Health Care Exchanges in Virginia: State or Federal?

As the deadline to elect to set up a state-run health insurance exchange draws, closer, Virginia Gov. Bob McDonnell is holding firm with the plan to default to the federal exchange option.

The exchanges, which allow citizens to shop for private health insurance policies, are part of the Patient Protection and Affordable Care Act (PPACA) of 2010. States must decide by Dec. 14 whether to set up their own exchange or allow the federal government to run the exchange.

Virginia Senate Democrats called for McDonnell to schedule a special General Assembly session to discuss the exchanges. A McDonnell spokesman said that such a session would be expensive and that no decisions need to be made before the start of the regular session in January.

What do you think? Is it worth it for Virginia to set up its own exchange?

'Amazon Bill' Headed Nationwide?

The “Amazon bill,” which recently made it through the Virginia General Assembly and was signed into law by Gov. Bob McDonnell, could be going nationwide.
The Virginia Main Street Leadership Council (VMSLC) will lobby Congress to pass a similar bill in order to create a more level playing field between brick-and-mortar stores and online retailers such as Amazon. Currently, states can’t collect sales tax from an online retailer unless that retailer has a physical presence in the state.
Virginia’s new bill allows the Commonwealth to collect taxes from Amazon because of its warehouse and data center in Sterling. Prior to the bill’s passage, even that didn’t require Amazon to collect and remit sales taxes because the building did not handle sales. (Since then, Amazon has announced plans to open distribution centers in Chesterfield and Dinwiddie counties.)
Amazon has also agreed to similar rules in Texas and Nevada. But the VSMLC will push for a federal law that applies to all states, rather than the current piecemeal approach.
The new taxes collected will raise an estimated $24 million for Virginia’s state and local governments. What do you think? Will a national approach simplify matters for taxpayers?

Changes to Virginia Retirement System: On the Right Track?

Virginia Gov. Bob McDonnell recently approved sweeping changes to the Virginia Retirement System (VRS) while proposing several technical amendments to related bills. Changes include reduced pension benefits for employees with less than five years of service and an entirely new type of retirement plan for state and local employees hired after Jan. 1, 2014.

The changes, included in HB 1130, consist of three components:

• Changes in benefits effective Jan. 1, 2013 — including changes to requirements for years of service before retirement, the average final compensation and multiplier used to calculate benefits and a 3 percent per year cap on cost-of-living adjustments — for state and local employees hired since July 1, 2010, and current employees with less than five years of service
• Creation of a mandatory hybrid plan for all state and local employees hired on or after Jan. 1, 2014, except for hazardous-duty employees such as police and firefighters, that will combine reduced pension benefits and a 401(k)-style contribution plan
• A statutory commitment for the General Assembly and Governor to gradually adopt the same method of calculating retirement rates for teachers and state employees as the VRS Board of Trustees, with a requirement that the state must fully fund the VRS rates by 2018–2020

Click here to read more details on the changes at VSCPA.com. For more information, read an opinion article in Virginia Business magazine from VSCPA member Jim Shepherd, CPA. Bond-rating agency Moody's Investor Services said the reforms were "credit positive" (PDF).

What are your thoughts on the changes? Is Virginia on the right track to maintain control of its finances?