Health Care Reform Update
March 24, 2010
Yesterday, President Obama signed into law a piece of legislation that will transform America’s Healthcare system. Over the last year, Congress has discussed many different healthcare reform ideas, and now we can start to focus on what is included in the 2000+ pages of actual legislation.
Below is a brief timeline of when certain provisions of the bill will take effect. This is only a highlight of the provisions that are going to affect many mainstream employers who sponsor a Health Plan.
Please understand that even though the law has passed, there are going to be changes (primarily the reconciliation act that is going to be taken up by he Senate shortly). Also,the law now has to go through the regulatory process where the actual rules will be written so that the law is followed. As more information becomes available, we will continue to keep you updated.
Health Reform Implementation Timeline:
2010
Within 6 months of enactment:
- Regulations prohibiting insurance contracts containing lifetime limits,rescission (canceling of medical policies already issued), and excessive waiting periods go into effect.
- Coverage available for children up to age 26 on their parents' plan.
- Employer tax credit (sliding scale) for employers with fewer than 25 employees who offer coverage.
2011
Fee on Name Brand Drugs implemented
2013
FSA Limits- annual contribution limit of $2,500 for Flexible Spending Accounts
Medicare Tax Increase- Additional 0.9% tax on income in excess of $200,000 (individual)/ $250,000 (couple) and 3.8% tax on investment income for taxpayers with adjusted gross income of more than $250,000
2014
Health Insurance Exchanges- Each state is required to create a marketplace where individuals and small businesses (under 50 employees) can buy coverage (and possibly be eligible for a Premium subsidy.)
Individual Obligation- Individuals will be required to carry Health insurance. The proposed phased-in penalty for failure to carry insurance is $695 or 2.5% of annual income.
Employer Obligation- Employers with 50 or more employees (part time employees will count) who do not offer health coverage will be assessed penalties on a per employee basis. For Employers who provide coverage, but coverage is deemed too expensive, Employers may be fined for employees who obtain a premium credit from the government.
Pre-Existing Conditions Exclusions prohibited
Annual Limits on contracts prohibited
2017
State may allow Large Employers (over 50 lives) to participate in the Exchanges
2018
High Premium Excise Tax- "Cadillac tax" takes effect. This imposes a 40% tax on health coverage in excess of $10,200 for a single employee or $27,500 for a family.
This update is issued for informational purposes only ,and is not intended to be construed or used as legal advice. Sabal Insurance Group ,Inc. and its agents cannot be held liable or accountable for any information contained in this update.