Employers Face Health Coverage Mandate in 2014, or Do They?

March 22, 2010 (PLANSPONSOR.com) – The U.S. House of Representatives has sent sweeping health reform legislation to President Obama to sign, but the health care reform debate is not over.

Late Sunday night, House democrats approved by a vote of 219 – 212 an overhaul bill already approved in the U.S. Senate; however, they also approved a package of changes to the Senate proposal, which Republicans are vowing to fight. A promise by Senate Majority Leader Harry Reid that the Senate would work to approve the package of changes pulled votes from many Democrats who were wavering on the reform bill.      

According to news reports, under the legislation awaiting Obama’s signature, individuals who receive coverage through their employers would not see any drastic changes, nor should premiums or coverage be affected. Beginning in 2014, employers with 50 or more workers would face federal fines for not providing insurance coverage.    

The assessment would equal $2,000 per full-time employee for all full-time employees, excluding the first 30, if even one employee enrolls in a plan through the newly-created health insurance exchange and receives a federal subsidy. Employers offering unaffordable coverage would be fined $3,000 per full-time employee who enrolls through the exchange and receives a federal subsidy. Coverage will be considered unaffordable if premiums for the coverage selected by the employee exceed 9.5% of family income.

In the first year after the legislation is enacted, many plans would be prohibited from placing lifetime limits on medical coverage, cancelling the policies of people who fall ill, and denying coverage for children with pre-existing conditions. Dependent children up to age 26 would be eligible for coverage under their parents’ plans.      

The bill would also require most Americans to have health coverage, give subsidies to help lower-income workers pay for coverage, and create state-based exchanges where the uninsured can compare and shop for plans.      

President Obama is expected to sign the bill March 23, but that is also the day the Senate will take up the package of changes under reconciliation rules requiring a simple majority to pass, and Republicans said they would challenge those changes through parliamentary points of order and believe they can block its passage. In addition, amendments could be proposed during the process which would send the bill back to the House for another vote.      

The changes include elimination of a Senate deal exempting Nebraska from paying for Medicaid expansion costs, the closure of gaps in prescription drug coverage, and modifications to a tax on high-cost insurance plans.

In addition to the fate of the changes, the reform bill faces challenges by opponents who say they are prepared to fight provisions of the bill in state courts, the news reports say.

The reform bill can be downloaded from here.

Text of the reconciliation bill to be taken up by the Senate, H.R. 4872, is here.