GSBE Weekly Update 08/30/2017
California lawmakers reach deal on affordable housing bond
Gov. Jerry Brown and legislative leaders agreed late Monday to a $4-billion bond aimed at the 2018 ballot that would fund low-income housing developments and subsidize home loans for California veterans.
“The bond agreement we have reached provides badly needed funding to help Californians, including our veterans, find safe, affordable housing,” Assembly Speaker Anthony Rendon (D-Paramount) said in a statement announcing the deal.
The decision comes as the Legislature considers a package of legislation designed to address the state’s spiraling housing affordability crisis. The bond measure, Senate Bill 3, is one of three key bills designed to increase state spending on low-income housing and ease local restrictions on home building.
SB 3 originally would have authorized $3 billion to support the construction of new homes for low-income residents. Changes to the bill announced Monday evening added $1 billion for home ownership subsidies for veterans through a program that would otherwise run out of money next year.
Monday’s decision is another step toward an agreement between the governor and lawmakers on a final housing deal. Senate Bill 2, which would add a $75 fee on mortgage refinancing and other real estate transactions to fund low-income home building, has been eyed skeptically by some Democrats in the Assembly. Changes to that measure are also expected.
Rendon and Senate President Pro Tem Kevin de León (D-Los Angeles) are also negotiating a 2018 bond measure to fund improvements to water and parks infrastructure.
SB 2 and 3 and a water and parks bond all need two-thirds supermajority approval in both houses of the Legislature. The deadline for all bills to pass this year is Sept. 15.
Bill Could Increase Health Care Costs Without Improving Patient Care
The Assembly Appropriations Committee next week will consider a bill that could increase health care costs by setting dialysis clinic staffing ratios to the most stringent in the country and mandating transition times between patients, leading to patient access issues with no clear evidence of clinical benefit to dialysis patients.
SB 349 (Lara; D-Bell Gardens) would establish minimum staffing requirements for chronic dialysis clinics and establish a minimum transition time between patients receiving dialysis services at a treatment station.
The bill would require chronic dialysis clinics to maintain certain information relating to the minimum staffing and minimum transition time requirements and provide that information, certified by the chief executive officer or administrator, to the department on a schedule and in a format specified by the department, but no less frequently than four times per year.
SB 349 would set staffing ratios for California dialysis facilities at a ratio stricter than any in the entire country.
Under this bill, the Registered Nurse ratio would be 1 RN for every 8 patients and the Patient Care Technician ratio would be 1 technician for every 3 patients. The bill sets social worker and registered dietician ratios as well.
Doubling the number of staff members at dialysis clinics significantly increases health care costs and since 90% of dialysis patients are covered under Medicare or Medi-Cal, which already is significantly underfunded, the likely result of increasing dialysis costs will be the loss of some dialysis clinics, the jobs that those clinics provide, and most important, the lifesaving treatment that patients receive at those clinics.
Additionally, the bill mandates the Department of Public Health to issue regulations setting an appropriate minimum transition time between dialysis patients, and if one is not set by 2020, the bill mandates a 45-minute transition time between dialysis patients.
No state currently mandates a specific transition time. The default 45-minute transition time between patients will likely result in the loss of an entire shift of patients treated.
Currently, dialysis facilities usually have four treatment shifts in one day because the facility must shut down to allow for regeneration of the water treatment system, which is used for treatment for the following day. Adding a transition time will displace patients who are treated during the fourth shift. More facilities will be needed to do the job that current facilities can handle.
The Senate Appropriations Committee analysis of SB 349 confirms that the mandates in the bill will likely “substantially increase the costs of providing dialysis care” in California. The analysis cites a study by researchers at the University of California, Davis which found that “expanding state-specific regulation of chronic dialysis clinics beyond federal requirements would be of uncertain marginal value.”
The Senate Appropriations analysis concludes that “it is not clear what the potential clinical benefit to patients would be from the increase in staff to patient ratios in the bill.”
SB 349 is scheduled to be heard in the Assembly Appropriations Committee on August 30.
IRS: ACA Employer Mandate Still in Effect
While the long-term future of the Affordable Care Act may be in doubt, the law’s application to employers remains largely unaffected by recent political developments.
Information letters recently released by the IRS Office of Chief Counsel, responding to inquiries about the status of the ACA’s employer shared responsibility requirements (the “employer mandate”), emphasize that these requirements remain effective. Therefore, an “applicable large employer” (an organization, or group of related organizations, that averaged at least 50 or more full-time equivalent employees in the prior year) could face penalties for failing to offer adequate health coverage to full-time employees and their non-spouse dependents.
The IRS information letters indicate that no waivers under the employer mandate are available, including for financial or religious reasons. The letters expressly acknowledge President Trump’s January executive order directing federal agencies to exercise any discretion permitted to them by law to reduce potential burdens imposed by the ACA. However, the IRS noted that the executive order “does not change the law; the legislative provisions of the ACA are still in force until changed by the Congress, and taxpayers remain required to follow the law and pay what they may owe.”
In light of the ongoing applicability of the employer mandate, employers should continue to track the hours of variable hour employees pursuant to an approved methodology under the ACA regulations to determine whether an employee must be treated as full-time for any coverage period, as well as for IRS reporting requirements. Relatedly, employers should be preparing for the reporting of health plan coverage information for 2017, due the first quarter of 2018. On August 3, the IRS released draft versions of Form 1094-B and Form 1095-B, used by coverage providers to report health plan enrollment, and of Form 1094-C and Form 1095-C, used to report information for IRS enforcement of both the employer and individual mandates under the ACA.