A key step towards achieving the long-discussed health care reform in the US took place in March 2010, when the Patient Protection and Affordable Care Act (PPACA) was signed into law by President Obama. Further legislation affecting health care is now passing through the Senate.
Most provisions included in the new laws become effective in 2014. However, since some reforms come into force for plan years beginning on or six months after the enactment date, it is important to get expert help now about what is involved. Here is a very brief and incomplete overview of some of the issues. Please request professional assistance to ensure full compliance.
Immediate changes
Some reforms, impacting both self-insured and fully-insured group health plans, are effective almost immediately, starting January 1, 2011, or before, depending on the date of the plan year.
- No annual or lifetime benefit limits: For essential benefits, plans can no longer set lifetime limits and may impose only restricted annual limits. Limits are still possible for non-essential benefits.
- No rescissions: Plans may not withdraw coverage except in cases of fraud or deceit, although employers are not prevented from terminating group health plans.
- Preventive care coverage: Plans must cover all the costs of certain preventive care treatments and immunizations.
- Adult children: Dependent children must be covered up to age 26.
- Information on plan coverages: Plan administrators and insurers must provide information to set standards on health plan coverages, and inform members of changes at least 60 days in advance.
- Non-discrimination rules for insured plans: Fully insured group health plans are now subject to non-discrimination rules.
- Prohibition of pre-existing condition exclusions for children under 19
- New reporting requirements on health improvement measures and loss ratios
- Internal claims appeals procedures and electronic transaction standards now required
Health plan reforms effective 2014
Group health plans will be subject to the following changes beginning on or after January 1, 2014.
- Prohibition of pre-existing condition exclusions
- No discrimination based on health
- No discrimination against providers
- Limitations on cost-sharing
- Limitations on waiting periods
Employer responsibilities
As of January 1, 2014, employers will be subject to the following:
- Automatic enrolment: Employers with 200 or more full-time employees with a health plan must automatically enrol all new employees and keep current employees in a plan.
- Notification on health insurance exchange and subsidies: Employers must inform employees when hired that there is a health insurance exchange and that they are eligible for a subsidy through the exchange if the employer pays less than 60% of its plan costs.
- Reporting requirements: Employers with over 50 full-time employees must report annually on the coverages offered to employees.
- Free choice vouchers: Employers contributing to minimum coverage must offer “free choice vouchers” to qualified employees for the purchase of qualified health plans through health insurance exchanges.
Immediate changes
Some reforms, impacting both self-insured and fully-insured group health plans, are effective almost immediately, starting January 1, 2011, or before, depending on the date of the plan year.
- No annual or lifetime benefit limits: For essential benefits, plans can no longer set lifetime limits and may impose only restricted annual limits. Limits are still possible for non-essential benefits.
- No rescissions: Plans may not withdraw coverage except in cases of fraud or deceit, although employers are not prevented from terminating group health plans.
- Preventive care coverage: Plans must cover all the costs of certain preventive care treatments and immunizations.
- Adult children: Dependent children must be covered up to age 26.
- Information on plan coverages: Plan administrators and insurers must provide information to set standards on health plan coverages, and inform members of changes at least 60 days in advance.
- Non-discrimination rules for insured plans: Fully insured group health plans are now subject to non-discrimination rules.
- Prohibition of pre-existing condition exclusions for children under 19
- New reporting requirements on health improvement measures and loss ratios
- Internal claims appeals procedures and electronic transaction standards now required
Health plan reforms effective 2014
Group health plans will be subject to the following changes beginning on or after January 1, 2014.
- Prohibition of pre-existing condition exclusions
- No discrimination based on health
- No discrimination against providers
- Limitations on cost-sharing
- Limitations on waiting periods
Employer responsibilities
As of January 1, 2014, employers will be subject to the following:
- Automatic enrolment: Employers with 200 or more full-time employees with a health plan must automatically enrol all new employees and keep current employees in a plan.
- Notification on health insurance exchange and subsidies: Employers must inform employees when hired that there is a health insurance exchange and that they are eligible for a subsidy through the exchange if the employer pays less than 60% of its plan costs.
- Reporting requirements: Employers with over 50 full-time employees must report annually on the coverages offered to employees.
- Free choice vouchers: Employers contributing to minimum coverage must offer “free choice vouchers” to qualified employees for the purchase of qualified health plans through health insurance exchanges.