More Democrats voice Obamacare concerns as website blame goes around

1 of 2. A man looks over the Affordable Care Act (commonly known as Obamacare) signup page on the HealthCare.gov website in New York in this October 2, 2013 photo illustration.

Credit: Reuters/Mike Segar

By David Morgan and Mark Felsenthal

WASHINGTON | Wed Oct 23, 2013 8:22pm EDT

WASHINGTON (Reuters) - The contractors for the government's troubled healthcare website sought to deflect blame on Wednesday as more Democrats voiced concerns about the implementation of President Barack Obama's signature domestic policy.

Administration officials, in damage-control mode for nearly a week, held a closed-door briefing for Democrats in the U.S. House of Representatives and a private session with insurance company executives, who said they would assist in efforts to fix the Healthcare.gov website.

Websites are the primary vehicle for consumers to shop for insurance through exchanges set up under the healthcare program.

With the rocky launch of the "Obamacare" insurance exchanges entering its fourth week, additional Democrats came forward, some urging the president to extend the open-enrollment period for buying health insurance through the program beyond the existing March 31 deadline.

One Democrat, Senator Joe Manchin of West Virginia, said he would join a Republican effort to delay the so-called "individual mandate," that requires people to buy insurance or face a tax penalty.

Manchin, in a Fox News interview on the "The O'Reilly Factor," called for a transition year with no fines. "Let's work through the problems. We've got a lot of problems, they have been identified. I think everybody has recognized them. Let's fix it. Let's get together and fix things," he said.

White House officials said on Wednesday that enrollment requirements were being changed so that consumers could sign up for health insurance right up to the March 31 deadline and avoid penalties. Some people previously needed to be signed around February 15 to meet the end of March deadline.

A White House official said that pushing back the sign-up requirement was not related to glitches with Healthcare.gov, but was simply an effort to eliminate confusion over the two deadlines.

The comments from the handful of Democrats posed a new potential hazard for the White House and gave Republicans a chance to portray their efforts to derail the healthcare program as bipartisan.

Democratic Senator Mark Pryor of Arkansas, who faces a tough re-election race next year, said he agreed with fellow Democrat Jeanne Shaheen of New Hampshire that the open enrollment period to sign up for insurance should be extended beyond March 31, 2014.

Representative James Clyburn of South Carolina, the third-ranking House Democrat, criticized the website for forcing consumers to provide private information before deciding what kind of health insurance plan they want to buy.

"I've talked to too many people who tell me before they ever get around to figuring out what it is they want to buy, they're having to answer questions that they don't feel they should be answering," Clyburn said.

CONTRACTOR TESTIMONY

Republicans said they would intensify their investigations into the launch of the 2010 Affordable Care Act, known as "Obamacare."

"It is our job to hold them accountable, and when it comes to Obamacare clearly there is a lot to hold accountable," House of Representatives Speaker John Boehner told reporters.

The Republican-led House Energy and Commerce Committee on Thursday will hear from the top contractors responsible for the program. They included website developer CGI Federal, a unit of Canada's CGI Group Inc, which said in prepared testimony that the software from another contractor designed to allow users to create an account led to early bottlenecks.

But the other contractor, United Health Group unit Quality Software Services Inc (QSSI), said in prepared testimony that some of its problems stemmed from a late decision by the administration to require consumers to register for an account before browsing for insurance products.

"This may have driven higher simultaneous usage of the registration system that wouldn't have occurred if consumers could 'window shop' anonymously," said QSSI.

The company's software is now keeping pace with demand. Andrew Slavitt, executive vice president with QSSI's parent, said the software has had "error rates close to zero" since October 8.

Obama administration officials, including U.S. Health and Human Services Secretary Kathleen Sebelius, met with the chief executives of 14 leading insurance companies, including Aetna Inc, WellPoint Inc and Humana Inc.

The executives agreed to form new technical teams with the administration to help fix the website, which provide online access to the marketplaces designed to be the main way for millions of uninsured Americans to research and buy health insurance plans under the law.

"We had a candid discussion on the challenges facing the exchange, and the plan that is being put in place to get the program on track," Aetna Inc spokeswoman Cynthia Michener said.

The October 1 debut of the exchanges was marred by technical glitches that have kept many from signing on and making purchases. Those unable to sign up online can call a toll-free telephone number as an alternative.

The administration has so far declined to disclose the number of enrollments, either online or by telephone.

'WORKING HARD TO FIX THE PROBLEMS'

A prolonged delay in getting Healthcare.gov to work could jeopardize White House efforts to sign up as many as 7 million people in 2014, the first full year the law takes effect. The administration this week began what it called a "tech surge," bringing in experts led by the administration's top economic aide Jeffrey Zients to analyze and fix the problems.

"I think what we learned is they're working hard to fix the problems," Representative Sander Levin of Michigan, senior Democrat on the House Ways and Means Committee, said after Wednesday's briefing.

The U.S. Health and Human Services Department will begin regular news briefings on Thursday to provide updates on "the progress that's being made and on the efforts that are being undertaken, both to address the technical problems and to make the whole experience for American consumers better," White House spokesman Jay Carney said.

House Democrats said there was no discussion in the briefing about whether the problems should lead to a delay of the individual requirement that every American have insurance or pay a tax penalty. The Congressional Budget Office has estimated a delay would reduce enrollment significantly.

REPUBLICANS DEMAND DELAY

Republicans, who have fought the healthcare law as an unwarranted extension of the federal government, said the requirement should be delayed until the problems with the rollout are resolved.

"With so many unanswered questions and the problems arising around this rollout, it doesn't make any sense to impose this one percent mandate tax on the American people," House Majority Leader Eric Cantor told reporters on Wednesday.

Republicans have repeatedly tried to derail or delay the healthcare law since taking control of the House in the 2010 elections. They demanded more answers on Wednesday about the scope of the problems.

Three committees in the Republican-controlled House have announced investigations of the law's rollout, which Cantor described as "nothing short of a debacle."

(Additional reporting by Amanda Becker, Richard Cowan, Roberta Rampton and Susan Heavey in Washington, Caroline Humer in New York; Writing by John Whitesides; Editing by Fred Barbash, Karey Van Hall, Grant McCool and Tim Dobbyn)

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Race to get Obamacare online sites running goes to the wire

Get Covered America buttons are seen during a training session in Chicago, Illinois September 7, 2013 before volunteers canvas a Chicago neighborhood to talk with residents about the Affordable Care Act - also known as Obamacare. Picture taken September 7, 2013.

Credit: Reuters/John Gress

By Sharon Begley

NEW YORK | Sat Sep 28, 2013 11:52am EDT

NEW YORK (Reuters) - Just days before the launch of the new U.S. state health insurance exchanges that are the centerpiece of the Affordable Care Act, a nationwide push is still under way to test and patch the technology behind the online sites.

Officials working on the sites have acknowledged that information technology (IT) failures will prevent many of them from functioning fully for weeks, and perhaps longer. That will slow the government's drive to enroll millions of uninsured Americans under President Barack Obama's healthcare reform law starting Tuesday.

From a political standpoint, a successful opening day will shape perceptions of Obama's signature policy initiative. But the system's functioning is to a large extent beyond the control of politicians and policy experts, and instead sits in the hands of the battalions of coders working for IT sub-contractors.

Six months ago, people involved in setting up the exchanges were more hopeful that everything would be ready on time, said Cristine Vogel, an associate director at Navigant Consulting.

"I don't think there were enough hours in the day, or enough people with the skills," she said. "When we look back, I think we'll see that we missed an opportunity to share technology."

Opponents of the healthcare reform known as Obamacare say the computer problems bolster their view that the 2010 law is a "train wreck" and should be delayed or repealed. The Obama administration insists the exchanges will be open for business on October 1, even if some uninsured Americans may not be able to buy coverage right away. More importantly, they say, the new health plans will begin to provide health coverage on January 1, as planned.

"So long as the website is accessible and the plans and the plan information are displayed properly so a consumer can shop for coverage and compare the plans, they will claim victory," said Chris C1ondeluci, an employee benefits attorney at Venable LLP and a former staffer at the Senate Finance Committee who helped draft the Affordable Care Act.

FIRST-DAY CRASH?

This week, the Obama administration said its Spanish-language website would not be ready in time, and that it would be weeks before small businesses and their employees could sign up online for coverage on exchanges operated by the federal government.

The exchanges in Colorado and the District of Columbia, meanwhile, cannot calculate the amount of federal subsidies customers qualify for.

In New York, the exchange is not able to transfer data to some insurers instantaneously, as planned, one carrier told Reuters. Instead, the data will be sent in batches once a day or so. The glitch will not affect customers, but it raises questions that New York might have other IT problems.

Oregon had sufficient qualms about its online insurance marketplace that no one can enroll unless they use a trained, certified agent or other "community partner."

As late as this week, Oregon also had trouble correctly displaying information about insurance plans on a test site. The problem could mislead customers about deductibles, prices and other details if it occurs on the live site Tuesday.

In Ohio, Lieutenant Governor Mary Taylor, a fierce opponent of the healthcare law, said in a radio interview this week that her state's online exchange, which is being run by the federal government, could well crash on its first day.

In testing, she said, some plans filed by insurers "sat in a queue for the federal government for a week, so my concern is something similar is going to happen on October 1 because of the amount of (online) traffic."

WORKAROUNDS OFFERED, TAKE TIME

In most cases, exchanges will offer workarounds that will take time to execute. In Washington, D.C., off-line contractors will calculate federal subsidies and inform applicants what they qualify for in November, by which time the online calculator might be working.

In Colorado, until at least November, customers will have to call phone service centers, where representatives will manually take them through the calculations to determine what subsidies they qualify for.

Even before the exchanges open, the finger-pointing has begun, with states blaming contractors for glitches and contractors blaming states or other contractors.

The system to calculate federal subsidies for the D.C. exchange was built by Curam Software, which IBM acquired in 2011. In tests of complex family situations, the software was getting subsidies wrong 15 percent of the time, said exchange spokesman Richard Sorian.

In a statement, IBM spokesman Mitchell Derman said the city "decided that a phased-in approach best meets the needs of its citizens." He pointed out that Curam also built the eligibility software in Maryland and Minnesota, "two states that plan to have full functionality on October 1."

In other words, a company that achieved its goal on time in two states fell short in a third. The reasons, said outside experts, include relationships among contractors and the specifics of existing computer systems in a state.

In Washington, Infosys, the giant Bangalore, India,-based technology company, is the system integrator - the contractor that takes software from sub-contractors like Curam and puts it all together. The fact that Curam's calculation software is working on other exchanges suggests the glitch may not lie in its integration with the D.C. exchange's other IT.

"A software package like Curam's is put into the system by the system implementer, not the software provider," said an IT expert not involved in the D.C. exchange. A spokesman for Infosys was not able to comment on its D.C. work.

MEDICAID SYSTEMS POSE HUGE HURDLE

One of the most difficult IT jobs has been to integrate each health insurance exchange with its state Medicaid system. These legacy systems are typically decades old. In Massachusetts, for instance, the system runs on the COBOL programming language, which is to today's languages like a rotary phone is to an iPhone-5.

"These legacy systems are old and difficult to configure and re-configure," said Tom Dehner, managing principal at Health Management Associates, a healthcare consultant, in Boston and former director of Massachusetts Medicaid.

"To change how eligibility is calculated," as federal law now requires, he said, "you need to modify your Medicaid system, and that's not something you can do by buying software off the shelf."

The difficulty of interfacing with Medicaid will keep Colorado's exchange from calculating subsidies online.

To determine eligibility for federal subsidies, explained Nathan Wilkes, a member of the board of Connect for Health Colorado, the system "first goes through Medicaid determination. That means connecting to a legacy system," he said.

"Six or nine months ago we got an early warning that the way we wanted to integrate these systems wouldn't work, and then time got away from us."

Colorado's exchange tested 100,000 scenarios to see how its software calculated subsidies, and got error after error.

"It's an IT nightmare," Wilkes said.

(Additional reporting by Lewis Krauskopf and Caroline Humer; Editing by Michele Gershberg and Doina Chiacu)

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House approves one-year 'Obamacare' delay in spending bill

U.S. House Majority Leader Eric Cantor (R-VA) (C) walks into the offices of Speaker John Boehner (R-OH) (not pictured) during a rare late-night Saturday session at the U.S. Capitol in Washington, September 28, 2013.

Credit: Reuters/Jonathan Ernst

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As ad war heats up, White House pushes to enroll millions in Obamacare

By David Morgan

WASHINGTON | Tue Sep 24, 2013 7:37pm EDT

WASHINGTON (Reuters) - The White House on Tuesday kicked off a six-month campaign to encourage millions of Americans to sign up for health coverage under "Obamacare," an effort in which the president and other political celebrities promote the law's promise of subsidized health coverage.

But the massive public education campaign faces a long, difficult slog to persuade nearly 3 million healthy young people with low to moderate incomes to purchase private insurance. Many of them live in conservative, Republican-led states where opponents are spending millions of dollars to discourage enrollment in Obamacare's new, online health insurance marketplaces beginning October 1.

In promoting his signature legislative achievement on Tuesday, President Barack Obama sought to leverage his popularity among young adults by joining former President Bill Clinton - who also is popular with that age group - for a "conversation" in New York about healthcare.

First lady Michelle Obama and Vice President Joe Biden also are joining the Obamacare campaign, with separate appearances elsewhere. On Wednesday, former Secretary of State Hillary Clinton - who as first lady two decades ago led an unsuccessful attempt to revamp the U.S. healthcare system - will speak about healthcare at the annual meeting of the Clinton Global Initiative, her family's nonprofit foundation.

Next week, consumers in most states will begin to see more social media promotions from the Obama administration, targeting young adults in urban areas that are home to many of the nation's estimated 47 million uninsured people, according to senior administration officials.

The effort coincides with an expected $1 billion marketing initiative from health insurers, hospitals and health systems, as well as public outreach efforts by groups ranging from AARP, churches and charities to the Walgreen and CVS pharmacy chains, officials said.

"This is a Normandy invasion of the health system," said Uwe Reinhardt, a healthcare economist at Princeton University. "Eventually, lower-income people will be pleasantly surprised at how little health insurance will cost them with the subsidies."

Administration officials are confident that the Patient Protection and Affordable Care Act's initial six-month enrollment period, which runs through March 31, will meet its target of extending coverage to 7 million uninsured people, including 2.7 million adults aged 18-35 who are largely male and black or Latino. An estimated 33 million uninsured Americans could benefit from the program, officials say.

BIG SPENDING BY OBAMACARE FOES

The enrollment drive will have to overcome waves of ads from Republican, conservative and business groups that say Obamacare amounts to unwanted socialized medicine that will raise costs for businesses, eliminate thousands of jobs and force some people who already have health insurance to pay more for it.

Obamacare's critics already have launched a series of ads, ranging from sarcastic to fear inspiring, that are aimed at discouraging young adults from signing up.

Kantar Media's Campaign Media Analysis Group, which monitors political advertising, says that more than $500 million has been spent on Obamacare-related political advertising since the program became law in 2010.

Anti-Obamacare ads have outnumbered supportive messages by more than a 4-to-1 ratio, Kantar says. Analysts say the massive spending by Obamacare foes has contributed to Obamacare's shaky showing in recent opinion polls.

New Reuters/Ipsos polling data showed Tuesday that 46 percent of Americans disapproved of Obama's handling of the healthcare overhaul, passed by Congress four years ago.

Up to now, disapproval rates have not reflected the views of younger adults who could benefit from Obamacare. But over the summer, Obamacare's foes began targeting two major demographic targets for the administration: young people and women.

Generation Opportunity, a conservative group that appeals to the young, has two "Creepy Uncle Sam" videos that picture young Obamacare enrollees being confronted in a medical examination room by a sinister-looking Uncle Sam. In one, a smiling Uncle Sam startles a young woman during a gynecological exam.

"Don't let government play doctor," the video warns. "Opt out of Obamacare."

The same group intends to hold anti-Obamacare events on 20 college campuses in the coming months.

Americans for Prosperity, another conservative group, has spent millions on television ads in selected states that show mothers and other women worrying about whether their healthcare will suffer with the government "in the middle of things."

But opposition ads may have difficulty short-circuiting the Obamacare campaign, which will rely heavily on alternative channels such as the Spanish-language cable channel Univision, African-American radio stations, and the social media Web sites Facebook and Twitter.

Many of the administration's marketing targets are similar to those in Obama's 2012 re-election campaign.

"The Obama campaign proved in 2012 that they could defy everyone's expectations by turning out unexpectedly large numbers of young people and Latinos. They're certainly justified in feeling confident that they can do it again," said Elizabeth Wilner of the Campaign Media Analysis Group.

The White House's biggest hurdle could be informing people that benefits exist. Only about half of those who would gain coverage know about the benefits, organizers say, adding that most new enrollees may not sign up until 2014.

Others disagree, saying the rollout may do well in the 16 states that have their own healthcare marketplaces, including California, but that things might not go as well in conservative "Red" states such as Texas.

"California and Texas will look like different countries where healthcare's concerned," said Robert Blendon, who tracks the politics of healthcare at Harvard University.

"This is a local implementation issue," Blendon said. "It's not a president, first lady, Joe Biden issue. But they don't know what else to do, so they're going with the army they've got, and that's what they know from elections."

(Additional reporting by Caren Bohan, Mark Felsenthal, Roberta Rampton and Andy Sullivan; Editing by David Lindsey and Ken Wills)

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Computer snags delay parts of Obamacare in some U.S. states

By Sharon Begley

NEW YORK | Wed Sep 25, 2013 9:34pm EDT

NEW YORK (Reuters) - The District of Columbia's online health insurance exchange - one of 51 set up under President Barack Obama's healthcare reform law - will be unable to perform two key functions when it opens on October 1, exchange officials announced on Wednesday.

The District joins Colorado and Oregon on the list of "Obamacare" exchanges hobbled by problems with information technology (IT), contributing to expectations that Obama's signature domestic achievement will get off to a slow start when the exchanges go live next Tuesday.

The "DC Health Link" web-based marketplace, where residents of the nation's capital who do not have other coverage will be able to purchase policies, will lack the ability to calculate whether someone is eligible for Medicaid. It will also be unable to calculate the size of federal subsidies, if any, that a customer qualifies for.

Although numerous online tools created by nonprofit and other groups have offered subsidy calculators for months, "calculating subsidies for real is admittedly more complicated," said one expert. "For example, you have to make sure the family isn't eligible for Medicaid, and you have to collect more detail about their income. That said, I am frankly a little mystified why they couldn't get this right in time."

Under the law, someone whose income is less than four times the federal poverty level, or $45,960 for an individual and $110,280 for a family of five, can receive federal subsidies in the form of tax credits to defray the cost of monthly insurance premiums.

Subsidies are key to making the policies fit the budgets of many uninsured Americans, a primary goal of the 2010 Affordable Care Act. Without subsidies, sticker prices for an individual average $328 but can reach hundreds of dollars higher. But with them, according to the Department of Health and Human Services, an estimated 6.4 million people will be able to purchase policies for less than $100 per month.

Not being able to learn how much of a subsidy one qualifies for could therefore be a significant deterrent to applying for coverage.

"DC Health Link is not currently deploying the function that makes new Medicaid eligibility determinations and calculates tax credits," Mila Kofman, executive director of the DC Health Benefit Exchange Authority, said in a statement. The reason, she said, is "a high error rate discovered through extensive systems testing.

People who might qualify for Medicaid coverage or tax credits will be able to submit an online application for coverage if they are willing to do so without knowing what they'll be paying. Experts will determine their eligibility off-line and applicants will be notified in early November, Kofman said.

Her statement emphasized that DC Health Link "will open for business October 1" and said, "We are excited to announce that ... almost all functionality is operational for individual consumers." Only two sentences buried in the nearly 800-word statement mentioned the glitches.

D.C.'s setback is even more severe than other states'.

ACCURACY PROBLEMS

On Monday, employees running Connect for Health Colorado told board members that the exchange would not be able to calculate federal subsidies either, at least for the first few weeks.

Instead, Coloradoans who wish to buy a policy and learn their eligibility for subsidies will be directed to call customer service representatives, who will do the calculations manually.

Connect for Health Colorado was not "completely satisfied" with the accuracy of the tax credit calculations, said Ben Davis, an outside spokesman for the exchange. "There are 100,000 scenarios they want to test for" - combinations of income, family situation and other factors - "and it takes X amount of time. We just did not have enough time to test."

Colorado will therefore spend two more weeks testing the system "to make sure every possible scenario has been accounted for and providing an accurate response," Davis said.

Connect for Health Colorado will have 187 customer service representatives at its call centers throughout the enrollment period, which ends on March 31.

In another potential glitch, Oregon's exchange reported on Wednesday that its IT problems were causing information about policies that insurers plan to sell on Cover Oregon to appear incorrectly on a test site. As a result, crucial details such as deductibles are incorrect.

"We are in a validation process with our carriers," executive director Rocky King said.

State-based exchanges being run by the federal government reported similar display problems last month.

HHS spokeswoman Joanne Peters played down the IT snafus, saying in a statement that "there will be a marketplace open in every state and D.C. on October 1, where families can comparison shop for quality, affordable health coverage."

(Reporting by Sharon Begley, Lewis Krauskopf and David Morgan; Editing by Cynthia Osterman)

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As ad war heats up, White House pushes to enroll millions in Obamacare

By David Morgan

WASHINGTON | Tue Sep 24, 2013 7:37pm EDT

WASHINGTON (Reuters) - The White House on Tuesday kicked off a six-month campaign to encourage millions of Americans to sign up for health coverage under "Obamacare," an effort in which the president and other political celebrities promote the law's promise of subsidized health coverage.

But the massive public education campaign faces a long, difficult slog to persuade nearly 3 million healthy young people with low to moderate incomes to purchase private insurance. Many of them live in conservative, Republican-led states where opponents are spending millions of dollars to discourage enrollment in Obamacare's new, online health insurance marketplaces beginning October 1.

In promoting his signature legislative achievement on Tuesday, President Barack Obama sought to leverage his popularity among young adults by joining former President Bill Clinton - who also is popular with that age group - for a "conversation" in New York about healthcare.

First lady Michelle Obama and Vice President Joe Biden also are joining the Obamacare campaign, with separate appearances elsewhere. On Wednesday, former Secretary of State Hillary Clinton - who as first lady two decades ago led an unsuccessful attempt to revamp the U.S. healthcare system - will speak about healthcare at the annual meeting of the Clinton Global Initiative, her family's nonprofit foundation.

Next week, consumers in most states will begin to see more social media promotions from the Obama administration, targeting young adults in urban areas that are home to many of the nation's estimated 47 million uninsured people, according to senior administration officials.

The effort coincides with an expected $1 billion marketing initiative from health insurers, hospitals and health systems, as well as public outreach efforts by groups ranging from AARP, churches and charities to the Walgreen and CVS pharmacy chains, officials said.

"This is a Normandy invasion of the health system," said Uwe Reinhardt, a healthcare economist at Princeton University. "Eventually, lower-income people will be pleasantly surprised at how little health insurance will cost them with the subsidies."

Administration officials are confident that the Patient Protection and Affordable Care Act's initial six-month enrollment period, which runs through March 31, will meet its target of extending coverage to 7 million uninsured people, including 2.7 million adults aged 18-35 who are largely male and black or Latino. An estimated 33 million uninsured Americans could benefit from the program, officials say.

BIG SPENDING BY OBAMACARE FOES

The enrollment drive will have to overcome waves of ads from Republican, conservative and business groups that say Obamacare amounts to unwanted socialized medicine that will raise costs for businesses, eliminate thousands of jobs and force some people who already have health insurance to pay more for it.

Obamacare's critics already have launched a series of ads, ranging from sarcastic to fear inspiring, that are aimed at discouraging young adults from signing up.

Kantar Media's Campaign Media Analysis Group, which monitors political advertising, says that more than $500 million has been spent on Obamacare-related political advertising since the program became law in 2010.

Anti-Obamacare ads have outnumbered supportive messages by more than a 4-to-1 ratio, Kantar says. Analysts say the massive spending by Obamacare foes has contributed to Obamacare's shaky showing in recent opinion polls.

New Reuters/Ipsos polling data showed Tuesday that 46 percent of Americans disapproved of Obama's handling of the healthcare overhaul, passed by Congress four years ago.

Up to now, disapproval rates have not reflected the views of younger adults who could benefit from Obamacare. But over the summer, Obamacare's foes began targeting two major demographic targets for the administration: young people and women.

Generation Opportunity, a conservative group that appeals to the young, has two "Creepy Uncle Sam" videos that picture young Obamacare enrollees being confronted in a medical examination room by a sinister-looking Uncle Sam. In one, a smiling Uncle Sam startles a young woman during a gynecological exam.

"Don't let government play doctor," the video warns. "Opt out of Obamacare."

The same group intends to hold anti-Obamacare events on 20 college campuses in the coming months.

Americans for Prosperity, another conservative group, has spent millions on television ads in selected states that show mothers and other women worrying about whether their healthcare will suffer with the government "in the middle of things."

But opposition ads may have difficulty short-circuiting the Obamacare campaign, which will rely heavily on alternative channels such as the Spanish-language cable channel Univision, African-American radio stations, and the social media Web sites Facebook and Twitter.

Many of the administration's marketing targets are similar to those in Obama's 2012 re-election campaign.

"The Obama campaign proved in 2012 that they could defy everyone's expectations by turning out unexpectedly large numbers of young people and Latinos. They're certainly justified in feeling confident that they can do it again," said Elizabeth Wilner of the Campaign Media Analysis Group.

The White House's biggest hurdle could be informing people that benefits exist. Only about half of those who would gain coverage know about the benefits, organizers say, adding that most new enrollees may not sign up until 2014.

Others disagree, saying the rollout may do well in the 16 states that have their own healthcare marketplaces, including California, but that things might not go as well in conservative "Red" states such as Texas.

"California and Texas will look like different countries where healthcare's concerned," said Robert Blendon, who tracks the politics of healthcare at Harvard University.

"This is a local implementation issue," Blendon said. "It's not a president, first lady, Joe Biden issue. But they don't know what else to do, so they're going with the army they've got, and that's what they know from elections."

(Additional reporting by Caren Bohan, Mark Felsenthal, Roberta Rampton and Andy Sullivan; Editing by David Lindsey and Ken Wills)

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Five Costly Mistakes to Avoid With Obamacare

Organizations large and small are quickly running out of time to ensure that they are compliant with the Patient Protection and Affordable Care Act (PPACA), signed into law in 2010. Also known as the Affordable Care Act (ACA), major portions of the law begin to take effect next year. However, an employer's actions this year will have a significant impact on its ability to comply with the reforms in 2014 and the company's financial liability for noncompliance.

To date, discussion has focused on the topic of employers "playing" (buying health insurance coverage) or "paying" (being assessed the penalty) under the ACA. The majority of employers, which are likely to play, now need to be wary of costly errors that will result in companies playing and paying — buying health insurance for their employees and paying the ACA fines.

To understand the common errors, employers must have a basic understanding of the ACA penalties. Those penalties only apply to employers that employ 50 or more full-time employees, which are defined as employees who work 30 or more hours a week or the equivalent when all of the part-time employees' hours are aggregated.

There are two primary penalties, known generally as the "a" and "b" penalties. The "a" penalty applies when the employer fails to offer an appropriate health plan to substantially all of its common-law FT employees and their dependents. The term "substantially all" is generally defined as 95 percent of FT employees. The "a" penalty is calculated as $2,000 times the number of FT employees (minus the first 30 FT employees).

The "b" penalty occurs when the employer offers an appropriate health plan to substantially all of its FT employees and their dependents but the plan is either not affordable or does not meet the minimum value test and an employee goes to a government exchange and receives a subsidy to purchase health insurance. The "b" penalty is the lesser of the "a" penalty or the number of employees who receive a subsidy times $3,000.

1. Failing to Offer Coverage

At first blush, it would seem simplistic to ensure that an employer offers health care coverage to 95 percent of its FT employees. If, however, the employer misses the 95 percent mark — even by a fraction of a percentage point — the employer will pay the full "a" fine and the cost of the health insurance. Accordingly, employers should not be complacent with respect to the "substantially all" threshold and must be proactive to ensure that they have correctly accounted for all FT common-law employees. Easy employees to miss are those who are misclassified as independent contractors. There is no such creature as the "1099 employee," which is a fiction that places the employer at substantial risk under the ACA, as well as a plethora of employment and tax laws. Other easy-to-miss employees include temporary and certain leased individuals who might qualify as common-law employees. The employer must be precise in its classifications to ensure that it has accounted for all common-law employees and is, in fact, offering health insurance benefits to substantially all of those common-law FT employees. Otherwise, the employer will play and pay.

2. Failing to Offer Coverage

No, this is not a typographical error. The first two mistakes are the same but for very different reasons. Employers need to recognize that the determination of who is or is not a FT employee — working 30 hours or more per week — is measured right now in 2013 to determine and lock in the individual's FT status in 2014. Employers must have databases and payroll systems that allow them to accurately track, quantify and average hours, particularly if they have a variable-hour workforce. Failure to appropriately implement and conduct a 2013 measurement period and 2014 stability period under the ACA regulations is a potentially catastrophic error, particularly for employers with a significant number of part-time or variable-hour employees.

If the employer inadvertently misclassifies employees as part-time individuals and deems them to be ineligible for employer-sponsored health care insurance when they are actually working 30 or more hours a week, these employees will count as FT employees who weren't covered for purposes of the "substantially all" requirement. If enough of these employees are accidentally excluded from the plan, it could reduce the number of FT employees who are covered below 95 percent and expose the employer to the full "a" penalty. An employer's counting methodologies are critical and those methodologies must be in place now, or the employer risks making mistakes in classifying employees that will cause it to play and pay.

3. Misunderstanding the Term 'Dependents'

Historically, employers have had great latitude in choosing to offer employee-only, employee-plus-spouse and/or f?amily coverage. That flexibility has just evaporated. So have creative tactics such as the "birthday rules." These rules seek to keep children from enrolling in one parent's group health plan and purport to force the child onto the other parent's group health plan depending on which parent has the first birthday during the calendar year or based on some similarly arbitrary date determination. The ACA requires that plans offer (although they do not have to pay for) coverage to dependents. Interestingly, the ACA generally defines dependents as biological, step- and foster children up to age 26, but the reforms do not include spouses. A failure by a plan to offer dependent coverage will result in the employer playing and paying the full "a" penalty. The only exception is some brief transition relief, which will allow the employer to avoid the "a" penalty in 2014 if the health plan historically did not offer any dependent coverage and is diligently moving toward offering dependent coverage.

4. 'B' Penalty Can Apply Despite Offering Coverage

If an employer offers health care insurance that is either not affordable (generally, the employee contribution for employee-only coverage must be less than 9.5 percent of household income or the employee's W-2 wages) or does not meet the minimum value test (generally, the coverage must pay for 60 percent of the costs) and an employee obtains a subsidy from an exchange, the employer will be assessed the "b" penalty. The "b" penalty is equal to $3,000 per year for every employee who obtains a subsidy up to the amount of the "a" penalty that would apply in the absence of any coverage whatsoever. If a sufficient number of employees obtains subsidies, the "b" penalty will eventually equal the "a" penalty and, once again, the employer will play and pay.

5. 'A' and 'B' Penalties are Not the Only Consequences

Employers that are subject to the Employee Retirement Income Security Act and choose to play must document the material terms of the plan that they choose to offer. It is a regular occurrence to find employers that do not have the required plan document or summary plan description (SPD) or that mistakenly think the insurer's booklet on services is sufficient documentation. The U.S. Department of Labor is actively auditing health plans for compliance with the ACA, ERISA and a host of related laws. These audits can be complaint-driven or random. They are a painful and often lengthy process for the unprepared employer that does not have a legally compliant SPD, up-to-date plan documents, good records of participant communications and other important written information about the plan.

Similarly, employers need to be aware that employees can complain to the Occupational Safety and Health Administration and other government agencies if they feel the employer has failed to comply with the ACA. This will trigger an OSHA investigation. This is not an exhaustive list of other penalties and financial pitfalls, but it highlights that the "a" and "b" penalties are not the only ones to be concerned about. The unprepared employer who is playing and who is on the receiving end of an investigation may find itself with fines, attorney fees and related external/internal costs and will surely play and pay.

Complying with the ACA is a complicated process that requires careful planning and assessment. For employers of all sizes, the key is to understand the law and avoid the costliest mistakes so the company either pays or plays, but not both.

Anne Lavelle is a director and attorney in the labor and employment practice group with Cohen & Grigsby in Pittsburgh. Contact her at alavelle@cohenlaw.com.

This article originally appeared in The Legal Intelligencer.

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