Good day all. I have received numerous requests to post some specific information regarding the timelines associated with the recently legislated Patient Protection and Affordable Care Act. This legislation is in the background of everything that is health insurance and there is still a lot of confusion over exactly what is changing and when the changes will actually occur. Read on for the timelines and associated changes.
Much of the information contained in this post is courtesy of the following sites and authors and the ProSchools Insurance Blog thanks them for their research and effort:
- Agents Sales Journal: Click HERE for a link to their website
- The Democratic Policy Committee: Click HERE for a link to this article
- Govtrack.us: Click HERE for a link to their site and article
What follows is the timeline for the implementation of the Patient Protection and Affordable Care Act, a sweeping legislative piece that will change the landscape of health insurance for years to come. There are still those out there who do not feel that these laws will ever truly come to fruition; they will be beaten to death in the courts and there are many states who are considering this legislation as unconstitutional and are potentially seeking legal redress. Whatever the outcome is or is going to be, as of March 23, 2010, the bill was signed into law by President Barack Obama. Whether it will stand the legal test of time is another matter entirely; you can count on the ProSchools Insurance Blog to keep you informed of changes as they occur.
Patient Protection and Affordable Care Act Timelines
2010:
- A temporary national high-risk pool will be in effect 90 days after the bill’s enactment to provide coverage to those with preexisting medical conditions.
- Beginning September 26, 2010, adult children will be eligible for coverage as a dependent under their parent’s group health care plan until they reach age 26.
- All medical expense plans will be prohibited from placing lifetime dollar limits on coverage, and until 2014, plans may only impose annual limits on plans and only as determined by the Secretary. As well, insurers will only be able to rescind coverage in the event of fraud and will not be able to reject children with preexisting conditions.
- Health plans will be required to provide minimum amounts of coverage, without any cost sharing requirements, for preventive services rated A or B by the U.S. Preventive Services Task Force. These benefits include recommended immunizations; preventive care for infants, children and adolescents; and additional preventive care and screenings for women.
- Small employers (with 25 or fewer employees and an average payroll of less than $50,000) will be given a tax credit for purchasing health insurance for their employees.
- A temporary reinsurance program will be put into effect 90 days after the legislation is effective for those employers that provide health coverage to those older than 55 and who are not Medicare eligible. This measure will be in effect until 1/1/2014.
- Effective in 2010, health plans will be required to report the proportion of premium dollars actually spent on patient services. Starting on 1/1/2011, the plans will be required to provide rebates to consumers for the premiums they have received that is less than 85% for plans in the large group market and 80% for the individual and small group markets.
- Any health plan that is requesting an increase in premium must be able to justify the premium increase by utilizing a specific process. States must report on premium increase trends and recommend whether plans should be excluded from the health insurance exchange based on unjustified increases to the premium.
2011:
- For Long-Term Care insurance, a national voluntary insurance program is going to be established for purchasing Community Living Assistance Services and Supports (”CLASS” program).
- Grants will be provided to small employers for up to five years if they establish a “wellness” program for their employees (nutrition, weight counseling, smoking cessation, etc. courses)
- A new strategy for improving the health of Americans will be completed by the National Prevention, Health Promotion and Public Health Council.
- Over-the-counter medications not prescribed by a physician will no longer be eligible for reimbursement through a Health Reimbursement Account (HRA) or a Health Flexible Spending Account (HealthCare FSA). As well, tax-free reimbursement through a Health Savings Account (HSA) and through Archer Medical Savings Accounts (Archer MSA) will no longer be eligible for these medications.
- The tax penalty that is imposed on non-qualified withdrawals from HSA or Archer MSA will increase to 20% from the current 10% penalty level.
2013:
- The Consumer Operated and Oriented Plan (”CO-OP”) program will be established for the purpose of creating and fostering non-profit, member-run health insurance companies in all 50 states and D.C. to offer qualified health plans. The government is planning on providing about $6 billion to finance the program and will award grants and loans to establish the CO-OPs by 7/1/2013.
- For those that itemize their deductions, the threshold for unreimbursed medical expenses will rise to 10% of the taxpayer’s adjusted gross income (AGI); an increase of 2.5% from the current 7.5% threshold.
- Contributions to Flexible Spending Accounts will be limited to $2,500 per year with annual increases based on the cost-of-living.
2014:
- All United States citizens and legal residents must have qualifying health coverage or will be assessed a phased-in tax penalty. Those not in the U.S. legally will have no opportunity to purchase coverage or be insured under any of these plans.
- Employers with more than 50 employee that do not offer coverage, with at least one employee receiving a premium tax credit, will be assessed an annual fee of $2,000 per full-time employee, after the first 30 employees. There are additional penalties that apply to employers that do offer coverage but also have employees that receive premium tax credits. For employers with more than 200 employees, they will be required to automatically enroll employees into health insurance plans offered by the employer, but employees may opt out of the coverage and no employer-penalty will apply.
- State-based American Health Benefit Exchanges (AHBEs) and Small Business Health Options (SHOP) Exchanges will be to operate under government administration or a non-profit agency approved. Individuals and small businesses with up to 100 employees will be able to purchase qualified coverage through these exchanges.
- Guaranteed issue and renewability will be required; premium rating in the individual and small-group markets and exchanges will only be allowed based on age, family composition and tobacco use.
- Out-of-Pocket limits for people with incomes up to 400% of the Federal Poverty Level (FPL) will be reduced to these levels:
- 100-200% of the FPL: One-third of the HSA limits ($1,983 for individuals and $3,967 for families)
- 200-300% of the FPL: One-half of the HSA limits ($2,976 for individuals and $5,950 for families)
- 300-400% of the FPL: Two-thirds of the HSA limits ($3,987 for individuals and $7,973 for families)
- Small-group health plan deductibles will be limited to $2,000 for individuals and $4,000 for families unless there are contributions that offset deductible amounts above these limits.
- Waiting periods for coverage will be limited to 90 days (currently we see up to a one-year wait).
- An “Essential Health Benefits Package” will be created that provides a comprehensive set of services which will limit cost-sharing and will mimic the typical employer-sponsored health plans.
- The individual states will be allowed to create a basic health plan for those uninsured individuals with incomes between 133% and 200% of the FPL who would otherwise be eligible for tax credits.
- The Office of Personnel Management must contract with insurers to offer at least two multi-state plans in each insurance exchange. At least one plan must be operated by a non-profit entity, and at least one plan must not provide coverage for abortions beyond those permitted by federal law.
- Effective 1/1/2014, states will be allowed to merge the individual and small group markets. They are currently separated under law in each state.
- A temporary reinsurance plan will be established to provide payments to plans the cover high-risk insureds in the individual markets.
2015:
- States will be allowed to form “Health Care Choice Compacts” and permit insurers to sell policies in any state that participates in the compact. These compacts cannot actually take effect until 1/1/2016.
2018:
- Effective 1/1/2018, insurers will be assessed an excise tax for employer-sponsored health plans in which the annual premiums exceed $10,200 for individuals and $27,500 for family coverage.
So…what do you think? I am anticipating a large volume of comments on this post and I encourage yours as well! Let me know what you think…remember that legislators read this blog!