Summary of ResCoalition Report - June 2012
This week is
a big week for residential care providers so it seems fitting to send out an
update. First, the governor is passing a
budget giving back 3 of the 4.25% in cuts.
This is effective July 1, so congrats on the little July 4thbonus. Our strong advocacy both in
Sacramento and at the DDS stakeholder meetings made them understand the
severity of the fiscal crisis of what’s going on. Not only did we avoid any further cuts – keep
in mind $200 million in additional cuts were made to the DD system budget – but
the 3% is coming back.
The US
Supreme Court just upheld the Federal Patient Protection and Affordable Care
Act. This means that it is going to
become a significant issue for a lot of residential care providers and we need
to begin pushing it in Sacramento. The
law states that small businesses do NOT have to provide insurance for their
employees. Small business is defined as
less than 50 employees. The kicker
however is that it DOES require employees to buy health insurance or pay a
tax. So if you're self-employed or an
employee you will be required to buy health insurance or pay a tax for failing
to purchase it.
Regarding
the new Audit requirement: SB1259, the
audit bill, is dead for the year. Initially, Senator Liu's
staff recommended changing the bill to only allow vendors under 1
million dollars a one year waiver from the audit requirement IF they had an
unqualified the previous year. We thought there was agreement on an
amendment until another group proposed an alternative that was even more
flexible than ours - Senator Liu's office decided to stay
with the original amendment.
We're initiating dialogue
with Senator Liu's office to consider a new bill next year that would provide
relief. We're expecting late in the year that there will be some challenges to
the Audits because, while there is a requirement that they be done, there is no
compliance requirement. This means you can get the audit done when you
choose, not when the RC's are requesting it be done. If/when any action
is taken, we expect to challenge said action under the law. We have some
RC's saying they will not be "enforcing" any timeline, some saying
within 6 months of the end of the fiscal year, and some following ARCA's
recommendation which is 12 months after the end of the fiscal year.
As some of you know, we’re
encouraging members to consider whether they are going to do the Audit. We encourage members, if you're not going to
do the audit, to merely say your in process.
By saying you're in process, you are technically meeting the letter of the
law, thus cannot be punished. I understand
it is controversial so below is from CDSA (California Disabilities Services Association)
so you can see what other member groups (CDSA is primarily day programs,
ILS/SLS) are advising as well.
There is still work to do:With SB 1259's demise, existing law remains in force. That means that all agencies are required to secure CPA fiscal audits or financial reports beginning with the fiscal year in which your agency was operating in March of 2011.But existing law has no deadline for those audits to be completed or turned in.This lack of specificity means that there is no urgency for agencies to have the audits prepared and it gives us additional time to work with the department and others to try to unravel this problem and come up with a workable alternative.
- New and appropriate legislation to address the Audit issue
- Wage Order 5 issues
- Funding to cover medical insurance
- Return of the 1.25%
- Action to recommend should the Governor's tax increase not pass
