Does the new D.C. restaurant health exchange have the insurer backing it claims? Apparently not.

Jul 14, 2014, 2:59pm EDT Updated: Jul 14, 2014, 3:15pm EDT

Does the new D.C. restaurant health exchange have the insurer backing it claims? Apparently not.

Alisia Kleinmann, who spent years working in and around the restaurant industry, has founded industree, a networking opportunity for local food and beverage entrepreneurs.

Tina Reed

Staff Reporter- Washington Business Journal

When the Industree Exchange, a new health marketplace for restaurants with more than 100 full-time employees, went public last week, it said multiple affordable options would be available from major players like Aetna, Cigna and United Healthcare along with "skinny" bare-bones plans provided by Loomis.

But that caught some insurers by surprise. Namely Aetna, Cigna and United Healthcare.

In the days since the announcement, all three carriers told me they have nothing to do with the exchange and didn’t know anything about it until it was reported in local media.

What gives?

An Industree spokeswoman suggested the insurers were mistaken; they likely didn’t realize the exchange was set up in partnership with M&T Insurance Inc., using technology from Liazon to operate the exchange. M&T Insurance and Liazon footed the bill.

M&T offered a similar explanation, saying insurance companies are often so massive that one department may not realize what folks in another department are working on. The back and forth lasted much of last week.

When I circled back around Monday, I was told by M&T it was actually only Loomis and United Healthcare that were offering plans on the private exchange, with plans to include Aetna and Cigna later. United Healthcare responded again, saying it’s not offering a plan on the exchange.

That prompted Kevin Gannon, vice president of group benefits for M&T Insurance, to try to move beyond the providers, saying the private exchange is not just about the insurance plans. "It goes beyond the products," he said.

The system set up by Liazon offers online features for employees to choose the plan that works best for them using money provided to them by their employers. It handles all of the administrative work for those employers, and Industree hopes it fills a void in an industry that traditionally hasn’t offered great coverage, running on tight margins with armies of back-of-house staff.

Could it be a disappointing development in what some larger restaurant groups saw as a more affordable option to offering employees health insurance? Or is it just another example of how complex the world of health insurance really is?

Industree founder Alisia Kleinmann said she doesn’t understand the reason for the discrepancy, but said she’d received interest from plenty of carriers to offer plans on the exchange in the D.C. market.

"I’m 100 percent confident restaurants will be able to get full coverage for their employees," Kleinmann said. "If not through United, Aetna or Cigna, it will be another major carrier. And we will continue to offer those plans in other markets."

Tina Reed covers health care.


Muriel Bowser’s cautious D.C. mayoral campaign is rooted in arithmetic

Muriel Bowser’s cautious D.C. mayoral campaign is rooted in arithmetic

She is the only Democrat on the ballot in a mainly Democratic city.

Democratic D.C. mayoral candidate Muriel E. Bowser talks with voters as Fort Stevens celebrates the 150th anniversary of the Civil War battle fought there on July 12. (Bill O’Leary/The Washington Post)

By Mike DeBonis, Washington Post, July 14 at 9:20 PM

Since winning the District’s Democratic mayoral nomination in April, Muriel E. Bowser has pursued a time-honored strategy for a candidate seeking to retain the mantle of front-runner: Don’t mess up.

In the first four months of the general-election campaign, Bowser has avoided debates, offered few hard positions on the issues and filled her speeches with broad generalizations.

Bowser and her campaign chiefs say they are using the summer to extend their fundraising advantage, build their infrastructure and otherwise prepare for what they predict will be a hard-fought contest that will kick off in earnest after summer vacations are over and kids are back in school.

In a city with a 40-year streak of Democratic rule, Bowser (Ward 4) has reason to assume that she carries an advantage. But her refusal to engage with her opponents — including council colleague David A. Catania (I-At Large) and former council member Carol Schwartz — has alienated some voters, who are eager to learn more about all of the contenders in this unusually competitive general-election race.

“Voters deserve to know the views of the candidates. That’s the only way they can make a legitimate evaluation,” said Martha H. Mitchell, an advisory neighborhood commissioner and political activist who had hoped to organize a summertime debate in Bowser’s ward.

D.C. Council member David A. Catania, independent candidate for mayor, middle, meets with voters at the home of Sirraya Gant, right. (Mary F. Calvert/For The Washington Post)

Bowser’s campaign rebuffed the invitation, like several others, saying that she would not engage in any debates before the Nov. 4 ballot is set.

Catania, Schwartz and five other independent candidates are gathering voter signatures and need 3,000 to qualify. Depending on challenges to those petitions, the ballot may not be set until mid-September.

Mitchell, who said she is leaning toward supporting Catania, said she finds Bowser’s posture frustrating.

“People definitely do not want to wait to make a choice, and to wait all the way to September is a long time,” she said, noting that Catania and Schwartz repeatedly qualified for the ballot in past elections. “They want to know what’s she’s hiding, why they wouldn’t be willing to discuss the issues side by side.”

Bowser’s strategy is rooted in basic arithmetic: She is the only Democrat on the ballot, and 76 percent of the District’s 455,000 registered voters are Democrats. And non-Democrats are less likely to vote in general elections, according to a Washington Post analysis. In the 2010 mayoral general election, turnout among current Democratic voters was roughly 40 percent, while turnout among all other voters was about 23 percent.

In addition, polls published shortly before the primary showed Bowser with leads of 20 to 30 percentage points in a head-to-head race with Catania, and she registered a fundraising lead of $370,000 in June. Such advantages have left many in Bowser’s campaign privately convinced that the race isn’t nearly as competitive as Catania and the news media might like it to be.

Outwardly, however, Bowser’s campaign claims to be taking her competitors and the general-election race seriously. The quiet summer, advisers said, is more the result of the behind-the-scenes focus on building a formidable operation for the fall campaign.

Muriel Bowser has tried to remain out of the spotlight, declining to engage in debates. (Bill O’Leary/The Washington Post)

“If somebody is looking for high-profile media activity, no, we’re not doing that this summer,” said Bill Lightfoot, a lawyer and former council member who chairs her campaign. “Muriel is involved in the grunt work of the building a campaign. It’s not glamorous. It’s hard work, and it’s time intensive.”

Bowser’s highest-profile campaign moments since the primary have involved associations with popular political figures meant to ease voters’ doubts — saying she intended to keep Kaya Henderson as schools chancellor and unveiling Democratic former mayor Anthony A. Williams’s endorsement before an Independence Day parade.

She also seems to be trying to present a reassuring alternative to what she describes as Catania’s more inflammatory style.

Catania has taken a more outwardly aggressive approach to his campaign, attending near-daily meet-and-greet events in voters’ living rooms and pressing Bowser constantly on her record and on her political approach.

“As someone who has no record and no ideas, she risks a lot by engaging in a discussion,” Catania said in an interview.

“She’s taken the only strategy available to her. The last thing she wants to do is be exposed for her lack of substance.”

Last week, Catania introduced an emergency bill that would address the possible displacement of the mostly Chinese American residents of a 300-unit apartment building near Mount Vernon Square. In a subsequent interview, he questioned why he was taking action rather than Bowser, who is chairwoman of the council committee overseeing housing issues.

When Catania pressed the issue during Monday’s council meeting, Bowser dismissed it as “grandstanding.”

In an interview, Bowser drew a contrast with Catania. “People want a mayor that doesn’t fly off the handle or blow with the wind,” she said. “People are measuring my ability to lead, and, yes, part of my leadership is listening to all of the issues and making balanced decisions.”

That balance — and caution in taking a stand — has been on display in recent months as the council has debated the city’s 2015 spending plan.

One of the most controversial proposals extended the city’s sales tax to health-club memberships for the first time as part of a broader tax-cutting package — a move that generated major pushback among gym owners and patrons.

Ahead of a final vote on the budget last month, Catania proposed an amendment that would eliminate the “gym tax” or “yoga tax,” as opponents styled it. As Chairman Phil Mendelson (D) endeavored to keep his budget package intact, tax opponents canvassed the Wilson Building for support.

Ori Gorfine, chief operating officer for Balance Gym, a small D.C. chain, said Bowser was “in­cred­ibly noncommittal” when he and fellow advocates asked for her support before the vote.

“She basically said she didn’t know which way she was going to fall,” Gorfine said. “She said she didn’t support the wellness tax, but she wanted to hear everyone out.”

In the end, the council rejected Catania’s amendment on a 9-to-4 vote. Bowser voted for the amendment, but she did not speak in support of it from the dais.

The stakes are highest for Bowser on education. Catania, chairman of the council’s education committee, has used the issue as a political cudgel, and Schwartz has said she, too, would outflank Bowser on education matters.

After briefly seeming to endorse a wildly unpopular proposal to replace guaranteed neighborhood school placements with a citywide lottery system, Bowser has shied away from making pronouncements about an ongoing and deeply sensitive redrawing of public school boundaries and feeder patterns.

More recently, Henderson has criticized what she considers a lack of coordination between charter schools and the traditional school system she leads — putting a crucial question about the city’s future in the campaign spotlight.

Matthew Frumin, a Chevy Chase education activist who serves on the boundary review committee, said the education platform Bowser leaned on in the primary — an “Alice Deal for all,” a reference to the high-performing Northwest middle school — is “not nearly sufficient” for the general-election race.

But Frumin said that Bowser has been engaged with voters in his neighborhood and that Catania, while more facile on education policy matters, has not necessarily sketched out a more compelling vision for the city’s future.

“One can understand not wanting to debate in July and August,” he said of Bowser. “But, boy, is she going to have to come September and October.”

Ted Mellnik contributed to this report.

Ridesharing Critics Urge Caution As D.C. Regulation Put On Hold

Ridesharing Critics Urge Caution As D.C. Regulation Put On Hold

By: Martin Di Caro
July 14, 2014

Critics of ridesharing services like UberX and Lyft caution that you may not be covered by insurance in the event of a crash.

New regulations for the app-based, on-demand “ridesharing” services UberX, Lyft, and Sidecar in Washington are being put on hold until the fall.

Legislation being crafted by D.C. Council member Mary Cheh (D-Ward 3) will not be finished until after the council returns from its summer recess in mid-September, leaving riders in limbo over whether the drivers, who use their personal cars as taxis, are carrying adequate liability insurance coverage.

“I want them to understand there is ambiguity. There is risk. In the face of that, they can make a decision. My own decision, my own personal decision, would be not to use these services,” CM Cheh said.

At issue is whether the tech companies’ insurance policies would drop down and provide coverage in the event of a crash if and when a driver’s personal auto policy does not kick in, the “livery exclusion” written into standard policies.

At a May council hearing representatives of UberX, Lyft, and Sidecar argued their excess or umbrella policies were sufficient. They testified that requiring primacy commercial insurance would be cost-prohibitive and scare prospective drivers away, especially those who intend to drive only a few hours a week. Now, in mid-July, Cheh is leaning toward the stricter mandate the tech companies oppose.

“We have a proposal and we are trying to work out some compromises between the ridesharing folks, the taxicab commission, and other activists who are interested in what we do,” Cheh said.

“We think we’ve cobbled together a good bill but the problem is we don’t have time between now and recess to get it enacted. That means there will be this period of limbo over the summer. That may create some issues in terms of how the taxicab commission goes about enforcing rules, whatever rules they are going to enforce,” she added.

For its part, the D.C. Taxicab Commission does not have the authority to shut down UberX, Lyft, and Sidecar, and all three services continue to operate in Washington today. The commission, which shares Cheh’s view that current levels of liability insurance are lacking, intends to enforce rules against ridesharing drivers picking up street hails.

“We are in the process of developing a regulation that would accommodate these kinds of [private sedan] businesses, but we are timing our work on this to coincide with the council,” said commission chairman Ron Linton, who is seeking to limit rideshare drivers to 20 hours per week.

In the meantime, “they are not intended to do street hails. That’s the law as it exists,” Linton added.

When it comes to whether a rideshare passenger would be covered if injured in a crash, the chairman said: “The District of Columbia Taxicab Commission cannot ensure the users of that service that they are reasonably protected.”

Uber and its tech competitors are fighting regulators across the country. Officials in 18 states and D.C. have issued warnings to consumers about potential liability insurance gaps. In Virginia, the DMV issued a cease-and-desist order shutting down UberX and Lyft but is now working to lift that restriction so the companies can legally operate there.

In response to CM Cheh’s contention that consumers should tread carefully, Uber said its policies are industry-leading and its top priority is safety.

“Our $1 million policy per incident kicks in regardless of whether the driver’s personal insurance applies and it is covered at every point along the trip,” said Uber spokesman Taylor Bennett. “There is no ambiguity as it relates to our insurance policy or the safety of the Uber platform. The drivers are covered at every point in the duration of their trip.”

Insurance industry lobbyists say rideshare passengers injured in a crash caused by an UberX or Lyft driver may not find there is no coverage at all. Instead, there may be ambiguity over who is responsible for any claims, bringing in lawyers and potentially sending a dispute to court while an injured passenger waits indefinitely for compensation.

Uber’s competitors in the traditional taxicab industry say there is only one way to guarantee passenger safety.

“Stay away from this until the date these companies and their drivers possess primary commercial auto liability insurance coverage” said Dave Sutton, a spokesman for the Who’s Driving You? campaign, an effort of the Taxicab, Limousine, and Paratransit Association.

Broad new tax to fund D.C. health exchange challenged in court

D.C. Politics

Broad new tax to fund D.C. health exchange challenged in court

By Aaron C. Davis July 3 at 8:13 PM

A broad new tax to fund the D.C. health exchange is unconstitutional and the city should be barred from collecting it, according to a complaint filed Thursday in federal court by a national insurance industry group.

The lawsuit alleges that the tax recently approved to prop up the D.C. exchange — one of the nation’s costliest per enrollee — will drive up premiums for residents on dozens of insurance products that receive no benefit from the exchange.

In its filing in U.S. District Court, the American Council of Life Insurers calls the arrangement an illegal taking under the Fifth Amendment as well as a violation of the Affordable Care Act, which calls for state-run exchanges to be financially self-sufficient by the end of the year.

“We have a number of constitutional claims that all point in the same direction,” said Paul D. Clement, a former U.S. solicitor general under President George W. Bush, who is representing the insurers.

“Governments have a lot of freedom to impose taxes on the general population, but what they don’t have is the ability to make one group of people pay for something that they don’t get some benefit from.”

A spokeswoman for the D.C. Health Exchange declined to comment, but officials have previously defended the plan, saying that everyone benefits when more residents are insured.

Like the 14 states that started online marketplaces with funding from President Obama’s health-care law, the District has been grappling with an array of problems, including how to pay for the marketplace’s ongoing cost. Unlike the others, the city does not have enough customers buying polices to copy the funding strategy that most states and the federal government adopted: a tax of a couple percentage points on medical plans sold on exchanges.

A study recently pegged the D.C. exchange’s cost per enrollee at nearly $12,500, second only to Hawaii. D.C. exchange officials warned that to cover costs, a whopping 17 percent tax would be needed on every plan issued on the D.C. Health Link Web site. The leading insurers who offer plans on the Web site cautioned that such a tax could erase many low-income residents’ benefits of buying plans through the exchange.

As an alternative, exchange officials proposed spreading out the cost by taxing insurance products beyond those offered on the exchange: all health-related policies issued annually in the District. Mayor Vincent C. Gray (D) and the D.C. Council agreed.

Exchange officials have said they would soon begin collecting the 1 percent tax on long-term care, disability, vision, dental, hospital indemnity and dozens of other policies.

In all, in fact, the majority of the D.C. exchange’s roughly $28 million budget would be funded by taxes on products not sold on its Web site.

Insurers including Unum and Aflac have been among the most vocal opponents. They argue that their products — which in the event of a loss pay clients directly, not hospitals or doctors — are more financial planning tools than health insurance options.

“By seeking to fund the operation of the D.C. Exchange in this manner, the District is seeking to obligate certain companies to endow a State-sponsored marketplace for the exclusive use of a small subset of health insurance issuers,” read the complaint filed Thursday, which among others names Gray and Mila Kofman, the exchange’s executive director.

Kofman could not be reached Thursday to comment, but during the spring, while lobbying Gray and others to back the plan, she said that issuers of all affected policies would benefit from a well-running D.C. exchange — namely, a healthier society that cashes in on policies less often.

But Kofman also acknowledged that the District had no choice: “No other state needs to do this because they have a higher population,” Kofman said. “We are in a unique situation.”

Two states have smaller populations than the District: Vermont and Wyoming. Vermont is paying for its exchange in part by raising rates on paid insurance claims. Wyoming is utilizing the federal exchange, which charges insurers 3.5 percent of premiums collected on plans sold on the exchange.

In its complaint, the ACLI said the District’s unique need doesn’t give it the right to override the Affordable Care Act, which grants states the right to fund exchanges only through fees and levies on products sold on exchanges.

In a statement, Gary Hughes, executive vice president and general counsel of ACLI, which represents 300 insurers, stressed that the group isn’t trying to pick a fight with the Affordable Care Act.

“Our concerns are solely focused on how D.C. has chosen to fund its own exchange,” Hughes said. “Because these products are prohibited from even being sold on the exchange, the supplemental insurance carriers would be paying an assessment without seeing any benefit. In addition, the cost of the assessments will likely, and unfairly, impact the affordability of these products for consumers in the District of Columbia.”

Aaron Davis covers D.C. government and politics for The Post and wants to hear your story about how D.C. works — or how it doesn’t.