What employers/business owners need to know about reform
(April 12, 2010)
The Patient Protection and Affordability Act was signed into law by President Obama on March 23, 2010. It creates national guidelines for the delivery and financing of health care. It also creates new tax mechanisms that impact individuals, businesses and insurers.
Much of how the reforms will be implemented will require guidance from
regulators. This responsibility will fall primarily to Secretary of
Health and Human Services Kathleen Sebelius.
Priority Health's position
As we have always done, Priority Health will proactively help our customers work through whatever changes are required to ensure their benefit offerings are compliant with reform law. We'll also help them assess what options are best for them particularly in light of new opportunities for tax credits and subsidies and to avoid penalties.
When do the reforms go into effect?
The vast reforms spelled out in the Act have effective dates beginning as soon as June 23, 2010, and as late as 2018.
How will health care coverage change? When will it change?
Many of the questions our customers and members are asking are about changes to coverage. The following coverage changes will be effective as groups renew on or after September 23, 2010:
- The new law extends coverage to dependent children up to age 26. Previous to this law, some health insurers allowed dependent children enrolled as full-time students to be covered under a parent's policy up to age 24.
- Coverage must include preventive services like immunizations and cancer screenings with no cost-sharing to the covered individual (some exceptions apply).
- The law prohibits:
- Pre-existing condition exclusions for enrollees under age 19,
- Placing lifetime and annual limits on essential benefits, and
- Cancelling coverage except in the case of fraud.
What are the tax implications for businesses/employers?
Small businesses with 25 full-time employees or fewer and with an average salary of $50,000 per year may be eligible for tax credits to encourage providing health insurance for their employees. The tax credits are available beginning in 2010.
Businesses with 50 or more employees must offer health insurance to their employees by 2014 or pay a penalty. These businesses may also be subject to a penalty if their employees receive a federal subsidy to purchase coverage on the insurance exchange.
