This document summarizes key provisions of the recently passed US healthcare reform legislation. It outlines major changes occurring between 2010-2014, such as dependent coverage until age 26, elimination of lifetime limits, creation of health insurance exchanges in 2014, and employer penalties for not providing coverage. Administrative impacts are also discussed, such as increased workload from additional required notices and forms. Specific provisions like tax changes, Medicare discounts, and essential health benefits are reviewed.
19. Comprehensive nature of this recently passed reform includes benefit re-design, increased administrative and compliance costs, eligibility rules restructuring, increased taxes and health insurance exchanges.
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22. Next plan year after enactment, waiting period or effective date
42. 2014 - Automatic Enrollment: Employers with more than 200 employees are required to automatically enroll new-full time employees in their healthcare plans
43. 2014 - Expansion of eligibility for Medicaid and subsidized care
44. 2014 - Insurance Exchanges: Created to assist individuals and small businesses with fewer than 100 employees to purchase medical insurance
45. 2014 - Individual Coverage Mandate: Requires all individuals to qualify to receive affordable health insurance or pay a penalty
46. 2014 - Employer Pay or Play Mandate: Employers must offer affordable coverage to full time employees (30 hours a week), or pay a penalty
68. Program to Reduce the Cost of Covering Early Retirees - A program will be implemented to temporarily support employer retiree plans until the exchange is fully running.
69. Plan sponsors will be reimbursed for 80% of claims between $15,000 and $90,000 for pre-Medicare retirees age 55-64.
70. Program does not apply to retirees on Medicare and retirees that are not actively working for an employer.
82. Access to Insurance for Uninsured Individuals with Pre-Existing Conditions - Through a new program of high-risk insurance pools, people who have been denied coverage on the basis of pre-existing conditions and have been uninsured for at least six months will be extended subsidized coverage.
83. The program will end when the health insurance exchanges roll out in 2014.
86. Tax on Indoor Tanning Services -The act imposes a 10% tax on amounts paid for indoor tanning services (new IRC § 5000B).
87. Like a sales tax, the tax will be collected from the person tanning when payment for the tanning services is made. The provision applies to services performed on or after July 1, 2010.
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89. Medicare Part D Discounts - Seniors who have fallen into the "donut hole" of Medicare Part D prescription coverage in 2010 will receive a 50% discount on name brand drugs. Pharmaceutical manufacturers that don’t comply with the discount program will be subject to fines.
90. The legislation aims to close the donut hole by 2020 by offering a 75% discount on generic drugs.
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96. There is no annual limit under current law. Currently employers impose limits between $4,000 and $5,000 a year.
97. Administrative Note: Employers that provide FSAs will need to amend their plan documentation and enrollment materials. Restrictions must be placed on automatic reimbursement procedures, such as the use of debit cards.
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100. Beginning 2013, individuals over 65 will be able to claim the itemized deduction for medical expenses at 7.5 percent of adjusted gross income through 2016.
104. Analysts and insurers are uncertain how state insurance exchanges will operate until after final regulations are issued.
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107. The first 30 employees are not counted in calculation of the penalty. Example: an employer with 75 employees would pay the penalty for 45 workers, or $90,000 (45* $2,000).
109. Employer Pay or Play Mandate for Employees Receiving Coverage through the Exchange - Employers who offer coverage, and has at least one employee that receives a tax credit, will be assessed a pay or play fine of $3,000 for each worker receiving the tax credit, up to an aggregate cap of $2,000 per full-time employee.
110. Employers are required to report to the federal government on health coverage they provide.
121. Premium tax credits will be available to individuals up to 400% of the Federal Poverty Level (FPL) through the “exchanges” for those not eligible/offered “affordable” employer coverage.
122. Employers are required to educate employees about their insurance options outside of employment
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124. Generous subsidies are offered to the low income. For this reason employers may not want to duplicate these offerings with salary-based cost sharing.