from www.Safety.BLR.com
Whatever you felt about it, the Patient Protection and Affordable Care Act - arguably the most far-reaching piece of social legislation in the last severaldecades - is now law. Employers around the country - including BLR - are scrambling to figure out what the upcoming changes mean.
It’s a huge challenge because federal regulators haven’t yet written the rules implementing the new law. What is clear is that we’re in for some big changes to our healthcare benefits, from an extension of dependent coverage and a ban on annual and lifetime coverage caps to limits on flexible spending account distributions - as well as penalties if you fail to provide the right coverage toyour workers.
Don't sit back thinking you don't have to worry until 2014. That's true for some provisions - but others go into effect as early as this fall. For example:
Dependent coverage. Beginning in 6 months, health plans that provide dependent coverage will be required to provide it up to age 26. In addition, the legislation prohibits health plans from excluding coverage of preexisting conditions for children. This provision is effective 6 months after enactment and applies to all employer plans and new plans in the individual market. This provision will apply to all people in 2014.
Ban on lifetime limits. Effective 6 months from enactment, the law prohibits insurers from imposing lifetime limits on benefits.
Ban on discrimination based on pay. Beginning 6 months after enactment, the law prohibits new group health plans from establishing any eligibility rules for healthcare coverage that have the effect of discriminating in favor of higher wage employees.
Tax credits for small employers. Beginning in 2010, tax credits of up to 35 percent of premiums will be available to firms that choose to offer coverage. The full credit will be available to firms with 10 or fewer employees with average annual wages of $25,000, while the larger of small employers will see smaller tax credits. In 2014, tax credits will be up to 50 percent of premiums for the smallest employers.
Some of the provisions taking effect in 2014:
Employer healthcare responsibilities. Beginning in 2014, the legislation will require an employer with more than 50 full-time employees to pay $2,000 per employee if the employer fails to offer health coverage and has at least one full-time employee receiving a premium assistance tax credit or cost-sharing reduction created by the legislation. The first 30 employees of the employer will be excluded from the calculation of the penalty. Therefore, an employer with 70 employees that fails to offer insurance would pay a penalty of $80,000.
Ban on annual limits. In 2014, the use of annual limits will be banned for new plans in the individual market and all employer plans. Before that ban goes into effect, there will be restrictions on annual limits for new plans in the individual market and all employer plans.
Tax on “Cadillac” plans. Beginning in 2018, there will be an excise tax on any “excess benefit” of employer-sponsored coverage. The legislation defines “excess benefit” as one that exceeds $10,200 for individual coverage and $27,500 for family coverage. The thresholds will be indexed to inflation.
Insurance exchanges. Under the law, states will create insurance exchanges that will be operational by 2014. The exchanges will be open to both eligible individuals and some employers. Before 2017, they will be open to employers with 100 or fewer employees only. Beginning in 2017, each state will be allowed to open up the exchange to larger employers.
Source: www.Safety.BLR.com