

Separately, Sullivan et al. (2013) reported that people who received diabetes counseling and education services in a matched retrospective cohort study at a large managed care organization achieved A1c levels of 7.2 percent after 1 year. People in a control group received no services and had an A1c of 7.7 percent. The treatment group had more inpatient visits and more ambulatory visits. They were also more likely to have a hypoglycemic event. Their increased health service use cost $2,388 a year, with $827 higher diabetes-related costs.

Tuesday, July 16, 2013

Survey: Two-Thirds of Small Businesses Aren't Ready for ObamaCare

Less than a third of small businesses say they’re prepared for the regulatory mandates under ObamaCare, a new survey from the U.S. Chamber of Commerce found.

The business lobby's quarterly survey of small firms found a concerns over the law have increased by a double-digit margin over the last year, and by four percentage points since the first three months on 2013.

“Excessive regulation is having a crippling effect on job growth among small businesses, as our latest small business survey makes clear,” said Rob Engstrom, the Chamber’s senior vice president. “In fact, the only thing that scares small businesses more than the current business climate is what Washington bureaucrats will do next.”

Full story from The Hill

More from the survey (summarized by John Goodman, link): 
  • Among small businesses that will be impacted by the employer mandate, one-half say that they will either cut hours to reduce full time employees or replace full time employees with part-timers to avoid the mandate. Twenty-four percent say they will reduce hiring to stay under 50 employees.
  • Seventy-one percent of small businesses say the health care law makes it harder to hire.
  • Only 30 percent say they are prepared for the requirements of the law, including participation in the marketplaces, and one-quarter say they are unaware of what is required.

Insurers Hiring Companies to Assist in Marketing to the Healthy and Avoiding the Sick

...Since insurers can no longer pick and choose their customers, they will employ a range of subtler tools, including marketing campaigns and carefully designed plans aimed at the customers the insurers most want.

"They want to attract the right risk," said Siva Namasivayam, chief executive of SCIO Health Analytics Inc. His firm helps insurers identify customer types, such as "entry-level singles" and "healthy baby boomers," each with projections on likely costs. The firm pinpoints, by ZIP Code, where the different types tend to live, so the insurer can target its marketing geographically.

Highmark Inc., a Pittsburgh, insurer, said it has around 100 targeted campaigns aimed at particular types of consumers, including recent college graduates and retirees not yet eligible for Medicare. It sends walk-in tractor-trailers to college campuses and sets up booths at community events such as charity walks. "We have to be more one-to-one than we were historically," said Steven Nelson, a senior vice president at Highmark.

Blue Cross & Blue Shield of Rhode Island also plans to aim at certain populations, including young men. Last year, the insurer promoted one of its low-cost plans with a campaign that included posters on the walls of men's bathrooms in bars. "You don't need beer goggles to fall in love with this health plan," one slogan said.

Liar for Hire: for $54 Your Employees and Applicants Can Provide You With Any Excuse

Tim Green will tell anyone anything -- for a fee.

As the founder of Paladin Deception Services, he will say what clients want him to say to anyone calling on his dedicated phone lines.

He provides cover for cheating husbands, fake references for job-seekers and even "doctors" to confirm that someone needs a sick day.

He says he won't break the law -- in fact, that he has passed tips on to police. But he uses email and phones to twist, stomp and shred the truth for $54 a month.

"We all need a second chance," said Green, 59, who lives in Forest Lake and is a semi-retired private detective.

Some businesses and experts in ethics may say it's wrong to facilitate lying, in any form. Facebook apparently agrees -- the company booted Green's ads in May.

But Green pooh-poohs his critics.

"I believe that my moral compass is intact," he said. "We are not breaking any laws, and if we help people out, I feel like we are doing a positive service.

"I consider it disinformation. I consider it a business."

Since he started Paladin in 2009, he has had about 250 clients on a ongoing basis.

When potential clients call, Green connects them with one of his five employees.

He picks the one best-suited for the job -- male, female, or someone fluent in Spanish or Chinese. One employee is known for his ability to speak with a British accent or a Southern drawl.

Paladin provides a phone number with -- thanks to technical wizardry -- any area code in the country.

That would make it possible, for example, for a business in Atlanta to call a number with an Atlanta area code. Green's employees would answer, pretending to be an Atlanta-based business, doctor or whatever was required.

Included in the service is a bogus email address. Anyone seeking email verification will get a quick response from Paladin -- saying whatever the client wanted to say.

One deception, called a "scenario," costs $54. That includes callbacks if the person 

being duped calls repeatedly to recheck the facts.

The service, with the same scenario, can be maintained for an additional $19 a month. And a new line of deception can be added for another $19 a month....

Roughly 70 percent of Paladin's business comes from job-seekers.

If people have embarrassing gaps in their work histories, Paladin can fill them. When a prospective employer calls, Paladin's workers will confirm any details that the client wants -- high salary, years of service, job title....

Cheating spouses are regular customers.

"They just say, 'I need someone to say I was here at this time or that time,' " said Green. "I'm not responsible. I don't judge."

Other times, customers retain Paladin to avoid work. Green has posed as a funeral home manager, to verify that someone attended a funeral. "We will say that Mr. or Mrs. So-and-So passed away," he said....

Paladin's help for someone lying on a resume might fit the legal definition of fraud "if the deception is material and is reasonably relied on by the person who is deceived."...