News of the Day

Yesterday, the U.S. Department of Labor announced a Notice of Proposed Rulemaking (NPRM) to expand the opportunity to offer employment-based health insurance to small businesses through Small Business Health Plans, also known as Association Health Plans.

Up to 11 million Americans working for small businesses/sole proprietors and their families lack employer-sponsored insurance. These 11 million Americans could find coverage under this proposal. Many small employers struggle to offer insurance because it is currently too expensive and cumbersome. These employees – and their families – would have an additional alternative through Small Business Health Plans (Association Health Plans). These plans would close the gap of uninsured without eliminating options available in the healthcare marketplace.

Under the proposal, small businesses and sole proprietors would have more freedom to band together to provide affordable, quality health insurance for employees.

The proposed rule, which applies only to employer-sponsored health insurance, would allow employers to join together as a single group to purchase insurance in the large group market.

These improvements stand to open health insurance coverage for millions of Americans and their families by making it more affordable for thousands of small businesses and sole proprietors. By joining together, employers may reduce administrative costs through economies of scale, strengthen their bargaining position to obtain more favorable deals, enhance their ability to self-insure, and offer a wider array of insurance options.

As proposed, the rule would:

• Allow employers to form a Small Business Health Plan on the basis of geography or industry. A plan could serve employers in a state, city, county, or a multi-state metro area, or it could serve all the businesses in a particular industry nationwide;
• Allow sole proprietors to join Small Business Health Plans, clearing a path to access health insurance for the millions of uninsured Americans who are sole proprietors or the family of sole proprietors.

The proposed rule includes important protections for Americans. Small Business Health Plans (Association Health Plans) cannot charge individuals higher premiums based on health factors or refuse to admit employees to a plan because of health factors. The Department of Labor’s Employee Benefits Security Administration will closely monitor these plans to protect consumers.

The NPRM will be published in the Federal Register on January 5, 2018, and be available for public comment for 60 days.  The Department encourages interested parties to submit comments on the proposed rule. The NPRM, along with the procedures for submitting comments, can be found at the Federal Register website.

Eighty-eight percent of Wisconsin construction firms expect to expand their payrolls in 2018, although many companies are worried about workforce shortages, according to the latest survey from the Associated General Contractors of America.

Contractors are optimistic that economic conditions will remain strong as tax rates and regulatory burdens fall, according to survey results.

“Construction firms appear to be very optimistic about 2018 as they expect demand for all types of construction services to continue to expand,” said Stephen Sandherr, the association’s chief executive officer. “This optimism is likely based on current economic conditions, an increasingly business-friendly regulatory environment and expectations the Trump administration will boost infrastructure investments.”

In Wisconsin, 44 percent of respondents said they expect to increase their headcount between one and 10 people; 33 percent of respondents said they plan to add 11 to 25 people and 11 percent of respondents said they plan to add 25 or more people to their company in 2018.

Nationwide, 75 percent of construction firms plan to expand their workforce in 2018, up slightly from 73 percent in 2017. Most of the hiring will only expand headcounts by a slight percentage (10 percent or less) per firm, however.

Broken down by market segment, contractors nationwide are most optimistic about the private office market segment. This is followed by the other transportation and retail, warehouse and lodging.

Property taxes in Wisconsin are projected to rise 1.8% statewide this year, according to the
Wisconsin Taxpayers Alliance (WISTAX), a nonpartisan, nonprofit organization devoted to public policy research and citizen education. After roughly $1.1 billion in state credits are applied, net property taxes will rise an estimated 1.1%, to $9.9 billion statewide.

K-12 school taxes, which comprise 45% of the tax bill statewide, increased 1.8%, more than the 0.1% increase in 2016-17, but less than the 2.0% increase in 2015-16.

Counties, which make up another 20% of the tax bill, raised levies by 3.0%, up from 2.2% last year. The increase is the highest since 3.2% in 2010.

Municipal levies are still being compiled by the state, but WISTAX estimates they likely increased an average of 3.5%, up slightly from last year’s increase of 3.1%. The total tax levy for all cities, villages, and towns would be almost $2.85 billion, or about 25% of the entire bill.

Taxes for technical colleges, which account for only about 4% of the bill, rose 3.0%, to $446.6 million. Technical college levies have declined by nearly 50% since 2015, when the state provided $406 million to “buy them down” and imposed revenue limits on districts. From 1990 to 2010, “tech college” property tax increases averaged 6.4% annually, more than any other type of local government in Wisconsin.

Missing from this year’s property tax bill is the state forestry tax. The 2017-19 state budget eliminated it, at a cost of about $90 million annually; forestry programs will be funded from state income and sales taxes in the future.

The penalty for not having health insurance — the most controversial and unpopular part of the Affordable Care Act — is dead. But it may no longer matter.

“From a practical matter, it won’t have much of an impact,” said Marty Anderson, chief marketing officer for Security Health Plan, an affiliate of Marshfield Clinic.

The penalty was repealed as part of the tax reform and tax cut that was signed into law Friday by President Donald Trump. The change goes into effect in 2019.

The fine is a minimum of $695 for an adult or 2.5% of income, above the federal tax filing threshold of roughly $10,650 for one person.

It was considered too small by many policy analysts and was far less effective than projected.

“Certainly I would prefer to keep it in place,” said Cathy Mahaffey, chief executive officer of Common Ground Healthcare Cooperative in Brookfield. “But I really do think the impact of repealing the penalty will be minimal.”

The mandate to have health insurance or pay a penalty is tied to one of the most popular provisions: requiring health insurers to cover people with pre-existing health problems.

The penalty was designed to prod healthy people to buy health insurance to help offset the cost of covering people with health problems and to discourage people from waiting until they were sick before buying health insurance.

But if people were going to be required to buy health insurance, the cost would need to be subsidized for people with low incomes who could not afford insurance on their own.

That was the underlying idea, and it didn’t work as well it was intended.

State consumer protection officials are warning the public about a rash of scam emails that are using their agency to try and trick people.

The Department of Agriculture, Trade and Consumer Protection says scam emails are making the rounds that are claiming to be from DATCP officials, and telling people that they have an invoice due. The mail then claims that the recipient needs to click a link and pay that invoice.

Spokesperson Jerad Albrecht says this is something that happens to their agency every so often. “We talk about imposter scams a lot, where scammers will use the name or contact information from a major company or government agency to add legitimacy to their ploy.”

Versions of the email currently circulating will claim to be from agency officials, but the email address actually sending those mails will be from some random website not affiliated with the state. “And if they’re getting any kind of email that claims to come from our agency, especially if they’re mentioning an invoice and offering you a link to click, we don’t want you to do that,” says Albrecht. Those links simply open you up to losing your personal information or installing malware on your computer.

“If we are going to contact you, it’s going to be by mail, not by email.”

If you get one of these emails, Albrecht says you should simply delete it and move on. If you have concerns, you can always contact the state’s consumer protection help line at (800) 422-7128.

Gov. Scott Walker said he plans to address the rising cost of health insurance in 2018.

Walker said Thursday in La Crosse that he plans to lay out his agenda for next year’s session in January. Along with workforce and education, Walker said addressing the rising cost of health insurance will be a top issue.

“In light of the inaction in Washington when it comes to health care, there’s more that we can do to help people in the state of Wisconsin, particularly help to try and take a bite out of high premium costs,” Walker said.

State insurance officials have said they’re considering applying for a federal waiver to set up an alternative insurance system in the state. The waiver could help cover patients with high-cost conditions through a reinsurance program or a program similar to a high-risk pool.

Walker said he’s also been talking with Assembly Speaker Robin Vos, R-Rochester, about expanding support for public schools in the next session.

“(Vos) was very interested in the things that we’d like to do to continue, particularly for rural schools and low-revenue schools to give them support,” Walker said.

As property tax bills arrive this month, Wisconsinites are often left wondering, “Why is my
bill so high?” A new report from the Wisconsin Taxpayers Alliance (WISTAX), “Investigating Residential Property Taxes” answers this and other property tax-related questions.

Taxpayers are also often puzzled why their property taxes have increased more than the “average” or “median-valued” home in their community, or why their taxes increased more than their neighbors’. The report explains several factors at work.

First, averages tend to mask variations among communities and between individual properties. Some local governments may levy more than others, which means both total tax collections and taxes on individual properties will be higher.

Shifting values also have an impact. If the value of an individual property rises more than other properties in a community, a homeowner may end up paying a larger share of the total tax “pie.” Similarly, if the total value of one municipality in a county or school district rises while other values decline, residents of that municipality may also be responsible for a bigger share of the total county or school district collections.