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Red PinPatient Protection and Affordable Care Act

"Health Care Reform Act"

"What's New for 2012"

  • Annual Maximum Benefit: Limits on annual maximums may be no less than $2,000,000 for plan years beginning on or after 9-23-2012.
  • Nondiscrimination Requirement: Discrimination in favor of highly compensated individuals with regards to eligibility and benefits provided by health plans is barred. Enactment has been delayed until after final regulations are issued. An effective date of 1-1-12 is anticipated.
  • Uniform Explanation of Coverage: Beginning March 23, 2012, all health insurance issuers and group health plans will provide a Summary of Benefits and Coverage, Uniform Glossary of Terms, and Coverage Examples that comply with standards issued by Health and Human Services. The information must be issued to applicants, new members and those re-enrolling.
  • 60-Day Summary of Material Modification Notice: Employers must inform employees/members of certain material changes to health benefit plans 60 days in advance of when the change becomes effective.
  • W-2 Reporting Requirement: Employers must report the aggregate cost of each employee's health care coverage on the employee's 2012 W-2 form that is issued January 2013. Transition relief is granted to employers who filed fewer than 250 2011 W-2 forms. These employers have until 2013 to comply with W-2 reporting requirements for 2013 W-2 forms issued in January 2014. The following health care coverage is to be included: major medical, employer contributions to HRAs, supplemental coverage, employer-provided Medicare Advantage Plus plans, the value of on-site medical clinics and mini-medical plans. Optional for 2011.
  • Comparative Effectiveness Research Fee: Plan sponsors and issuers of group policies will pay a new comparative effectiveness research fee. The fee will go to the Patient-Centered Outcomes Research Trust Fund that supports research to evaluate the effectiveness and outcomes of medical treatments. Findings are designed to help patients and health care professionals make informed decisions about their care. The fee is $1 per member for policy or plan years ending after September 30, 2012. The fee adjusts in subsequent years ending altogether in 2019.

"What's New for 2013"

  • FSA Contribution Cap: Annual salary reduction contributions to health FSAs offered under cafeteria plans will be limited to $2,500 per year and adjusted annually with the U.S. Consumer Price Index.
  • Medicare Taxes: Medicare tax increase of 0.9 % for single individuals on earnings in excess of $200,000 and for joint filers on earnings in excess of $250,000. New 3.8 % Medicare contribution on certain unearned income from individuals with an adjusted gross income over $200,000 for single filers and $250,000 for joint filers.
  • State Health Insurance Exchange Notification: Employers must notify new employees at the time of hiring the following:
  • Existence of State Health Insurance Exchanges
  • Employee may be eligible for a subsidy under the Exchange if the employer's share of the total costs of benefits is less than 60%.
  • Medicare Prescription Drug: Subsidies to eliminate the "donut hole" gap in Medicare Part D coverage for prescription drugs will begin phasing in for completion in 2020.
  • Comparative Effectiveness Research Fee: Fee adjusts to $2 per member for policy or plan years ending 2013 through September 30, 2014.

"What's New for 2014"

  • Deductible Maximum: Deductibles cannot exceed $2,000 for single coverage and $4,000 for family coverage (indexed amounts).*
  • Out-of-Pocket Maximum: Out of pocket expenses cannot exceed the amount that is applicable to HSAs.*
  • Annual Maximum Benefit: No limitations on annual maximums.
  • Waiting Periods: Health plans may not have waiting periods greater than ninety (90) days.
  • Dependent Eligibility: Grandfathered plans must provide coverage to dependent children up to age 26 even if dependent child is eligible for coverage under another employer-sponsored plan.
  • Pre-existing Conditions - Adults: No pre-existing condition exclusions on adults. Enrollment may be restricted to open and special enrollment periods.
  • Automatic Enrollment: Employers with more than 200 employees must automatically enroll new employees in one of the health plans it offers, subject to any waiting periods. Employees must be given notice of automatic enrollment and be provided the opportunity to opt out.
  • Wellness Program Incentives: Maximum wellness program incentive for reaching a health standard, increases from 20% to 30% of the COBRA cost of coverage.
  • Clinical Trials: Health plans are required to cover routine costs of participation in certain clinical trials by qualified individuals.*
  • Comparative Effectiveness Research Fee: For policy or plan years ending after September 30, 2014, the fee will be adjusted by the Secretary of Treasury.
  • Individual Mandate: Individuals will be required to obtain health care insurance. Individuals not enrolled will pay a penalty excise tax.
  • State Health Insurance Exchanges Created: Individuals and small group employers may purchase health insurance coverage from the State Health Insurance Exchange. Small employers are those having 100 or fewer employees except in those states that limit small employers to those with 50 or fewer employees.
  • "Play or Pay": Penalty tax imposed on employers who average 50 or more full-time equivalent employees who (1) do not offer "minimum essential coverage" and at least one employee receives coverage from the State Health Insurance Exchange or (2) do offer minimum essential coverage" and at least one employee receives coverage from the State Health Insurance Exchange. Exceptions available for the construction industry.
  • Required Employer Reporting: Government reporting requirements for employers include the following:
  • Confirmation that employers do or do not provides "minimum essential coverage"
  • Length of waiting period
  • Lowest cost option in each enrollment category
  • Employer's contribution toward the premium
  • Total number and names of full-time employees receiving health coverage
  • Full-time employees' names, addresses, taxpayer identification numbers (or Social Security Numbers), and the months employees have been covered under the plan.

* Not applicable to grandfathered plans (plans in effect 3-23-2010).

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