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Tuesday, November 30, 2010

The Developmental Disabilities Act


Umar Moulta-Ali
Analyst in Disability Policy

The Developmental Disabilities Assistance and Bill of Rights Act (commonly known as the DD Act) provides federal financial assistance to states and public and nonprofit agencies to support community-based delivery of services to persons with developmental disabilities. The DD Act defines developmental disabilities (DD) as severe, life-long disabilities attributable to mental and/or physical impairment. The aim of the DD Act is to help individuals with DD maximize their potential through increased independence, productivity, inclusion, and integration into the community.

Title I of the DD Act authorizes appropriations for (1) State Councils on Developmental Disabilities (SCDDs) that are tasked with developing state-wide plans on delivering services to individuals with DD; (2) Protection and Advocacy (P&A) systems, which investigate reported incidents of abuse and neglect of individuals with DD; (3) University Centers for Excellence in Developmental Disabilities (UCEDDs) that engage in applied research on DD; and (4) Projects of National Significance (PNS), which fund public nonprofits focused on enhancing the independence, productivity, and social inclusion of individuals with DD.

Title II of the DD Act authorizes competitive grants to help states strengthen their family support programs for families with a severely disabled family member. Title III of the DD Act authorizes one scholarship program to provide vouchers for post-secondary education for direct support workers who assist individuals with DD either through an institution of higher education or state agency. Title III also authorizes a grant program for the development, evaluation, and dissemination of a staff development curriculum.

Authorization of appropriations for the DD Act programs expired at the end of FY2007, although Congress has continued to provide appropriations for the programs. The 111
th Congress has not considered legislation to reauthorize the DD Act. This report provides background and funding information on DD Act programs, discusses evaluation activities, and summarizes recent legislative efforts related to the DD Act.


Date of Report: November 12, 2010
Number of Pages: 31
Order Number: RL34507
Price: $29.95

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1099 Information Reporting Requirements and Penalties as Modified by the Patient Protection and Affordable Care Act and the Small Business Jobs Act of 2010


Carol A. Pettit
Legislative Attorney

Edward C. Liu
Legislative Attorney


Generally, taxpayers are more likely to report items of income on their tax returns if they know that a third party has reported it to the Internal Revenue Service (IRS); therefore, expanding information reporting requirements under the Internal Revenue Code (IRC) can improve the collection of federal tax revenue. However, as those requirements are expanded, those who must comply with the requirements generally will face an increased administrative burden. Recent expansions of the reporting requirements in IRC § 6041 have been met by protests that the changes impose too great a burden, particularly on small businesses.

The Patient Protection and Affordable Care Act (P.L. 111-148; PPACA) and the Small Business Jobs Act of 2010 (P.L. 111-240; Small Business Act) both amended IRC § 6041, which requires payments totaling at least $600 in a single calendar year to a single recipient to be reported to the IRS. The required returns are generally Form 1099s, which are prepared by the entity making the payment and show to whom payment was made, the amount of the payment, and the general reason for the payment. The form is filed with the Internal Revenue Service (IRS) and a copy is provided to the payee. The form is required only when the payer is considered to be engaged in a trade or business and has made the payment in connection with that trade or business.

Beginning with payments made in 2011, § 2101 of the Small Business Act makes most landlords subject to the reporting requirements of IRC § 6041 by stipulating that, for purposes of IRC § 6041(a), they are considered to be engaged in the trade or business of renting real property, with certain exceptions. Landlords generally have not been considered to be engaged in a trade or business and, therefore, have not been subject to IRC § 6041. The Small Business Act also increased the penalties for failure to file an information return (IRC § 6721) and the penalties for failing to provide a copy of the information return to the payee (IRC § 6722). These changes will apply to any information returns required to be filed after December 31, 2010.

Beginning with payments made in 2012, § 9006 of PPACA changes the reporting requirements in two ways. Payments to corporations will no longer be exempt from reporting. Additionally, § 9006 expands the types of payments that will trigger the reporting requirement. Until 2012, the type of payment that most commonly triggers the reporting requirement is payment for services. Beginning in 2012, IRC § 6041 will also require reporting of payments for goods or other property as well as gross proceeds.

Various groups have asserted that the reporting requirements will be too burdensome on both the payer and the payees, and there have been several attempts to repeal § 9006 of PPACA (H.R. 5141, H.R. 5982, H.R. 6213, H.R. 6367, S. 3578, S. 3946 and several Senate amendments to H.R. 5297 and S. 510). For payments made by credit card, the reporting burden may be eased somewhat by a recent change in the law that will require payment settlement entities to report credit card payments and payments through third party networks (e.g., PayPal). Under Treasury Regulation 1.6041-1(a)(1)(ii), if reporting is required under IRC § 6050W, no reporting of the payment is required under IRC § 6041. Thus, payments made by credit card after December 31, 2010, generally will not be required to be reported by the payer.

Section 6041 of the IRC continues to draw the interest of Congress, and that interest has taken many forms. In addition to proposals to repeal PPACA § 9006, other legislation (S.Amdt. 4595 to H.R. 5297, S. 3783) has proposed modifying those provisions. Still other legislation (H.R. 5994, S. 3795) has proposed expanding the reporting requirements.



Date of Report: November 24, 2010
Number of Pages: 17
Order Number: R41504
Price: $29.95

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Monday, November 29, 2010

Federal R&D, Drug Discovery, and Pricing: Insights from the NIH-University-Industry Relationship


Wendy H. Schacht
Specialist in Science and Technology Policy

Public interest in approaches that might provide prescription drugs at lower cost, particularly for the elderly, has rekindled discussion over the role the federal government plays in facilitating the creation of new pharmaceuticals for the marketplace. In the current debate, some argue that the government’s financial, scientific, and/or clinical support of health-related research and development (R&D) entitles the public to commensurate considerations in the prices charged for any resulting drugs. Others view government intervention in price decisions based upon initial federal funding as contrary to a long-term trend of government promotion of innovation, technological advancement, and the commercialization of technology by the business community leading to new products and processes for the marketplace.

The government traditionally funds R&D to meet the mission requirements of the federal departments and agencies. It also supports work in areas where there is an identified need for research, primarily basic research, not being performed in the private sector. Over the past 25 or more years, congressional initiatives have expanded the government’s role to include the promotion of technological innovation to meet other national needs, particularly the economic growth that flows from the use of new and improved goods and services. Various laws facilitate commercialization of federally-funded R&D through technology transfer, cooperative R&D, and intellectual property rights. The legislated incentives are intended to encourage additional private sector investments often necessary to further develop marketable products. The current approach to technology development attempts to balance the public sector’s interest in new and improved technologies with concerns over providing companies valuable benefits without adequate accountability or compensation.

Some question whether or not the current balance is appropriate, particularly with respect to drug discovery. The particular nature and expense of health-related R&D have focused attention on the manner in which the National Institutes of Health (NIH) undertakes research activities. Critics maintain that any need for technology development incentives in the pharmaceutical and/or biotechnology sectors is mitigated by industry access to government-supported work at no cost, monopoly power through patent protection, and additional regulatory and tax advantages such as those conveyed through the Hatch-Waxman Act, the Biologics Price Competition and Innovation Act, and the Orphan Drug Act. Supporters of the existing approach argue that these incentives are precisely what are required and have given rise to robust pharmaceutical and biotechnology industries. It remains to be seen whether or not decisions related to federal involvement in issues related to pharmaceutical R&D will change the nature of the current approach to governmentindustry- university cooperation.



Date of Report: November 18, 2010
Number of Pages: 32
Order Number: RL32324
Price: $29.95

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Thursday, November 25, 2010

Grandfathered Health Plans Under the Patient Protection and Affordable Care Act (PPACA)


Bernadette Fernandez
Specialist in Health Care Financing

The Patient Protection and Affordable Care Act (P.L. 111-148, PPACA), as amended, includes provisions for the grandfathering of existing health insurance plans. Given that most Americans had private health insurance coverage on the date of enactment of PPACA, most Americans’ health coverage was affected by the grandfathering provisions.

A grandfathered health plan is an existing group health plan or health insurance coverage (including coverage from the individual health insurance market) in which a person was enrolled on the date of enactment. Therefore, as long as a person was enrolled in a health insurance plan on March 23, 2010, that plan has been grandfathered.

Current enrollees in grandfathered health plans are allowed to re-enroll in that plan, even if renewal occurs after the date of enactment. Family members are allowed to enroll in the grandfathered plan, if such enrollment is permitted under the terms of the plan in effect on the date of enactment. For grandfathered group plans, new employees (and their families) may enroll in such plans.

Grandfathered health plans are exempt from the majority of new insurance reforms under PPACA. However, grandfathered plans are subject to a handful of requirements: (1) uniform explanation of coverage documents; (2) medical loss ratio reporting and premium rebates; (3) prohibition on lifetime limits; (4) restriction on rescissions; (5) dependent coverage for children under 26 years of age; (6) prohibition on excessive waiting periods; (7) restricted annual limits; and (8) coverage for preexisting health conditions.

Enrollment in a grandfathered plan meets the individual mandate requirements that are effective in 2014.

On June 17, 2010, the Departments of Health and Human Services, Labor, and Treasury issued interim final rules with request for comments regarding grandfathered plans. The proposed regulation identified certain changes to benefits, cost-sharing, employer contributions, and access to coverage that would cause the loss of grandfathered status. It also clarified the loss of grandfathered status in either of the following instances: for a plan that did not have continuous enrollment (does not need to be the same enrollee), and termination of an existing collective bargaining agreement under which grandfathered health coverage was provided. In addition, the proposed regulation included transitional rules that provide some flexibility in allowing changes to be made to the terms of a plan or coverage after enactment that do not cause loss of grandfathered status, and analysis of the potential impact of grandfathering rules on group and individual health plans. Comments on the interim final rules were due by August 16, 2010. Among the issues that generated comments from different stakeholder groups (health plans, employers, consumers, and state regulators) are prescription drug formularies, provider networks, cost-sharing, plan design and funding, and plan disclose requirements.



Date of Report: November 17, 2010
Number of Pages: 14
Order Number: R41166
Price: $29.95

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Wednesday, November 24, 2010

Federal Employees Health Benefits Program: Available Health Insurance Options

The Federal Employees Health Benefits Program (FEHBP) provides health insurance coverage to about 8 million people. FEHBP provides many health insurance plan options for enrollees, including several nationally available fee-for-service plans, locally available Health Maintenance Organizations (HMOs), and, since 2003, various high-deductible health insurance plan options combined with a tax-advantaged account. Beneficiaries can use their tax-advantaged accounts to cover qualified medical expenses. Also, since July 2003, FEHBP-eligible active employees can place their own pre-tax wages into a Health Care Flexible Spending Account (HCFSA) to cover qualified medical expenses. Since 2007, eligible individuals may also elect supplemental dental and vision plans. While enrollees have a range of choices, they must decide which options best match their needs, the amount of their wages they will contribute to health insurance, and how risk-averse they are to potential out-of-pocket costs.

The program is administered by the Office of Personnel Management (OPM), which is statutorily given the authority to contract with qualified carriers offering plans and to prescribe regulations necessary to carry out the statute, among other duties.

The Patient Protection and Affordable Care Act (P.L. 111-148, PPACA, as amended by the Health Care and Education Act, P.L. 111-152) includes a number of provisions that require certain changes to be made to FEHBP plans or by employing agencies.



Date of Report: November 18, 2010
Number of Pages: 25
Order Number: RS21974
Price: $29.95

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