HR That Works Blog

Many of the most aggressive aspects of the Health Care Reform Act don’t kick in until 2014. What follows are some of the most important aspects to consider until then.

1. Starting in September 2010 all existing health insurance plans (unless grandfathered) must:
   • Prohibit lifetimes limits
   • Prohibit rescissions
   • Restrict annual limits
   • Include limitations on excessive waiting periods
   • Offer a choice of providers
   • Include a requirement to provide coverage for non-dependent children up to age 26; before 2014, this requirement is limited to non-dependent children who do not have an employer offer of coverage.
   • Plans must pay “first dollar” coverage on all preventative measures and not require cost savings.
2. Employers must provide “reasonable break time” and a private, non-bathroom place to express breast milk during the workday, up until the child’s first birthday. Note: Determine if your current set up will satisfy the rules. If you have less than 50 employees and the accommodation will cause an undue hardship—document it!
3. Small employers (less than 25 employees, averaging less than $50,000 per employee) may be eligible for tax credits.
4. In 2010, small businesses (those with 25 or fewer employees) may be eligible for a tax credit up to 35 percent of employer health insurance costs. The actual amount varies based on employer size and employees’ average income.
5. Required W-2 Reporting – Beginning in 2011, employers will be required to report the value of employees’ health benefits on W-2 forms.
6. 2011 – Requires individual and small group market insurance plans to spend 80% of premium dollars on medical services. Large group plans will have to spend at least 85 percent.
7. 2011 – Employers can apply to receive reimbursement for benefits provided to early retirees age 55-64. $5 billion has been allocated to the program, and it is first-come, first-served.
8. 2011 – No pre-existing condition exclusion for children under 19 (applicable to all enrollees in 2014) is permitted. This is applicable to insured and self-insured plans and grandfathered plans.
9. 2011– No reimbursement of over-the-counter drugs unless prescribed.
10.   2011 – Companies with more than 50 employees must report:
    • Whether they offer their full-time employees and their dependents the opportunity to enroll in minimum essential coverage under an eligible employer-sponsored plan.
    • Waiting periods.
    • Lowest cost options in the plan.
    • Employer’s share of each option.
    • Number and names of full-time employees receiving coverage.
11.    As of January 1, 2011, employers with calendar plan years starting six months after enactment will, among other requirements, be prohibited from using:
    • Lifetime maximums.
    • Restrictive annual maxis.
    • A bar on the participation of adult children if the children are younger than 26 (with a corresponding tax exclusion for adult children).
    • Pre-existing conditions exclusions for children under 19 years old.
    • Discriminatory eligibility or benefit provisions in insured group health plans (although this does not apply to grandfathered plans).
12.    In 2012, employers must disclose the cost of the benefits they provided in 2011 on the annual W-2 form.
13.    In 2012, covered employers will be required to submit reports on the quality of care in their health plans to the HHS, although this does not apply to grandfathered plans. Plan administrators will be required to provide plan participants with a uniform summary of benefits (based on standards developed by HHS) for all plans by March 23, 2012.
14.    2013 – Caps on the amount that can be directed to flexible spending account (FSAs) will kick in as of     January 1, 2013. FSAs will be capped at $2,500 per employee. The $2,500 limit will be indexed for inflation for years after 2013. Medicare taxes increase as of January 1, 2013. Costs for retiree drug expenses for which subsidies are received cease to be deductible for the plan sponsor and also become taxable on that date.
15.    In 2013, by March 1, employers must notify employees about:
    • State health insurance exchanges.
    • If the employer’s plan meets minimum coverage requirements.
    • Information about subsidies available for exchange based on coverage.

Again, this is geared to giving you a head start. Chances are, your broker and insurance company will be well versed in assisting with these legal requirements.