Extend Health held a tweet chat today on health care costs. There were some great questions and excellent answers from John Barkett, Dir. of Policy Affairs at ExtendHealth fielded questions. John worked in congress on health care and his wealth of knowledge was evident in the answers he provided.

If you missed our tweet chat you can read a complete recap of the event. Hope to see you at the next one!

Visit Extend Health to use the ExtendExchange™ platform – the nation’s largest private Medicare insurance exchange.

This is the second post written for Extend Health by Avalere. We asked them to take a look at the changes made by the reform legislation to the Retiree Drug Subsidy, and the potential impact to both retirees and their employer sponsors.

Health Reform and the Changes to the Retiree Drug Subsidy: Potential Implications for Seniors

The Patient Protection and Affordable Care Act (ACA) makes several changes that will affect drug coverage for retirees.  Specifically, you may have heard about changes to the Retiree Drug Subsidy (RDS) and wondered what they might mean for your company’s retiree benefits. 

The RDS was part of the Medicare Modernization Act (MMA), which Congress passed in 2003.  It is a tax-free Medicare payment to employer-sponsored plans, worth 28 percent of allowable drug costs between $310 and $6,300 for each covered retiree not enrolled in Medicare Part D in 2010.  RDS payments were excluded from the employer’s gross income for the purposes of corporate income tax, and employers were also allowed to claim a business deduction for retiree prescription drug expenses even though they also received the federal subsidy to cover a portion of those expenses. 

The ACA changes the tax treatment of the RDS beginning in 2013.  Rather than receiving both the subsidy and the tax deduction for retiree prescription drug coverage, the amount allowable as a deduction will be reduced by the amount of the federal subsidy received.  Some employers may choose to eliminate their retiree drug coverage in response to this change.  However, the impact of these changes may be limited since a significant portion of RDS-covered retirees belong to groups that are exempt from federal taxes, such as state and local governments and non-profits.  Read the rest of this entry »

By Taimur Qazi

The financial impact of Health Reform on medical professionals across the country is difficult to predict. Physicians derive their income in different ways with many being independent practitioners and others working as employees of large physician groups and hospital systems. Read the rest of this entry »