Health Reform Overview

Health Reform is well underway. As you read on, please keep in mind that a great deal of uncertainty still surrounds the new health reform law. Over the next few months and years, federal and state governments must develop rules, regulations and guidance on how the law is to be interpreted and implemented.

Small business tax credits
Beginning in 2010, small businesses with fewer than 25 employees and average wages of less than $50,000 get a tax credit for their contributions to buying health insurance for employees. The tax credit starts at up to 35 percent and increases to 50 percent in 2014 when the exchange is operational. A full tax credit may be available to small businesses with fewer than 10 employees and average wages of less than $25,000. There has been no direction on the process of how to apply for the tax credit at this time but as we learn more we will let you know.  

Health plan changes
Under the new law, individuals and employers/employees have the right to keep the coverage they had as of March 23, 2010 and are exempt from many reforms. These individual and group health plans are considered “grandfathered plans.” Collectively bargained plans that were ratified before the date of enactment are grandfathered until the date that the last collective bargaining agreement related to coverage ends.

Effective immediately the Department of Health and Human Services (HHS) will establish a process for federal review of fully insured premium rate increases.

Effective six months from the date of enactment – late September – provisions that affect employer-sponsored health plans will begin. Here is a high-level summary of what you need to know about the changes:

Effective for new plans or plans renewed six months after the enactment date unless otherwise noted (includes ‘grandfathered’ plans)-

Lifetime and annual limits: Plans will no longer impose lifetime limits on the dollar value of essential benefits. Annual limits will be restricted and will be determined by The Department of Health and Human Services.

Rescission (cancellation of a health insurance contract by the carrier): No recessions are permitted, except in cases of fraud or intentional misrepresentation.

Coverage for children: Children will be allowed to stay on their parent’s health plans through the age of 26. Some carriers, like United Health Care and Aetna, have already begun the process to implement this change and are allowing members to add their children age 26 and younger back onto their current plans without waiting periods.

Pre-existing conditions: Plans will no longer be able to impose pre-existing condition exclusions for children under age 19.

Effective for new plans or plans renewed six months after the enactment date (does not include ‘grandfathered’ plans)-

Preventive services: New policies must cover the full cost of preventive care as recommended by the U.S. Preventive Services Task Force, recommended immunizations, preventive care for infants, children and adolescents and additional preventive care for women.

Appeals: New minimum requirements for internal and external claims appeals processes.

Patient protections: Plans that require or provide for a primary care provider (PCP) designation must allow each member to designate any in-network PCP, or Pediatrician for children, accepting new patients. Plans may no longer require an authorization or referral to an Ob-Gyn. Prior authorization or increased cost-sharing for emergency services is also prohibited.

Nondiscrimination rules: Nondiscrimination rules that apply to self-funded health plans are expanded to group fully insured health plans. Plans cannot base an employee’s eligibility or continued eligibility on hourly or annual salary.

In addition, there will be new employer reporting requirements in 2011 and new employer penalties and obligations starting in 2014. For more details, please click on the appropriate link below to be directed to our website where you can download informative high level overviews with time-lines created by Humana. Most of the information in this post was taken from these documents:

Small Group Employer High Level Overview and Timeline

Large Group Employer High Level Overview and Timeline

Or visit: http://healthreform.gov/