On March 23, 2010 President Obama signed into law the Patient Protection and Affordable Care Act (also known as “Health Care Reform”). The intent of Health
Care Reform is to increase the quality and affordability of health insurance, lower the uninsured rate by expanding public and private insurance coverage, and
reduce the costs of healthcare. Some of the upcoming changes pursuant to Health Care Reform, many of which become effective January 1, 2014, include the following:
- Non Discrimination for Pre-Existing Conditions, Gender, or Highly Compensated Individuals. All health plans must offer coverage to everyone, regardless or health
status or other factors, and may no longer impose pre-existing condition exclusions or impose higher rates based on gender.
- Essential Health benefits. All non-grandfathered health plans must include the following benefits: ambulatory patient services, emergency services, hospitalization,
maternity and newborn care, mental health and substances use disorder services (including behavioral health treatment), prescription drugs, rehabilitative and
habilitative services and devices, laboratory services, preventive and wellness services and chronic disease management, and pediatric services (including dental
and vision care).
- No Annual Limits. All health plans are prohibited from imposing annual limits on essential health benefits.
- Individual Responsibility. Individuals are required to obtain minimum essential health coverage for themselves and their dependents or pay a monthly penalty tax
for each month without coverage.
- The Marketplace. Individuals and small businesses with up to 100 employees will be able to purchase affordable and qualified health insurance coverage through
state based exchanges. Individuals can complete an enrollment form beginning on October 1, 2013 with coverage effective January 1, 2014.
- Employer Shared Responsibility. Employers with 50 or more full time employees (including full time equivalent employees) will be required to offer full-time
employees and their dependents minimum essential coverage or pay a fine of up to $2,000 per year for each full time employee after the first 30 employees if
one of their employees obtains coverage from the Marketplace and receives a subsidy. If an employer does provide minimum essential coverage but it is not affordable
minimum coverage and at least one full time employee receives subsidized coverage from the Marketplace, then the employer will face a penalty tax of $3,000 for
each full-time employee receiving the subsidized coverage up to a maximum of $2,000 times the number of full time employees after the first 30 employees. The
effective date of this portion of Health Care Reform has been delayed until 2015.
- Automatic Enrollment. Employers with 200 or more full time employees that offer a health plan must automatically enroll new full time employees into one of
the plans that they offer. The Employer must give the affected employees notice of this automatic enrollment procedure and an opportunity to opt out. The
Department of Labor issued a technical release stating that employers do not need to comply with this provision until the Final Regulations are published.
The Final Regulations have yet to be published.
- Limitations on Cost-Sharing. Plans may not impose cost sharing amounts (i.e., co-pays, deductibles) with respect to essential health benefits that are more than
the maximum allowed for high-deductible health plans (currently these limits are $6,250 for self only coverage and $12,500 for family coverage). After 2014,
these amounts will be adjusted for health insurance premium inflation.
- Wellness Programs. Employers can offer employees rewards of up to 30% of the cost of coverage for participating in a wellness program and meeting certain
health-related standards. In the future, the government can increase this reward up to 50% of the cost of coverage.
- Transitional Reinsurance Fee. A fee charged to health insurance issuers and self-insured group health plans to fund the Transitional Reinsurance Program which
is designed to cover high-risk individuals in the individual insurance Market. This fee will only exist through 2016 and is in the amount of $63.00 per covered
life for 2014.
- W2 Reporting. Employers must report the cost of employer sponsored health benefits on the W2s for each employee.
- Reporting on Health Insurance Coverage. Insurers and employers will be required to provide reports to the IRS regarding the coverage that is provided in their
plan as well the number of individuals covered under the plan.
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