Health Care Reform - A Good Time to Start a Blog!

Health Care Reform is an extremely important and sensitive issue for employers of all sizes. The Employee Benefit Specialists at TrueNorth recently came together and decided that now is as good a time as ever to get information out to our clients and community about these impending changes. So, hold onto your seats as we embark on this journey of Health Care Reform together.

First stop? Let's answer the question - what does this mean for me and my business? We have tried to break the thousands of pages of legislation into 7 Simple Things You Need to Know.

1. Dependent coverage will be extended to age 26. See below for a more detailed definition.
2. There will no longer be lifetime limits on benefits.
3. There are restrictions on annual limits. This change is not in affect until 2014 and we are still awaiting further definitions.
4. There are no pre-existing condition restrictions on children under 19 years of age. See below for a more detailed definition.
5. Rescission of is not allowed. See below for a more detailed definition.
6. Flexible Spending Accounts (FSAs) as well as Health Savings Accounts (HSAs) and Health Reimbursement Accounts (HRAs) will no longer be used for over the counter drugs staring 1/1/2011.
7. The penalty for using your HSA for non-qualified withdrawals has increased from 10% to 20%.

Now, having said that, let us help you define what some of these things are referring to:

• Annual Benefit Limits: these are specific dollar limits set for specific benefits within a plan. Final regulations are still needed to clarify specific benefits that are not allowed to have these limits.
• Dependent Coverage to Age 26: dependent children (even if married) can continue to be covered on the parent's health coverage. If other employer-sponsored coverage is available for the dependent they are not eligible to stay on parent's plan.
• Grandfathered Plans: a plan that makes no changes after the enactment of this legislation is expected to be allowed to remain active. Final regulations are still needed to determine if the required changes under the legislation will impact this status or if there is any value in remaining "grandfathered".
• Lifetime Maximums: this is the maximum benefits an insured can receive over their lifetime through an insurance policy. Policy will no longer be able to include this limitation.
• New Hire Auto-Enrollment: employers with 200 or more employees will automatically enroll employees into an employer-sponsored health plan.
• Out of Pocket Maximums: this is the maximum amount an insured expects to pay in a specific time period for treatment. These limits will not be allowed to exceed the limits established for high deductible health plans.
• Plan Rescission: prevents insurance carriers from cancelling coverage.
• Pre-Existing Condition: typically a pre-existing condition is a condition that an insured received treatment and/or medical advice (including prescriptions) in a set time period prior to their first day of coverage. Many plans provide a waiting period for such conditions. This legislation will remove this limitation immediately.
• Preventive Services: typically these include annual physicals (including gynecological exams), immunizations, PSA testing, mammograms, etc. Final regulations are still needed to determine the definition of "preventive services". Once that is determined, those services will be covered at 100% - no cost-sharing such as co-payments, coinsurance and/or deductibles.

And finally, when can you expect these changes to occur?

Following are the required changes to health plans beginning on or after September 23, 2010.

2010

• Remove pre-existing conditions for children under age 19
• Extend coverage to dependent children until age 26
• Remove lifetime maximums
• Begin restricting use of annual limits
• Any in-network doctor may be designated as a primary care physician
• First dollar benefits for specific preventive services

2011

• Over the counter drugs not reimbursed through FSA, HRA, HSA or Archer Medical Savings Accounts
• Penalty for non-medical distributions from HSA or Archer Medical Savings Account increases from 10% to 20%.
• Employers must report the cost of the employer sponsored health benefits on employee W-2

2012

• No changes reported for employer plans

2013

• Medical FSA contributions capped at $2,500 annually
• Uniform standards for electronic exchange of health information for health plans

2014

• Remove all annual limits
• Remove all pre-existing condition limits
• No waiting period longer than 90 days for employer benefits
• Individual requirement to buy insurance - or pay penalty
• State health exchanges open
• Employers must provide vouchers for employees who qualify for affordability exemption but not health care premium tax credits
• Employers that do not offer health insurance: $2,000 penalty for full-time employee (after 30 FTEs)
• Employer penalty for employees who receive tax credits (do not take employer health plans). Penalty of $3,000 per person receiving the tax credit or $750 per full-time employee (whichever is less).

2018

• Excise tax on "Cadillac Plans" that are valued more than $10,300 for single coverage and $27,500 for family coverage

Although this information is in no way all encompassing, we are hopeful that it begins to lay the groundwork for an understanding of the legislative changes. We will continue to add to this skeleton outline and work through the questions we all have, together.

For more information and to ask questions to experts please join us at Mercy Medical Center's Hallagan Education Center on May 6, 2010. Registration and breakfast begins at 7:30 am with a presentation running from 8-10 am.