Tribes scramble to avoid $1 million in fines under Affordable Care Act

Diabetes patient Jay Littlewolf says he sought medical help for a diabetic ulcer at a Billings hospital after not receiving "adequate health care through the IHS in Lame Deer." He wants reimbursement from the IHS and sought Sen. Jon Tester's assistance.Photo/Larry Mayer, Gazette staff

Diabetes patient Jay Littlewolf says he sought medical help for a diabetic ulcer at a Billings hospital after not receiving “adequate health care through the IHS in Lame Deer.” He wants reimbursement from the IHS and sought Sen. Jon Tester’s assistance.
Photo/Larry Mayer, Gazette staff

By Tom Lutey, The Missoulian

BILLINGS – Montana’s Indian tribes, which until recently thought the Affordable Care Act would pass them by, could face fines exceeding $1 million for not offering insurance to employees.

Beginning in 2016, businesses with 50 or more full-time workers will have to offer at least a minimum amount of health insurance to employees. Those who don’t comply face tax penalties, and that includes tribal governments.

The requirement has been a surprise to tribes, said George Heavy Runner, Blackfeet Insurance Services health and wellness coordinator. As individuals, American Indians have the option of choosing not to follow Affordable Care Act rules. Many assumed tribal governments, which are sovereign, had that same option.

“We thought this was a ship kind of passing us by,” Heavy Runner said. “But it’s not just a ship passing through the night. We have been identified in this legislation, just not where we thought we would be.”

Tax penalties facing the Blackfeet Tribe for not complying could be as high as $1.1 million. Crow Tribal Chairman Darrin Old Coyote said the size of the fee depends on how many people a tribal government employs.

“If we don’t do the mandate, we’re going to be fined for the number of employees we have, and that number could be up to $1.5 million,” Old Coyote said. “We pay federal tax, and our employees pay federal tax and so we’re part of the large employer mandate.”

The tribes can avoid the fees by offering the insurance to their workers. Old Coyote said the Crow have hired a benefits manager to do just that.

***

The change caught tribes off-guard because American Indians by treaty receive health care via the Indian Health Service on reservations. IHS is much maligned by tribal members for not providing adequate health care and for not covering services by specialists outside the IHS program.

Because IHS is limited, tribal members who work for their government would benefit from having other health care, Old Coyote said. The challenge is having a health care plan to offer by next year.

Suing to get off the employer mandate has already been tried. In February, Wyoming’s Northern Arapaho Tribe failed to convince a federal judge to block the employer mandate. The Northern Arapaho argued that subjecting tribes to the employer mandate was an oversight that overlooked treaty rights related to Indian health care, while also stating that tax credits and benefits granted to Indians under the Affordable Care Act would be denied.

Earlier this month, U.S. Sen. Steve Daines, R-Mont., and U.S. Rep. Ryan Zinke, R-Mont., announced a bill to exempt tribes from the employer mandate. Daines called the mandate a job killer for tribal governments, who wouldn’t hire as many employees if they had to pay significant penalties.

Other sponsors of the bill, such as Republican Sen. John Thune, of South Dakota, said it was unfair to exempt individual tribal members and not exempt tribal governments as well.

However, exempting tribes from the employer mandate won’t help the nagging problems with Indian health care, said a representative for Sen. Jon Tester, D-Mont.

“This bill does nothing to solve the underlying problem, which is crisis-level health disparities among Native Americans,” said Marnee Banks. “If we are serious about increasing access to quality health care in Indian Country, we will expand Medicaid and adequately fund the Indian Health Service.”

***

IHS spending on Indian patients was $2,741 per person in 2013, according to the National Congress of American Indians, which asserts that IHS is severely underfunded. Medicaid spending, by comparison was $5,841.

The state of Montana is awaiting federal approval of the state’s plan to begin offering Medicaid to Montanans earning up to 138 percent of the federal poverty level.

Medicaid expansion would extend benefits to as many as 11,000 tribal members over the next four years, said Jon Ebelt of Montana’s Department of Public Health and Human Services. The program would benefit tribal health care in general, Ebelt said.

“Medicaid expansion revenue will be critical for building health infrastructure, expanding the workforce, and keeping health care providers in tribal communities,” Ebelt said. “Medicaid revenues will bring new funds to the programs and further investment in the Indian health system infrastructure and workforce. This is an opportunity to provide more health care services, create more jobs and employ more Native Americans in tribal communities.”

Old Coyote said he’s concerned that state benefits representatives won’t be able to clearly explain the expanded Medicaid program to some Crow Indians who speak Crow as their primary language. He’s asked the state to provide a benefits representative who is fluent in Crow.

Ebelt said the state is able to provide translation assistance if necessary and in determining an outreach plan with members of the Indian Health Service at Crow Agency.

Zinke attempts to block plans to increase royalties on public coal

U.S. Rep. Ryan Zinke, left, laughs with Darrin Old Coyote, chairman of Montana’s Crow Tribe, during Thursday’s announcement in Billings of a proposal to make permanent a tax break for coal mined from reserves owned by American Indian tribes. Westmoreland Coal Company produced 6.5 million tons of coal last year from the Absaloka mine on the Crow’s southeastern Montana reservation. Photo/ AP

U.S. Rep. Ryan Zinke, left, laughs with Darrin Old Coyote, chairman of Montana’s Crow Tribe, during Thursday’s announcement in Billings of a proposal to make permanent a tax break for coal mined from reserves owned by American Indian tribes. Westmoreland Coal Company produced 6.5 million tons of coal last year from the Absaloka mine on the Crow’s southeastern Montana reservation.
Photo/ AP

By Tom Lutey, The Montana Standard

U.S. Rep. Ryan Zinke, R-Mont., is attempting to block federal government plans to increase royalties that companies pay for coal, oil and gas taken from public lands.

Zinke, citing concerns about the coal economy and prosperity on Montana’s Crow Indian Reservation, proposed blocking funding to the U.S. Department of Interior, the agency charged with making sure the public receives a fair price for its coal.

Interior has been working on a possible increase in royalties collected. Zinke’s proposal, introduced Tuesday night as an amendment to the Department of Interior budget, would prohibit DOI from continuing to spend money on its royalty work. His concern with DOI’s proposal is that it will discourage future coal mining.

“In my home state of Montana, the Crow Nation suffers from unemployment rates as high as 50 percent — despite having over a billion dollars in coal reserves,” Zinke said on the House floor. “Similar situations play out in communities across America. This administration has waged a war against coal. In the words of Crow Chairman Old Coyote, ‘A war on coal is a war on the Crow people.’”

Battle lines over coal royalties in Montana were drawn months ago when the Department of Interior first suggested that Americans weren’t getting a fair price for coal mined from public land.

The federal royalty rate on coal from open pit mines on public land is 12.5 percent. States where mines are located receive half of what’s collected. Concerned that the public wasn’t getting its full share from those sales, DOI’s Office of Natural Resources Revenue began scrutinizing payments in 2007. It concluded that coal royalty rules, which hadn’t been updated since 1989, were due for revision in part to “provide early certainty to industry and ONRR that companies have paid every dollar due.”

Groups like Bozeman-based Headwaters Economics say the public has been shorted $850 million under the current royalty scheme.

Those who believe coal companies aren’t paying a fair price for public coal say companies have created subsidiaries to sell coal to at low prices in order to keep royalty payments down. Rep. Betty McCollum, D-Minn., made that point Tuesday night, urging House lawmakers to reject Zinke’s amendment. McCollum said royalties need to be based not on sales to subsidiaries but rather independent buyers who pay considerably more for coal. This is particularly a concern when coal is sold for export, McCollum said.

“It’s now been three years since it was first reported that coal companies were skirting federal royalty payments by selling coal to sister companies,” McCollum said. “These low royalty evaluations especially hurt Native Americans who depend on these royalties for their income.”

Currently, royalties are assessed when the coal is sold at the mine. That method works when coal companies are in fact selling to other companies, but sometimes the buyer at the mine gate is a subsidiary of the mining company. The coal company is essentially selling coal to itself, and its subsidiary ultimately resells the coal for a higher price.

Asian buyers from Japan and South Korea don’t purchase coal at the mine gate but rather at Pacific Northwest seaports. The DOI would like to see royalties determined at the port sale.

Coal companies counter that coal prices are higher at port because of the costs associated with delivering the coal from the Powder River Basin in Wyoming and Montana. A royalty based on that sales price would be a tax on the coal subsidiary’s transportation costs, as well.

Interior officials would like to set the royalty amount by default if one can’t easily be determined. That proposal worries coal companies — and Zinke. Both say the default amounts will be too arbitrary and costly.

Both Republican and Democratic officials from Wyoming and Montana have expressed concern about changing the current royalty scheme. Montana Gov. Steve Bullock, a Democrat, wrote Interior months ago about the risk of creating too much uncertainty by changing the royalty scheme.