Budget Deal Eliminates Two Health Care Reform Law Initiatives, Affects other Employment-Related Programs
Update: As expected, on April 14 the House and Senate passed the budget bill, sending the measure to the President for his signature. The Senate rejected a proposed resolution that would have de-funded the Affordable Care Act.
The eleventh-hour budget deal reached on April 8, 2011 would impact a number of healthcare and employment-related programs. Overall, the Department of Defense and Full-Year Continuing Appropriations Act of 2011 (H.R. 1473), (pdf) commonly referred to as the continuing resolution (CR) to fund the federal government though September 30, 2011, cuts approximately $13 billion in appropriations from the President’s funding request for the U.S. Departments of Labor, Education, and Health and Human Services. Some initiatives are extended under the measure, while others are reduced or eliminated entirely. A full list of the program cuts can be found here. (pdf)
Among other casualties (pdf) of the budget deal are two programs created by the Affordable Care Act – the Consumer Operated and Oriented Plan (CO-OP) and the Free Choice Voucher programs. The CO-OP program was designed to foster the creation of qualified nonprofit health insurance issuers that would have offered qualified health plans in the individual and small group markets. These plans were intended to compete with the private insurance market.
The second program to get the axe would have allowed low-income workers to decline their employer’s health care coverage in order to seek potentially cheaper plans in the health insurance exchanges, to be created in 2014. Under this Free Choice Voucher plan, employees with household incomes at or below 400% of the federal poverty level and whose premium payment is between 8% and 9.8% of their household income would have been eligible for the free choice vouchers provided by their employers. The amount of the free choice voucher would have been the amount the employer would have contributed toward the employee's coverage.
Notably, the CR omits broader efforts to defund the Affordable Care Act entirely, although Congress is set to vote on a resolution this week to “correct” the CR to achieve that end. This measure is not expected to pass the Senate. The CR does, however, direct the General Accounting Office (GAO) to, among other things, issue a report on the Affordable Care Act’s implementation and conduct an audit on annual limit waiver requests. The measure would also require the Centers for Medicare & Medicaid Services to submit to Congress a Medicare actuarial analysis of how applying certain Affordable Care Act requirements will impact projected premium amounts.
Assuming Congress approves the CR by the April 15 deadline, the above programs would be the latest portions of the Affordable Care Act to be eliminated. Last week, the Senate passed the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 (H.R. 4), the measure that repeals the controversial expanded information reporting requirements that were included in the Affordable Care Act.
The Department of Defense (DoD) portion of the CR includes the provisions prohibiting defense contractors that receive defense contracts of at least $1 million from requiring their employees or contractors to sign, as a condition of employment, an agreement “to arbitrate any claim under Title VII of the Civil Rights Act of 1964 or any tort related to or arising out of sexual assault or harassment, including assault and battery, intentional infliction of emotional distress, false imprisonment, or negligent hiring, supervision, or retention.” Nor would a defense contractor be permitted to take any action to enforce a provision of an existing agreement that would require the employee or contractor to submit such claims to arbitration. The contractor would have to certify that it does not require its employees or subcontractors to adhere to such arbitration agreements. As with the provision that was included in the prior defense appropriations bill, these limitations would not apply to contracts that cannot be enforced in the United States. Additionally, under limited circumstances, the Secretary of Defense may waive these requirements on a case-by-case basis, if the Secretary or the Deputy Secretary personally determines that the waiver is necessary to avoid harm to national security interests of the United States, and that the term of the contract or subcontract is no longer than necessary to avoid such harm. The DoD issued a final rule on these arbitration restrictions in December 2010.
Worker Safety and Health
Occupational safety and health funding will take a hit by the revised budget. The appropriation level proposed for this category is $49 million less than what the DOL received in 2010, and $132 million less than what was requested for FY 2011. The Mine Safety and Health Administration (MSHA), however, would be given $363,843,000, up to $3,000,000 of which could used for activities related to the DOL’s caseload before the Federal Mine Safety and Health Review Commission.
While many programs are being cut or reduced under the CR, the measure allocates at least $21,332,000 to the Secretary of Labor “for the purposes of program evaluation, initiatives related to the identification and prevention of worker misclassification, and other worker protection activities.” The DOL has made coordination with other federal agencies to target worker misclassification a priority.
The House of Representatives is expected to vote on this CR on Thursday.
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