Thursday, October 10, 2013

Big Brother IS Watching!

In my previous post,"Government Shutdown: the Good, the Bad, & the Ugly..."I stated " This is NOT a political blog..." and I stand by that.

I have also stated that this blog is about the staffing industry, safety, risk, and technology. I cover this issues of risk and technology as they relate to the staffing industry and to safety. Risk does not only involve physical harm, but also financial harm, lawsuits, loss of profit, legal compliance, etc.

In another previous post,"Obamacare, the Gift that Keeps on Giving... and Taking" I covered the pandora's box that we are discovering that Obamacare is, and the potential risk that it puts employers in. Today I discovered another risk that it puts employers in.

Along with that, I also feel that I have to (also) voice the dangers that this puts the citizens of the United States in from our own government. Just as it would be wrong of me not to point out a worksite hazard, it is just as wrong of me not to point out the dangers of this law.

“It is the first responsibility of every citizen to question authority.”
Benjamin Franklin

 Furthermore, beyond the civil liberties issues, (the other risk to employers this law poses) IS related to this blog. I have also  want you to develop  Critical Thinking! Hopefully I have accomplished my goal.

“I do this real moron thing, and it's called thinking. And apparently I'm not a very good American because I like to form my own opinions.”
George Carlin

Obamacare Marketplace: Personal Data Can Be Used For ‘Law Enforcement and Audit Activities’

Oct. 8, 2013

Maryland's Health Connection, the state's Obamacare marketplace, has been plagued by delays in the first days of open enrollment.  If users are able to endure long page-loading delays, they are presented with the website's privacy policy, a ubiquitous fine-print feature on websites that often go unread. Nevertheless, users are asked to check off a box that they agree to the terms.

The policy contains many standard statements about information automatically collected regarding Internet browsers and IP addresses, temporary "cookies" used by the site, and website accessibility.  However, at least two conditions may give some users pause before proceeding.

The first is regarding personal information submitted with an application for those users who follow through on the sign up process all the way to the end.  The policy states that all information to help in applying for coverage and even for making a payment will be kept strictly confidential and only be used to carry out the function of the marketplace.  There is, however, an exception: "[W]e may share information provided in your application with the appropriate authorities for law enforcement and audit activities."  Here is the entire paragraph from the policy the includes the exception [emphasis added]:
Should you decide to apply for health coverage through Maryland Health Connection, the information you supply in your application will be used to determine whether you are eligible for health and dental coverage offered through Maryland Health Connection and for insurance affordability programs. It also may be used to assist you in making a payment for the insurance plan you select, and for related automated reminders or other activities permitted by law.  We will preserve the privacy of personal records and protect confidential or privileged information in full accordance with federal and State law. We will not sell your information to others.  Any information that you provide to us in your application will be used only to carry out the functions of Maryland Health Connection. The only exception to this policy is that we may share information provided in your application with the appropriate authorities for law enforcement and audit activities.

The site does not specify if "appropriate authorities" refers only to state authorities or if it could include the federal government, as well.  Neither is there any detail on what type of law enforcement and/or audit activities would justify the release of the personal information, or who exactly is authorized to make such a determination.  An email to the Maryland Health Connection's media contact seeking clarification has not yet been answered

The second privacy term that may prompt caution by users relates to email communications.  The policy reads:

If you send us an e-mail, we use the information you send us to respond to your inquiry. E-mail correspondence may become a public record. As a public record, your correspondence could be disclosed to other parties upon their request in accordance with Maryland’s Public Information Act.

Since emails to the marketplace could conceivably involve private matters regarding finances, health history, and other sensitive issues, the fact that such information could be made part of the "public record" could prevent users from being as free with their information than they might otherwise be.  However, as noted, any requests for such emails would still be subject to Maryland's Public Information Act which contains certain exceptions to the disclosure rules.

My View: The Risk to Employers:

According to the Fair Credit Reporting Act (FCRA), Consumer Reporting Agencies (CRAs) are entities that collect and disseminate information about consumers to be used for credit evaluation and certain other purposes, including employment.

In addition to the three big CRAs (Experian, TransUnion, and Equifax), the FCRA also classifies dozens of other information technology companies as "nationwide specialty consumer reporting agencies" that produce individual consumer reports used to make credit determinations.  

Under Section 603(x) of the Fair Credit Reporting Act, the term “nationwide specialty consumer reporting agency” means a consumer reporting agency that compiles and maintains files on consumers on a nationwide basis relating to:
  1. medical records or payments;
  2. residential or tenant history;
  3. check writing history;
  4. employment history; or
  5. insurance claims.

This designation makes CRAs and speciality CRAs subject to credit reporting and privacy disclosures to the subject of the report (i.e. your employee). I have mentioned before that if a accident investigation is conducted in a certain manner, that opens up the employer and (possibly) the safety investigator to provisions of the FCRA.

A Bad Situation...

Consider this scenario: an employer (in Maryland) gives full time employees a monthly subsidy to purchase health insurance in Maryland's Obamacare marketplace.

The question arises, what responsibility does the employer have to disclose that the market place "...information you (the employee) supply... may be shared... with the appropriate authorities for law enforcement and audit activities"?

More, and More Big Brother

Along with the "retaliation provision" in the Affordable Care Act (ACA) being administered by OSHA, the IRS is granted 46 new powers by the ACA (reference: the Galen Institute). These powers are:
  1. collecting taxes;
  2. distributing subsidies;
  3. collecting information;
  4. and enforcement.

Collecting Information:

  1. State Exchange Information Reporting: Requires state exchanges to send to Treasury a list of the individuals exempt from having minimum essential coverage, those eligible for the premium assistance tax credit, and those who notified the exchange of change in employer or who ceased coverage of a qualified health plan.
  2. Exchange Participation Requirement: Outlines the procedures for determining eligibility for exchange participation, premium tax credits and reduced cost-sharing, and individual responsibility exemptions.
  3. Taxpayer Information Disclosure: Authorizes IRS to disclose certain taxpayer information to HHS for purposes of determining eligibility for premium tax credit, cost-sharing subsidy, or state programs including Medicaid, including (1) taxpayer identity; (2) the filing status of such taxpayer; (3) the modified adjusted gross income of taxpayer, spouse, or dependents; and (4) tax year of information.
  4. Insurance Provider Information Reporting: Requires every person who provides minimum essential coverage to file an information return with the insured individuals and with IRS.
  5. Large Employer Information Reporting: Requires information reporting of health insurance coverage information by large employers (subject to IRC 4980H) and certain other employers.
  6. Medicare Beneficiary Information Disclosure: Authorizes IRS to disclose certain taxpayer information to the Social Security Administration (SSA) regarding reduction in the subsidy for Medicare Part D for high-income beneficiaries. (Conforming amendment)


  1. Health Plan Penalty: Imposes a penalty on health plans identified in an annual Department of Health and Human Services (HHS) penalty fee report, which is to be collected by the Financial Management Service after notice by the Department of the Treasury (Treasury).
  2. New Group Plan Penalty: Subjects new group health plans to certain Public Health Service Act requirements and imposes the excise tax on plans that fail to meet those requirements. (Conforming amendment)
  3. Group Plan Compensation Discrimination Prohibition: Prohibits group health plans from discriminating in favor of highly compensated individuals. (Complaints of discrimination investigated by OSHA) 
  4. Nonprofit Indicator System: Requires the independent institute partnering with the National Academy of Sciences (NAS) to implement a key national indicator system to be a nonprofit entity under section 501(c)(3).
  5. Small Business Exemption for Cafeteria Plans: Allows small businesses to offer simple cafeteria plans-plans that increase employees’ health benefit options without the nondiscrimination requirements of regular cafeteria plans. (Complaints of discrimination investigated by OSHA)
  6. Corporate Tax Advance: Increases the required payment of corporate estimated tax due in the third quarter of 2014 by 15.75 percent for corporations with more than $1 billion in assets, and reduces the next payment due by the same amount.
source: Americans for Tax Reform

ACA and Work Comp....    

....Who Knows?

How the ACA will affect work comp is till unclear.  Technically, Work Comp is a form of health insurance and a form of life insurance. Consider the following taxing powers afforded the IRS:
  • Tax on Health Insurers: Imposes an annual fee on any entity that provides health insurance for any U.S. health risk with net premiums written during the calendar year that exceed $25 million.
  • Excise Tax on Health Insurance: Imposes a 40 percent excise tax on high cost employer-sponsored health insurance coverage on the aggregate value of certain benefits that exceeds the threshold amount.
  • Individual Mandate Tax: Requires all U.S. citizens and legal residents and their dependents to maintain minimum essential insurance coverage unless exempted starting in 2014 and imposes a fine on those failing to maintain such coverage.
We still do not know (for sure) how these provisions apply to Work Comp. Once the IRS gets a hold on this, will they be sending out tax bills to WC carriers and self insured employers?

If the IRS deems that these provisions apply to Work Comp, that has the potential to double premiums.

Independent Contractors

The ACA adds another layer of danger, confusion and potential liability for those companies wanting to use independent contractors across the United States. The ACA may tempt employers to misclassify full time employees as independent contractors.

The ACA mandates that any employer with 50 or more full time equivalent employees is responsible for providing health insurance. Employers who hover around the 50 employee threshold may be tempted to intentionally misclassify workers (meaning incorrectly classify employees as independent contractors) to get around new expenses placed upon companies by the ACA.

The ACA does not require employers to provide insurance to part-time employees. However, part-time employees can be crucial in determining whether the employer meets the threshold number of employees (and therefore whether the employer is actually subject to the ACA). When an employer has 50 full time employees (or a combined total of 50 full time equivalent), the employer is subject to the tax under the ACA.

Independent contractors do not count as employees. Under the ACA, independent contractors do not count as employees when determining whether the employer meets the minimum threshold as a large employer.

Is Your Job, as a Safety Professional at Risk?

When the economy took a downturn, marketing and safety were hit the hardest. Now, with the ACA deadline approaching, are you, as a safety professional at risk of becoming an independent contractor or part time employee? Think of how many other safety professionals that you know who have lost their jobs.

It is common practice for companies that cannot afford a full time safety professional to utilize independent contractors for safety functions. Your company may pay you a little more, but your company will save on Work Comp, health insurance, and payroll taxes.  

Ask yourself; given the option of spending so much more, how likely is my company of re-hiring me as an independent contractor?

Will Health Insurance Replace Work Comp for Independent Contractors?

With all the mandates in the ACA, will health insurance replace Work Comp for independent contractors? If health insurers have to cove a wider range of injury and illnesses, then health insurance can act as WC (excluding indemnity). This will only provide additional incentive for companies to use independent contractors.

More Reporting

The ACA requires Employer Reporting of Insurance on W-2s: Requires employers to disclose the value of the employee’s health insurance coverage sponsored by the employer on the annual Form W-2.

The ACA further requires Insurance Provider Information Reporting: Requires every person who provides minimum essential coverage to file an information return with the insured individuals and with IRS.

Am I crazy?

Am I crazy?

Yes, but that does NOT mean I am wrong. Think about how the government handled things in the past...

George Orwell was Right

I am not going into a rant on how our government has eroded our civil liberties or trounced the Constitution, but I will put some links so that you can read more and think for yourself.

"The Laws That Make It Easy for the Government to Spy on Americans" from

"The Government Is Spying On ALL Americans’ Digital and Old-Fashioned Communications" from

Final Thoughts:

No one is sure yet how the ACA will work and how it relates to WC. I hope it does work. I hope it does not damage our WC system. Having health insurance will reduce WC claims.

You have heard the expression "read the writing on the wall..."

I, your friend and humble narrator, want to thank you for reading.

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