What Are the Immediate Changes?

There are certain things that will happen in the first 6 months after the bill is actually signed into law:

• Insurance companies will not be allowed to put lifetime limits on coverage. This means that people with chronic health conditions will never “use up” all of their insurance coverage.
• People with children on their company insurance plan can keep unmarried dependents enrolled until they turn 26. This is very important because of the number of college graduates who are unemployed.
• Insurance plans will be required to cover preventative health services like colonoscopies, osteoporosis screening, screening for things like high blood pressure, diabetes, and sexually transmitted diseases and quit-smoking counseling.
• Pre-existing serious health conditions can no longer prevent people from getting health insurance. They will be able to purchase coverage from a government-subsidized exchange. However, this coverage will not be available until 2014.

Health Insurance Will Be Required

Uninsured people will be required to purchase health insurance by 2014. Subsidies will be available that reduce the premiums subject to income limits.

Penalties will be imposed on people who do not purchase insurance that could be as much as 1% of their income.

Changes to Medicare

Tighter controls may be put on decisions for care that are considered too costly. The care provided to older people may even be restricted. Cancer screening could be denied for older citizens.

The Medicare system will see a huge hit because approximately one-half of the health reform costs for the next 10 years will come from the Medicare budget.

Pre-Existing Illnesses and Loss of Coverage

Starting this year, the health reform bill will ensure that insurers can’t deny coverage to any child based on existing health problems. In 2014, this will be expanded to include all applicants.

Within the first six months of the bill being signed into law, an insurer cannot drop policyholders except in cases of fraud.

Longer Wait Time to See Your Doctor

Millions more people will have access to health care but the number of healthcare workers will not grow quickly enough to keep up. You can expect to wait about twice as long to get in to see a doctor as it did in the past.

Changes to the Coverage You Get from Your Employer

Employers who offer high-value, ‘cadillac’ health plans will probably begin to cut back on those benefits. If they don’t do so by 2019, they could face fines from the government. This could possibly mean no more vision or dental coverage or going to a specialist without a referral from your family doctor.

Benefits for Women

With this new health bill, insurers will have to cover maternity care the same way they cover any other medical procedure, but not until 2014. Employers will also be required to allow break time for mothers who are nursing and a private place where they can use their breast pump.

Losing or Leaving Your Job

If someone quits or loses their job, the same exchanges that help lower income people purchase insurance will be available. This means when you leave your job, you don’t necessarily have to pay the high COBRA costs. This is very important for people with a pre-existing condition. You may even be able to get free health coverage under some circumstances.

Higher Taxes

In 2013, Medicare payroll tax will go up for incomes over $200,000 a year.

As these changes come about, the staff at myBenefitStatements is ready to help you communicate… why not give us a call today!

On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act. Along with the Health Care and Education Reconciliation Act of 2010, this legislation will make significant changes to our current health care system.

The Act adds new responsibilities for employers and insurance carriers. While most of the provisions will start in 2014 or later, some provisions are effective right away or within a short period of time after enactment.

Effective 2010

• Small-Business Tax Credit. A tax credit of up to 35 percent of the employer’s health care contribution is available for qualified small employers (any employer with no more than 25 full-time employees and average wages of less than $50,000). This tax credit will increase to 50% starting in 2014 once exchanges are operational.
• Early Retirees. A temporary reinsurance program is provided to employers that offer coverage to early retirees between the ages of 55 and 64.
• Health Plan Changes. 1) Plans must offer unlimited lifetime benefits and annual benefit limits will be restricted. 2) Pre-ex conditions will be prohibited for children under 19. 3) Recissions are prohibited except in the case of fraud. 4) Plans must cover certain preventive health services at no cost to the insured. 5) Dependent coverage age limit extended to 26.
• Federal High Risk Pool. Temporary establishment of a high risk health insurance pool for individuals unable to find insurance elsewhere.

Effective 2011

• W-2 Reporting. Employers must report value of health care benefits provided on employee w-2s, but not as taxable income.
• Higher Penalty Tax on Non-Qualified Health Savings Account (HSA) Withdrawals. Non-qualified withdrawals will be taxed at 20% versus the current 10% penalty.
• Cafeteria Plans. A new Simple Cafeteria Plan is created through which small employers (less than 100 employees) can easily provide tax-free benefits to their employees without the administrative burden of sponsoring a cafeteria plan.
• Standardized Definition of Qualified Medical Expenses. Costs for over-the-counter medications obtained without a prescription will no longer be considered a qualified medical expense.

Effective 2013

• Flexible Spending Account Limits. Annual contribution limits are reduced to $2,500 per year, with CPI increases available in future years.
• Itemized Deduction for Medical Expenses. The Act increases the income threshold for claiming the itemized deduction for medical expenses from 7.5 percent to 10 percent. Individuals over age 65 would be able to claim the itemized deduction for medical expenses at 7.5 percent of adjusted gross income through 2016.
• Higher Payroll Taxes for High Income Earners. The hospital insurance tax rate will be increased 0.9 percentage points for wages over $200,000 for individuals and $250,000 for those filing jointly.

Effective 2014

• Employer Coverage Mandates. Employers with 50 or more employees who do not offer employee health coverage will pay $2,000 annually for each full-time employee, excluding the first 30 full-time employees. The penalty is increased to $3,000 for any full-time employee receiving a federal tax credit for coverage, because his or her employer health coverage is considered “unaffordable.” Coverage is considered “unaffordable” where the employee contributes more than 9.8 percent of his or her income, or the employer contributes less than 60 percent of the actuarial value of the plan.
• Insurance Exchanges. Exchanges are created at the state level starting in 2014, where individuals and small employers can shop for health coverage. Initially, the exchanges would be available to individuals and small groups (less than 100 employees), unless the state opts to cover only groups with up to 50 employees. Starting in 2017, states could open the exchanges to larger groups.
• Wellness Programs. Employers can offer larger rewards, up to 30% of the cost of coverage, to employees for participation in a wellness program or for meeting certain health-related goals.
• Individual Tax Credits. Credits are available for people with incomes up to 400 percent of the poverty level for insurance purchased through an exchange.
• Health Plan Changes. 1) Insurers cannot refuse to issue coverage on any individual due to pre-existing conditions. 2) Higher rates cannot be charged to any individual based on health status, gender or other demographic factors. 3) Coverage cannot be non-renewed or dropped because an individual participates in a clinical trial.

Effective 2018

• High Value Plan Excise Tax. A nondeductible excise tax of 40 percent is imposed on any health insurance plan with combined annual employer/employee premiums exceeding $10,200 for individual coverage and $27,500 for family coverage. The tax would only apply to premiums in excess of the threshold.

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