Health Insurance Remains Confusing (via Progressive Farmer)

Despite the continued political battles over the Affordable Care Act, or “Obamacare,” it remains the law, the marketplace for insurance still exists and enrollment starts Wednesday.

Farmers in most of the country are left largely with the same health-insurance options they have faced in the past when it comes to the law, though a new experiment is starting in Minnesota with a farmer health-insurance cooperative.

The idea of a farmer health-care cooperative had been kicked around in Minnesota since 2009 but had faced multiple regulatory stumbling blocks. At the end of last year, Minnesota farmers complained to state lawmakers that the insurance exchange was collapsing down to one insurance option across much of the exchange and as many as seven counties in the state were looking at no insurance option. Minnesota lawmakers passed legislation last spring specifically allowing farmers and their employees to form a health-care cooperative.

“It will fill a need in the individual marketplace for the people who have gotten hammered by the premium increases,” said Gary Wertish, president of the Minnesota Farmers Union. “This is where all the farmers fall, and this is an attempt to correct that.”

HOW IT WORKS

The cooperative, called 40 Square, is a self-insurance plan that operates like most insurance policies with a deductible, copays and a percentage of out-of-pocket costs. Deductibles and out-of-pocket costs are waived for routine preventive care, and there are standard costs for prescription drugs. A summary of 40 Square plans offers annual deductible options for families from $3,000 to $13,100 in different plans.

To sign up for 40 Square, a Minnesotan has to farm and have at least one common-law employee — a person who receives a W-2 for working on the farm. If the insurance is attractive, a farmer who is a sole proprietor might consider working with an accountant to provide a seasonal contractor, or relative, with wages and taxes withheld to issue a W-2 rather than treat that person as an independent contractor with a 1099 form.

“If your spouse does the books and you issue him or her a W-2, you can consider the farm an employer with a common-law employee,” said Charlene Vrieze, project manager for 40 Square.

Farmers require an employee because the cooperative is regulated under a Department of Labor regulation dealing with employer-employee benefits.

Farmers also purchase stock to join the cooperative, which amounts to a $100 voting share stock and a $1,000 common stock, which will be paid throughout the first 12 months of membership in 40 Square. The cooperative also requires farmers to offer 40 Square insurance to employees for at least three years.

“That’s a requirement by the state because the state wanted to see as stable a pool as possible because it’s new,” Vrieze said.

The article can be accessed  by visiting https://www.dtnpf.com/agriculture/web/ag/news/article/2017/10/31/changes-farmers-minnesota-testing

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Health Insurance Option Run and Owned by Farmers (Red River Farm Network)

Access to health insurance is a huge issue for all farmers. The Minnesota Legislature passed legislation to provide a premium subsidy in the individual market. That, in turn, resulted in the creation of additional health care options to farmers and their employees through the 40 Square Cooperative.

“Open enrollment aligns with the individual market, and enrollment is November 1 through December 15,” says project manager Char Vrieze. To qualify, farmers must purchase stock in the cooperative and enroll for a minimum of three years. This option will be “owned by farmers and governed by farmers.”

Now is the Time for Dairy Producers to Engage on Farm Bill (Fred Starzyk, Heartland Advocates)

Early next year Congress will take up reauthorization of the Farm Bill reauthorization. This bill, up for renewal every five years, is one of the most comprehensive pieces of legislation with which Congress deals and is of great importance. It impacts everything from commodity payment mechanisms and crop insurance to trade, specialty crops and nutrition.

The 2014 Farm Bill included numerous programs which impact dairy farmers, including; the Margin Protection Program for Dairy (MPP), LGM-Livestock and the Dairy Product Donation Program (DPDP). The legislation also included the Environmental Quality Incentives program (EQIP) and additional conservation programs. This article will focus on the Margin Protection Program for dairy producers.

Congress mandated that the United States Department of Agriculture (USDA) implement a new margin protection program for dairy producers. The MPP is a voluntary program intended to provide milk producers with protection from low operating margins.

A key aspect of the MPP is creating a timely and transparent measure of an average dairy-production operating margin that is useful across all dairy regions. The MPP was passed as a replacement for the Milk Income Loss Contract (MILC) and is effective through December 31, 2018. The Margin Protection Program offers dairy producers: (1) catastrophic coverage, at no cost to the producer, other than an annual $100 administrative fee; and (2) various levels of buy-up coverage. Catastrophic coverage provides payments to participating producers when the national dairy production margin is less than $4.00 per hundredweight (cwt).

The national dairy production margin is the difference between the all-milk price and average feed costs. Producers may purchase buy-up coverage that provides payments when margins are between $4.00 and $8.00 per cwt. To participate in buy-up coverage, a producer must pay a premium that varies with the level of protection the producer elects.

There continues to be calls from the dairy sector for adjustments to the program. For example, dairy interests in the Midwest are advocating that the MPP should allow for additional production history for a participating dairy when a family member joins or when an inter-generational transfers occurs.

During debate of the 2014 Farm Bill, the National Milk Producers Federation (NMPF) sought a number of changes to the dairy MPP. These policy recommendations ranged from changing the way dairy feed costs are calculated, to providing farmers greater flexibility in signing up for coverage and using other risk management tools.

While these and other recommendations from the NMPF were not adopted by Congress in 2014, dairy producers from every region of the United States are once again lobbying for these and other policy initiatives as Congress and the Administration fully engage on writing the next Farm Bill.

Fred Starzyk is a Co-Founder and Principal of Heartland Advocates, a government relations and strategic communications firm with offices in Washington, D.C. and St. Paul, MN.

Client Spotlight: 40 Square Cooperative Solutions

40 Square Cooperative Solutions was created and registered with the Minnesota Secretary of State in 2009 and is working to bring additional health plan options to Minnesota’s farm families and their employees.

As a health plan cooperative, 40 Square will be owned by the members it serves.  In order to provide interested parties with as much information as possible regarding the plan, a series of informational meetings are being scheduled.

To learn more about 40 Square Cooperative Solutions, please visit http://40square.coop .

Health-care cooperative becoming a reality (via New Ulm Journal)

In a room filled with 75-plus agricultural producers and insurance representatives, the talk tends to focus on the current insurance crisis facing farmers across the state.

Such was the case Thursday evening at the offices of the Farmward Cooperative in Morgan.

Those in attendance were there to learn about another health insurance option for commodity producers.

Representatives of the newly-formed, but long-planned health-care cooperative called 40 Square were ready, willing and able to present and discuss a new health-care cooperative.

40 Square is a member-owned cooperative formed to assist agricultural producers in working together to help curtail the high cost of health insurance and health care.

Jeff Nielsen, president and CEO of United Farmers Cooperative (UFC), Winthrop, is a driving force in getting the new business off the ground.

“40 Square is a health-care cooperative,” Nielson said. “There is a need for this for farmers in the area. Healthcare is near and dear to your heart. It’s about time we can trust in the health care system. How many of you are good with our health care system today?”

Nielsen knows what he’s talking about when it comes to being a self-insured entity, which is what 40 Square was developed to be. He has been instrumental in keeping the insurance system at UFC as a self-insured system.

It’s working, and Nielsen is passionate about the opportunity being offered to producers of corn, soybeans, milk, meat and other commodities.

He knows there is a need for health insurance reform and believes it will work because “health insurance is the largest concern of the farmers I talk to.”

40 Square is a breath of fresh air for farmers struggling to find health insurance and then having to pay that monthly premium.

“Our rates keep going up,” commented Marge Schroeder, Renville. “Plus living in Renville County, we can’t go where we prefer to go. We cannot go to Mayo in Rochester.”

40 Square does have requirements to become a member-owner.

Members have to produce an agricultural commodity and have at least one common law employee. A common law employee is defined as someone who performs services for a business and that business controls what the person does, and how the person does it. The employer has to instruct the worker on when and where to do the work, what tools to use, where to purchase supplies and also provide the training to successfully complete the job.

Producers must sign up for at least three years.

Producers will purchase stock to become a member of the cooperative. One farm operation would purchase one share and earn one vote under the business structure. Any changes that need to be made will be voted on by the members.

The cooperative will be governed by a board of directors, consisting of ag producers, which would be elected by the voting members.

Because the cooperative is set up as a 308B Corporation, majority ownership must be from the members of the co-op. This means that member owners will control 51 percent or more of the business. The remaining 49 percent can be owned by outside investors.

40 Square members would purchase voting stock up-front for $100, per farm. Common stock, in the amount of $1,000, can also be purchased and can be paid for through the first 12 months of membership. The initial buy-in dollars will be placed into a trust.

“Those funds cannot be taken out of that trust for cooperative services,” Charlene Vrieze, project manager with 40 Square, said.

The trust would be set up to only cover claims placed by members. Business expenses will be covered by outside investors.

Vrieze has also been deeply involved with getting the concept of a health-care cooperative turned into an actuality.

“In Minnesota, we had to pass three pieces of legislation to proceed with our plan for 40 Square,” Vrieze said. “It’s been a long regulatory road.”

Terri Moxley, senior sales specialist with EBSO, explained how EBSO would assist as a third party manager of the business. (EBSO offers assistance “with management of an array of self-funded and fully insured benefit plans and products.”)

“We would make sure the plan is working and how we can change the plan to enhance it,” Moxley said. “The plan becomes tailored to those that are using it.”

Area producers would need to get in touch with their local insurance agents and accountants to pencil out the best option for their operation.

Also in attendance was Bob Skillings, a financial advisor with South Point Federal Credit Union, with an office in New Ulm. He’s excited to jump on board and help farmers decide what will work best for them.

“Hopefully this will be a good solution for farmers,” Skillings said.

Coverage under this new system begins with open enrollment starting Wednesday, Nov. 1, 2017 through Friday, Dec. 15, 2017. Coverage will begin Jan. 1, 2018 for those who chose to participate during open enrollment.

Interested individuals can also learn more and request information at 40square.coop.

 

Opinion: Pruitt, stick to Trump’s winning Renewable Fuel Standard plan (The Hill)

It has been well documented that rural America provided President Trump with his margin of victory. Indeed, 90 percent of the corn grown and 94 percent of the ethanol produced come from counties that voted for Donald Trump last November. While there were many factors, Trump’s consistent and enthusiastic support for ethanol and the Renewable Fuel Standard (RFS) were critical.

Trump’s support for the RFS has continued into his presidency, as he has maintained his vocal advocacy for ethanol and the administration has been aggressive in pushing back against trade barriers to U.S. biofuels and seeking input on regulatory reforms that would open a new era of investment and expanded market opportunities for American biofuels.

But the president’s vision for an America First energy policy that includes energy produced above the ground as well as below does not seem to be shared by his EPA Administrator Scott Pruitt. Over the past several weeks, Pruitt’s agency has proposed a reduction in the overall RFS (even after an inter-agency review approved a slight increase in the program), issued a Notice of Data Availability seeking comment on further reductions to the program under the specious justification that potentially lower imports should be reflected by a lower volume obligation.

Now there is further talk of lowering demand for ethanol by allowing oil companies to count ethanol exports as part of their RFS obligations, even though the program was designed to spur domestic biofuels consumption.

Apparently, Pruitt, whose political aspirations in his home state of Oklahoma are becoming more well-known, has not gotten the memo from the White House that the RFS is to be protected and allowed to grow the market for biofuels, while providing consumers with more choice and savings at the pump.

The driving force behind these “adjustments” to the RFS appears to be the administrator’s desire to lower the price of Renewable Identification Numbers (RINs), the credits used by obligated parties to ease RFS compliance. Oil companies who blend more than their renewable fuel obligation are able to trade credits to those companies not meeting their obligation with physical gallons of renewable fuels.

Not surprisingly, oil companies with surplus RINs don’t want changes to the program because they have a valuable asset. Oil companies that are short on RINs are looking for any number of ways to reduce their cost of compliance. Importantly, this is the very definition of inside baseball, because consumers never see an increase or a decrease in the price of gasoline based on the price of RINs. Simply put, for every gallon of gasoline sold to a consumer using a RIN for compliance, there is an oil company whose costs have been lowered by selling the RIN. RIN sales do not impact consumer gasoline costs.

Nevertheless, Pruitt has been looking for ways to accommodate those oil companies who are short on RINs, at a potential cost to those companies who made the investments allowing them to blend more biofuels than required.

So, how does he make both sides of the oil company divide happy? He proposes to lower the overall RIN obligation. Lowering the RFS to accommodate potentially fewer imports doesn’t drive investment in domestic energy; it lowers the cost of RINs. Allowing oil companies to count gallons of exported ethanol toward their RFS obligation doesn’t expand the market for ethanol; it artificially increases the supply of RINs and, again, abrogates the intent of the RFS.

If Pruitt wants to lower the price of RINs without cannibalizing the existing biofuels industry, there is a simple solution. Allow the biofuels market to grow, meaning more physical gallons of renewable fuel would be available for compliance and RIN values would fall. That’s what the RFS was supposed to do in the first place. And the easiest and most effective way to encourage more ethanol into the market would be to allow the use of E15 year round. EPA could simply extend the existing volatility waiver available today to only 10-percent ethanol to blends of 15-percent, 20-percent, or 30-percent blends. That would be consistent with the RFS, consistent with the administration’s objective of repealing outdated regulations that hamper growth and would empower consumers to make the correct fuel choice for their vehicle and their wallet.

Ethanol is cheaper than gasoline today. More than 90 percent of the vehicles produced sold today are fully warrantied for higher than 10-percent ethanol. And refiners looking to lower their cost of compliance with the RFS could do so easily. It seems like a win, win, win.

Mick Henderson is the general manager of Commonwealth Agri-Energy LLC, which operates a 35-million-gallon per year ethanol plant in Hopkinsville, Kentucky. Henderson is also chairman of the Renewable Fuels Association board of directors.

KDUZ Radio: Farm Forum

Dave Ladd, President of RDL & Associates, was recently a guest on KDUZ Radio’s “Farm Forum”.  He was joined by Bob Worth, Minnesota Soybean Growers Association and Mark Dorenkamp, Brownfield Ag News.

Topics included; buffer strips and conservation, federal tax reform, the North American Free Trade Agreement (NAFTA), and exports.

Dave Ladd formed RDL & Associates to assist clients seeking solutions to public policy issues, strategic communications and grassroots engagement.  He is also a Co-Founder of Heartland Advocates, which offers a team approach to help an organizations manage their political capital by engaging stakeholders and policymakers throughout the United States.

 

Media Release: Al-Corn Clean Fuel Members Vote to Become Limited Liability Company

Claremont, Minnesota – By an overwhelming majority the membership of Al-Corn Clean Fuel has voted to convert from a cooperative to a Limited Liability Company (LLC).  The results of the shareholder vote were announced this morning by Rodney Jorgenson, Chairman of the Board of Al-Corn Clean Fuel.

Al-Corn Clean Fuel, LLC will be acquiring all of its corn for operations on the open market through traditional pricing methods, as well as average pricing contracts and other methods as determined by management.

“Without our member’s willingness to grow and compete in an ever changing business environment, we wouldn’t be here today.” said Rod Jorgenson.  “We have begun moving forward to allow the conversion to become a reality while ensuring our current operations continue running smoothly”.

Al-Corn Clean Fuel, LLC is currently expanding and modernizing the Claremont facility from 50 million gallons per year to 120 million gallons per year, including storage for 1.5 million bushels of corn to facilitate deliveries.  Once complete, the expansion will require an additional 25 – 27 million bushels of corn annually.

“By increasing the production capacity of the Claremont plant, we will be able to drive down cost of production and reach better price markets.  The conversion to an LLC was necessary for Al-Corn Clean Fuel to realize the full potential of the expansion and modernization project” said Jorgenson.

For additional information regarding Al-Corn Clean Fuel visit www.al-corn.com.

About Al-Corn Clean Fuel

Founded in 1994, Al-Corn Clean Fuel, LLC is located in Claremont, MN.  On an annual basis, Al-Corn Clean Fuel grinds 17.5 million bushels of corn and produces 50 million gallons of ethanol.  The plant produces 132,000 tons of high protein livestock feed and 12 million pounds of corn oil.

The media release can be accessed here:

https://www.dropbox.com/s/3bd4svxzwgi7elh/Media%20Release%20-%20Transition%20to%20LLC%20%28September%202017%29.pdf?dl=0

Interview: Moving Disaster Funding Through Congress (RDL & Associates)

Upon their return to Capitol Hill, members of Congress were met with a congressional agenda laden with fiscal issues – including an emergency funding package in response to Hurricane Harvey.

Dave Ladd, President of RDL & Associates, was recently a guest on the Linder Farm Network to provide an overview of the process of moving emergency disaster funding through Congress.

This segment is 1:18 in length.