Healthcare Reform Bill

Healthcare: 2012 v. 2013 v. 2014

Healthcare Reform Bill

Key Provisions Effective In 2013 and Beyond

Many employers wonder what is required versus what is optional under health care reform. Here is a checklist of what is currently in effect.

Already in effect:

  • Employers that offer health care coverage must offer it to employees’ adult children through age 26.
  • Employers offering health insurance are responsible for making sure that:

the insurance covers 100% of the cost of preventative services such as mammograms and colonoscopies;

the insurer does not (and cannot) place any “lifetime limits” on health coverage;

the insurer does not (and cannot) exclude children age 19 or younger from coverage due to pre-existing conditions; and

employees are informed that coverage cannot be rescinded retroactively (with few exceptions).

  • Over-the-counter medications can be purchased with FSA, HRA or HAS funds only with a doctor’s prescription.
  • Employers with fewer than 25 full-time equivalent employees with an average wage below $50,000 a year may be eligible for tax credits for sponsoring health coverage.
  • Starting with the first open enrollment on or after Sept. 23, 2012, employers must obtain from their insurers and issue to employees a Summary of Benefits and Coverage (SBC).
  • For 2012, insurers must issue the first Medical Loss Ratio (MLR) rebates.  This is a complicated area; check with your carrier.

Reminder on Insurance Rebates:

The Affordable Care Act of 2010 requires that insurers rebate a portion of premiums when administrative expenses exceed 20% of total premiums paid.  Employers can keep the portion attributable to the employer-paid premiums.  But the employee portion generally must be refunded to them within 3 months.

Starting in 2013:

  • Health Care FSAs that operate on a calendar-year must comply with a $2,500 limit on employee contributions beginning in 2013.
  • Employers must withhold an additional 0.9% employee Medicare tax on wages in excess of $200,000.

Starting in 2014:

  • State health insurance exchanges must be up and running.
  • Insurers cannot restrict coverage for adults over age 19 with pre-existing conditions.
  • Companies with over 50 employees will be subject to a penalty of up to $2,000 per employee for not offering employee health care coverage.
  • Employers can increase the value of incentives for employees who participate in wellness programs to 30% of the cost of health coverage costs.

Many additional provisions will be implemented as far out as 2018.

* Reprinted with permission from The General Ledger published by AIPB. All rights reserved.”

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