Post by AlwaysAnAztec on May 17, 2010 12:48:57 GMT -8
Below, I've pasted the analysis / time line of the health-care bill which is being presented to my employer by our insurance broker. My opinion, which hasn't changed, is that this bill is a massive subsidy for the health-care insurance industry.
Health Care Reform
Patient Protection and Affordable Care Act
What the New Legislation Means for Employers
Federal Health Care Reform: Impacts on Employers
Most of the provisions that will have a major impact on the health insurance marketplace such as the new framework for health insurance products are not scheduled to go into effect until 2014.
Many of the deadlines outlined in this document are calculated from the date of the act¡¦s enactment, March 23, 2010. For example, most of the effective dates in 2010 apply to plan years beginning on or after six months after the date of enactment (or September 23, 2010).
It is also important to note that many of the provision in the act instruct federal agencies such as Health and Human Services (HHS) and the IRS to define details, issue implementation guidelines or regulations, and resolve ambiguities. Such a process is typical with enacted legislation, and while a few guidelines have been issued, many of the provisions with near term implementation dates have yet to be defined.
Where interpretation of the law is unclear, employers should consult their legal counsel for guidance.
Implementation Timeline 2010
Immediate Changes:
Grandfather Plans: Individuals and employer group plans that wish to keep their current policy on a grandfathered basis can only do so if the only plan changes made are to add or delete new employees and any new dependents (collective bargaining agreement may be an exception).
Phase 1 of the Small Business Premium Tax Credit:Eligible small businesses (no more than 25 FTEs with annual wages of less than $50,000) are eligible for a tax credit for up to two years if the employer contributes at least 50% of the total premium cost.
Medicare Part D: Employers that provide a Medicare Part D subsidy will have to account for the future loss if the deductibility of this subsidy on liability and income statements.
(Within 6 months of enactment):
Dependent Coverage: Health plans that provide dependent coverage will be required to provide it up to age 26. For coverage of these non-dependent children prior to 2014, the requirement would be limited to those adult children without an employer offer of coverage.
Eliminates Pre Existing Conditions Exclusion for Children:Health plans would be prohibited from excluding coverage of pre-existing conditions for children. This provision will apply to all people in 2014.
Ban on Lifetime Limits: The Law prohibits insurers from imposing lifetime limits on benefits.
Ban on Discrimination Based on Pay: The law prohibits new group health plans from establishing any eligibility rules for healthcare coverage that have the effect of discriminating in favor of higher wage employees.
Rescission: Health plans will be prohibited from rescinding coverage for all health insurance markets (including self funding), except for cases of fraud or intentional misrepresentation.
Preventive Care:All group and individual plans, including self funded plans, will have to cover specific preventive care services with no cost sharing, and cover emergency services at the in network level regardless of provider.
Wellness Programs:Federal grant program for small employers providing wellness programs to their employees will take effect.
Implementation Timeline 2011
Over The Counter Medications: OTC drugs will no longer be reimbursable under HSAs, medical FSAS, HRAs and Archer MSA unless they are prescribed by a physician.
Long Term Care:All employers would be required to enroll employees in a new national public long-term care program, unless the employee opted out.
Federal Income Tax:All business owners would be subject to new expanded federal income tax requirements on payments of fixed or determines income or compensation.
Premium Tax:Premium Taxes on most private health insurers based on premium volume take effect, which can be passed directly down to fully insured plan consumers. This tax does not apply to self-insured plans, governmental entities (other than those providing insurance through the Act¡¦s community health insurance option), and certain non profit insurers of last resort or nonprofit insurers with a medical loss ratio of 90% or more. (The reconciliation package would delay this provision until 2014 but increase the amount of fees once they become effective).
Self-Insured Data:The Department of Labor will begin annual studies on self-insured plans using data collected from Form 5500.
Implementation Timeline 2012
Summary of Benefits:All group and individual plans (including self-insured plans) will have to provide a summary of benefits and a coverage explanation that meets specified criteria to all enrollees when the apply for coverage, when they enroll or re-enroll in coverage. Any material modification of the terms of the coverage must also be provided. There will be a $1,000 per enrollee fine for willful failure to provide this information.
DHHS reporting:All group plans (including self-insured plans) and all individual and group carriers will have to submit reports to the secretary of DHHS on whether or not the benefits provided under their plans meet criteria to be established by the DHHS on improving health outcomes, preventing hospital re-admissions, improving patient safety and reducing medical errors, including wellness and health promotion activities.
Implementation Timeline 2013
Medicare Payroll Tax:The Medicare payroll tax increase of .9% above $200,000 for individuals and $250,000 for joint filers will go into effect. (The reconciliation act would also levy a new 3.8% Medicare contribution on certain unearned income from individuals with AGI over $2000,000 a or $250,000 for joint filers).
Tax Returns:The threshold for deducting unreimbursed medical expenses will increase from 7.5% of AGI to 10% of AGI (will be waived for those over age 65 and older through 2016).
State-based exchanges:All employers must provide notice to their employees of the existence of the state based exchanges.
Flexible Spending Accounts:FSA contributions for medical expenses are limited to $2,500 per year, with the cap annually indexed for inflation.
Implementation Timeline 2014
Automatic Enrollment:The legislation will require that employers with more than 200 employeesautomatically enroll full-time employees in health coverage. The legislation will allow employees to opt-out of the coverage after automatic enrollment. (The effective date of this provision is unclear and may take place earlier).
Individual Mandate:The Individual mandate requirement to purchase health insurance for all citizens and legal residents takes effect. All employer plans, including self-insured plans, will have to provide documentation of coverage to all covered employees, and their dependents and the IRS.
Employer Requirement: The legislation will require an employer with more than 50 FTEs to pay $2,000 per employee if the employer fails to offer health coverage and has at least one full-time employee receiving a premium assistance tax credit or cost-sharing reduction created by the legislation. The first 30 employees of the employer will be excluded from the calculation of the penalty. Therefore, an employer with 70 employees that fails to offer insurance would pay a penalty of $80,000.
Waiting Period:Waiting period of more than 90 days for coverage for new employees would be prohibited.
Market Reforms:All the market reforms for al individual market and fully-insured group markets take effect. All plans must be offered on a guaranteed issue basis, preexisting condition limitations are prohibited, annual and lifetime limits will be fully prohibited, and the size of a small employer group will be re-defined to 1 -100 employees (although states may elect to keep the size if a small group at 50 employees until 2016). Wellness discounts will be allowed for group plans under specific circumstances.
Standards for Qualified Coverage:Essential benefit standards will be used to determine if large employer coverage us sufficient relative to the employer responsibility requirements. The essential benefit standards include specific mandated benefits, cost sharing requirements, out of pocket limits and a minimum actuarial value of 60%.
Wellness Programs: Employer sponsored wellness program rules for all employer-group plans under HIPAA improve and employers can increase the value of workplace wellness incentives up to 30% of premiums with DHHS discretions to increase the incentives to 50%.
Implementation Timeline 2014 and beyond
Vouchers: Employers that provide and contribute to health coverage will be required to give vouchers to each employee who is required to contribute between 8% and 9.8% of their household incometoward the cost of coverage, if such employee¡¦s household income is less than 400% of FPL and the employee does not enroll in a health plan sponsored by the employer.
State exchanges:States are required to have their exchanges up and running. Known as the Small Business Health Options Program (SHOP), the exchanges will allow small businesses to pool together to increase their purchasing power. The exchanges will be open to both eligible individuals and some employers. Before 2017, they will be open to employers with 100 or fewer employees only. Beginning in 2017, each state will be allowed to open up the exchange to larger employers
Tax on "Cadillac" Plans.Beginning in 2018, there will be an excise tax on any "excess benefit" of employer-sponsored coverage. The legislation defines "excess benefit" as one that exceeds $10,200 for individual coverage and $27,500 for family coverage. The thresholds will be indexed to inflation.
Health Care Reform
Patient Protection and Affordable Care Act
What the New Legislation Means for Employers
Federal Health Care Reform: Impacts on Employers
Most of the provisions that will have a major impact on the health insurance marketplace such as the new framework for health insurance products are not scheduled to go into effect until 2014.
Many of the deadlines outlined in this document are calculated from the date of the act¡¦s enactment, March 23, 2010. For example, most of the effective dates in 2010 apply to plan years beginning on or after six months after the date of enactment (or September 23, 2010).
It is also important to note that many of the provision in the act instruct federal agencies such as Health and Human Services (HHS) and the IRS to define details, issue implementation guidelines or regulations, and resolve ambiguities. Such a process is typical with enacted legislation, and while a few guidelines have been issued, many of the provisions with near term implementation dates have yet to be defined.
Where interpretation of the law is unclear, employers should consult their legal counsel for guidance.
Implementation Timeline 2010
Immediate Changes:
Grandfather Plans: Individuals and employer group plans that wish to keep their current policy on a grandfathered basis can only do so if the only plan changes made are to add or delete new employees and any new dependents (collective bargaining agreement may be an exception).
Phase 1 of the Small Business Premium Tax Credit:Eligible small businesses (no more than 25 FTEs with annual wages of less than $50,000) are eligible for a tax credit for up to two years if the employer contributes at least 50% of the total premium cost.
Medicare Part D: Employers that provide a Medicare Part D subsidy will have to account for the future loss if the deductibility of this subsidy on liability and income statements.
(Within 6 months of enactment):
Dependent Coverage: Health plans that provide dependent coverage will be required to provide it up to age 26. For coverage of these non-dependent children prior to 2014, the requirement would be limited to those adult children without an employer offer of coverage.
Eliminates Pre Existing Conditions Exclusion for Children:Health plans would be prohibited from excluding coverage of pre-existing conditions for children. This provision will apply to all people in 2014.
Ban on Lifetime Limits: The Law prohibits insurers from imposing lifetime limits on benefits.
Ban on Discrimination Based on Pay: The law prohibits new group health plans from establishing any eligibility rules for healthcare coverage that have the effect of discriminating in favor of higher wage employees.
Rescission: Health plans will be prohibited from rescinding coverage for all health insurance markets (including self funding), except for cases of fraud or intentional misrepresentation.
Preventive Care:All group and individual plans, including self funded plans, will have to cover specific preventive care services with no cost sharing, and cover emergency services at the in network level regardless of provider.
Wellness Programs:Federal grant program for small employers providing wellness programs to their employees will take effect.
Implementation Timeline 2011
Over The Counter Medications: OTC drugs will no longer be reimbursable under HSAs, medical FSAS, HRAs and Archer MSA unless they are prescribed by a physician.
Long Term Care:All employers would be required to enroll employees in a new national public long-term care program, unless the employee opted out.
Federal Income Tax:All business owners would be subject to new expanded federal income tax requirements on payments of fixed or determines income or compensation.
Premium Tax:Premium Taxes on most private health insurers based on premium volume take effect, which can be passed directly down to fully insured plan consumers. This tax does not apply to self-insured plans, governmental entities (other than those providing insurance through the Act¡¦s community health insurance option), and certain non profit insurers of last resort or nonprofit insurers with a medical loss ratio of 90% or more. (The reconciliation package would delay this provision until 2014 but increase the amount of fees once they become effective).
Self-Insured Data:The Department of Labor will begin annual studies on self-insured plans using data collected from Form 5500.
Implementation Timeline 2012
Summary of Benefits:All group and individual plans (including self-insured plans) will have to provide a summary of benefits and a coverage explanation that meets specified criteria to all enrollees when the apply for coverage, when they enroll or re-enroll in coverage. Any material modification of the terms of the coverage must also be provided. There will be a $1,000 per enrollee fine for willful failure to provide this information.
DHHS reporting:All group plans (including self-insured plans) and all individual and group carriers will have to submit reports to the secretary of DHHS on whether or not the benefits provided under their plans meet criteria to be established by the DHHS on improving health outcomes, preventing hospital re-admissions, improving patient safety and reducing medical errors, including wellness and health promotion activities.
Implementation Timeline 2013
Medicare Payroll Tax:The Medicare payroll tax increase of .9% above $200,000 for individuals and $250,000 for joint filers will go into effect. (The reconciliation act would also levy a new 3.8% Medicare contribution on certain unearned income from individuals with AGI over $2000,000 a or $250,000 for joint filers).
Tax Returns:The threshold for deducting unreimbursed medical expenses will increase from 7.5% of AGI to 10% of AGI (will be waived for those over age 65 and older through 2016).
State-based exchanges:All employers must provide notice to their employees of the existence of the state based exchanges.
Flexible Spending Accounts:FSA contributions for medical expenses are limited to $2,500 per year, with the cap annually indexed for inflation.
Implementation Timeline 2014
Automatic Enrollment:The legislation will require that employers with more than 200 employeesautomatically enroll full-time employees in health coverage. The legislation will allow employees to opt-out of the coverage after automatic enrollment. (The effective date of this provision is unclear and may take place earlier).
Individual Mandate:The Individual mandate requirement to purchase health insurance for all citizens and legal residents takes effect. All employer plans, including self-insured plans, will have to provide documentation of coverage to all covered employees, and their dependents and the IRS.
Employer Requirement: The legislation will require an employer with more than 50 FTEs to pay $2,000 per employee if the employer fails to offer health coverage and has at least one full-time employee receiving a premium assistance tax credit or cost-sharing reduction created by the legislation. The first 30 employees of the employer will be excluded from the calculation of the penalty. Therefore, an employer with 70 employees that fails to offer insurance would pay a penalty of $80,000.
Waiting Period:Waiting period of more than 90 days for coverage for new employees would be prohibited.
Market Reforms:All the market reforms for al individual market and fully-insured group markets take effect. All plans must be offered on a guaranteed issue basis, preexisting condition limitations are prohibited, annual and lifetime limits will be fully prohibited, and the size of a small employer group will be re-defined to 1 -100 employees (although states may elect to keep the size if a small group at 50 employees until 2016). Wellness discounts will be allowed for group plans under specific circumstances.
Standards for Qualified Coverage:Essential benefit standards will be used to determine if large employer coverage us sufficient relative to the employer responsibility requirements. The essential benefit standards include specific mandated benefits, cost sharing requirements, out of pocket limits and a minimum actuarial value of 60%.
Wellness Programs: Employer sponsored wellness program rules for all employer-group plans under HIPAA improve and employers can increase the value of workplace wellness incentives up to 30% of premiums with DHHS discretions to increase the incentives to 50%.
Implementation Timeline 2014 and beyond
Vouchers: Employers that provide and contribute to health coverage will be required to give vouchers to each employee who is required to contribute between 8% and 9.8% of their household incometoward the cost of coverage, if such employee¡¦s household income is less than 400% of FPL and the employee does not enroll in a health plan sponsored by the employer.
State exchanges:States are required to have their exchanges up and running. Known as the Small Business Health Options Program (SHOP), the exchanges will allow small businesses to pool together to increase their purchasing power. The exchanges will be open to both eligible individuals and some employers. Before 2017, they will be open to employers with 100 or fewer employees only. Beginning in 2017, each state will be allowed to open up the exchange to larger employers
Tax on "Cadillac" Plans.Beginning in 2018, there will be an excise tax on any "excess benefit" of employer-sponsored coverage. The legislation defines "excess benefit" as one that exceeds $10,200 for individual coverage and $27,500 for family coverage. The thresholds will be indexed to inflation.
