Brief Summary of Health Care Reform Changes

The health care reform legislation signed into law on March 23, 2010 enacts significant changes in how Americans will purchase and utilize health insurance and health care for the next decade. This legislation will affect everyone – individuals and businesses – and has significant impact on how we manage our health, our finances and our businesses.

Keep in mind that there are many parts to this legislation and a majority of the specifics have yet to be worked out. Many are awaiting procedural guidelines from various government agencies.

Here is a brief summary of some of the changes.  They are listed by the year that the changes are scheduled to be implemented (Subject to change):

FORMS:

Health Care Reform Model Notice

Health Care Reform Acknowledgement Form


 

2010

Dependents covered to age 26
Dependents can remain on their parent’s plan until their 26th birthday.

No lifetime or annual limits
No lifetime dollar maximum limits or annual maximum limits on essential benefits.

No pre-existing restrictions for children
Children under the age of 19 can’t be denied coverage because of pre-existing conditions.

Preventive services coverage
Plans must cover preventive services without making members share the cost through deductibles or co-payments.

Medicare prescription drug coverage
Seniors will get a $250 rebate to help fill the "doughnut hole."


 

2011

Discounts on brand-name drugs
A 50% discount will be provided on brand-name drugs for Prescription Drug Plan or Medicare Advantage enrollees.

2012 W-2 reporting for employers
W-2s must report the cost of employer health coverage that is excluded from employees’ gross income.

Form 1099 for businesses
Effective for payments made after 2011, businesses (including corporations) will be required to file a Form 1099 for all payments over $600 to any payee.

Uniform Explanation of Coverage
Not later than March 23, 2012, a Uniform Explanation of Coverage must be provided to employees on an annual basis.


2012

W-2 reporting for employers
W-2s must report the cost of employer health coverage that is excluded from employees’ gross income.

Form 1099 for businesses
Effective for payments made after 2011, businesses (including corporations) will be required to file a Form 1099 for all payments over $600 to any payee.

Uniform Explanation of Coverage
Not later than March 23, 2012, a Uniform Explanation of Coverage must be provided to employees on an annual basis.


2013

Administration simplification
Rules established making payment, enrollment, claims and authorization processes simpler.

Medicare tax increase
Medicare Part A tax rate on wages goes up from 1.45% to 2.3% for certain individuals.

Employers must inform employees of health options
Employers must provide employees with info on employer plans, health exchanges and subsidies. The Model Notice has to be sent to all employees by October 1, 2013.


2014

Individual mandate
Everyone must have health coverage or pay a penalty.

Employer mandate
Employers with more than 50 employees must provide coverage or pay a penalty if any employee receives a subsidy.

Health Insurance Exchanges operating
States must have exchanges up and running by 2014 or the Federal government will set it up themselves.

Wellness incentives
Employers can offer rewards of up to 30-50% of premiums to employees who take part in wellness and meet health standards.

No pre-existing condition exclusions
Coverage cannot be denied for those with pre-existing conditions.

Comprehensive coverage requirement
Individual and small group plans must include essential health benefits.

Limits on deductibles and co payments
Group health plan deductibles are limited to amounts allowed for HSA plans.

Ban on all annual limits
Plans may no longer impose any annual benefit limits.

PENALTY FOR EMPLOYERS WHO DO NOT OFFER HEALTH INSURANCE


2015

Large employer auto-enrollment
Employers with more than 200 full-time employees that offer coverage must auto-enroll employees.  Employees can opt out.


2018

Cadillac plan excise tax
Tax on employer plans valued at over $10,200 for individuals and $27,500 for families.


Health Care Reform Government Resource Websites

Dept. of Health & Human Services Web page: HealthReform.gov

Affordable Care Act, Employee Benefits Security Administration (EBSA) Web page

Affordable Care Act Tax Provisions, Internal Revenue Service (IRS) Web page

Putting Americans in Control of Their Health Care, White House Web page

FAQs from the National Association of Insurance Commissioners website


 

*April 11, 2013 Health Care Reform Presentation provided by Keenan & Associates. 

Information provided by Keenan & Associates