Obamacare Reg Treats Congress That Spent $3.5 Trillion as a ‘Small Business’

By Terence P. Jeffrey | December 5, 2013 | 6:51pm EST

President Barack Obama and House Democratic Leader Nancy Pelosi (AP Photo/Pablo Martinez Monsivais)

(CNSNews.com) - An Obamacare regulation issued by the Office of Personnel Management in October treats the U.S. Congress—which employs more than 11,000 staffers and which spent $4,329,000,000 on its own operations and $3,454,253,000,000 to fund the full government in fiscal 2013--as a “small business.”

OPM did this so that the Treasury can pay federal subsidies of up to $11,378 per year to help members of the House and Senate and their staff buy health-insurance plans in the Obamacare “Small Business Health Options Program” (SHOP) Marketplace set up for “small employers” in Washington, D.C.

The regulation treats this federal tax subsidy paid by the U.S. Treasury as if it were an “employer contribution” made by the owner of a small business.

Subsection D of Section 1312 of the 906-page Patient Protection and Affordable Care Act is entitled: “MEMBERS OF CONGRESS IN THE EXCHANGE.”

It says: “Notwithstanding any other provision of law, after the effective date of this subtitle, the only health plans that the Federal Government may make available to Members of Congress and congressional staff with respect to their service as a Member of Congress or congressional staff shall be health plans that are—(I) created under this Act (or an amendment made by this Act); or (II) offered through an Exchange established under this Act (or an amendment made by this Act).

Ordinary citizens who buy their Obamacare-mandated health insurance through one of the individual exchanges set up under the law do not get an "employer contribution." Moreover, such individuals can only qualify for a federal subsidy to buy their insurance on the exchange if they earn less than 400 percent of the poverty level.

Four hundred percent of the poverty level for a family of four is currently $94,200. Members of the House and Senate are paid a base annual salary of $174,000. A congressman would need to have a family of 9—including a spouse and 7 children—in order to qualify for a subsidy in the individual Obamacare exchanges. (So long as the spouse did not earn an income, in which case they would need to have more children to qualify.)

Under the actual language of the Patient Protection and Affordable Care Act, the SHOP marketplaces are specifically set up as places where “small employers” can buy health insurance.

In Section 1311, PPACA says: “Each State shall, not later than January 1, 2014, establish an American Health Benefit Exchange (referred to in this title as an ‘Exchange’) for the State that—(A) facilitates the purchase of qualified health plans; (B) provides for the establishment of a Small Business Health Options Program (in this title referred to as a ‘SHOP Exchange’) that is designed to assist qualified employers in the State who are small employers in facilitating the enrollment of their employees in qualified health plans offered in the small group market in the State.”

The law goes on to say: “The term ‘qualified employer’ means a small employer that elects to make all full-time employees of such employer eligible for 1 or more qualified health plans offered in the small group market through an Exchange that offers qualified health plans.”

What is a “small employer”—as opposed to a “large employer”? The PPACA provides statutory definitions of each.

“The term ‘large employer’ means ... an employer who employed an average of at least 101 employees on business days during the preceding calendar year and who employs at least 1 employee on the first day of the plan year,” says the law.

“The term ‘small employer’ means ... an employer who employed an average of at least 1 but not more than 100 employees on business days during the preceding calendar year and who employs at least 1 employee on the first day of the plan year,” says the law.

There is also an exception in the law that applies through 2015 that allows a state to consider a “small employer” a business with 50 or fewer employees.

In no case can an employer who has more than 11,000 employees be considered a “small employer” under the Obamacare law.

According to the Vital Statistics on Congress published by the Brookings Institution, Congress employed a total of 11,397 staff in 2010. According to the Monthly Treasury Statement for September 2013, Congress spent $4.329 billion on its own operations in fiscal 2013, and the entire federal government spent $3,454,253,000,000--that was authorized by Congress.

Nonetheless, in its regulation implementing the Obamacare provision that mandates that members of Congress and their staff get their insurance in the “exchange,” OPM decided to treat Congress as a “small employer” eligible to participate in the “Small Business Health Options Program” where small business owners can provide a contribution to help employees buy Obamacare-mandated health insurance plans.

“OPM has been provided the statutory authority to administer health benefits to Federal employees (as defined in 5 U.S.C. 8901(1)),” says the regulation. “Because Section 1312 of the Affordable Care Act did not remove Members of Congress or congressional staff from the Chapter 89 definition of ‘employee,’ it is within OPM’s interpretive authority under Chapter 89 to clarify that a Government contribution may be provided to, and to establish the means for a Government contribution towards health benefits for, Members of Congress and congressional staff, just as we do for other Federal employees.”

In August, when it initially proposed this rule that would allow members of Congress and their staff to get a “government contribution” to buy their insurance in an Obamacare exchange, OPM released a question-and-answer sheet indicating that it expected members of Congress and staff to buy their insurance in the individual exchange.

"Will Members of Congress and congressional staff be able to enroll for health plan coverage as individuals or as members of a SHOP?" said one of OPM's questions.

The answer said: "Initially, OPM expects that Members of Congress and congressional staff will enroll in the individual market on Exchanges. However, OPM plans to work with stakeholders to determine whether employing offices could purchase insurance in the SHOP."

The same question-and-answer sheet said: "Members of Congress and their congressional staff ... will continue to receive a Government contribution toward the cost of their premiums for health plans purchased on the Exchange."

In the final rule, issued October 2, OPM clarified that the U.S. Treasury would pay for House members, Senators and their staff to get insurance in the small business exchange in the District of Columbia.

“The proposed rule was silent on whether eligible individuals would select qualified health plans through an Exchange in the individual or small group market by way of the SHOP,” said the regulation.

“Because a Government contribution is, in essence, an employer contribution, the final rule clarifies that Members of Congress and designated congressional staff must enroll in an appropriate SHOP as determined by the Director in order to receive a Government contribution,” it says. “SHOPs are designed to provide employer-sponsored group health benefits and are, therefore, the appropriate environment in which to provide an employer contribution to Members of Congress and congressional staff.

“Given the location of Congress in the District of Columbia,” says the regulation, “OPM has determined that the DC SHOP, known as the DC Health Link Small Business Market administered by the DC Health Benefit Exchange Authority, is the appropriate SHOP from which Members of Congress and designated congressional staff will purchase health insurance in order to receive a Government contribution. OPM intends to work with the DC Health Benefits Exchange to implement this rule.”

A webpage set up by OPM includes a “calculator” that allows members of Congress and their staff to determine the size of the “employer contribution” the U.S. Treasury will make on their behalf. It tops out at $948.18 a month, or $11,378.16 per year.

D.C. Healthlink—the D.C. Obamacare exchange where members of Congress will buy their federally subsidized plans—has a calculator that shows the cost of the plans for various types of families.

A Washington D.C. resident who is 57 years old with a spouse who is 53 years old and with three children will pay a premium of $1,493 per month, or $17,916 per year for a “Bronze” level plan on the Obamacare exchange, according to this calculator. If he and his wife both earn $55,250 per year, they will get $0 in federal subsidies.

However, a family headed by a congressman with the same demographics (and earning the congressman’s salary of $174,000) will get a subsidy of $11,378.16 from his "small business" employer—the Treasury of the United States.

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