Planning for the Future Impact of PPACA

August 23, 2011 (PLANSPONSOR.com) - Most employers have spent the last year and a half studying new regulations, amending their health plans, and notifying participants of changes. 

 

By PS

Now they are taking a step back to double-check their lists and look forward to see what is next for health care reform.

What changes should employers already have made?

As we have reported previously, there are a number of health plan amendments that were required for 2011:

  • No more lifetime dollar limits on essential health benefits;
  • Restricted annual limits on essential health benefits (must be at least $750,000 in 2011);
  • No rescissions;
  • No pre-existing condition exclusions for enrollees under age 19;
  • Coverage for adult children to age 26;
  • Preventive care coverage (except grandfathered plans);
  • Choice of providers (except grandfathered plans);
  • Coverage for emergency care (except grandfathered plans);
  • Internal and external appeals changes (except grandfathered plans); and
  • No coverage for over-the-counter drugs from HSAs, HRAs, or FSAs.

 

What responsibilities will employers face next?

Employers should be planning now for a number of additional responsibilities that they must take on over the next few years.

  • Summary of Benefits (2012) – Must provide a uniform summary of benefits in the format set out in regulations (proposed regulations expected to be issued 8/22/11).
  • Annual Limits (2012 & 2013) – Phase-in of the annual limit rule increases the minimum annual dollar limit on essential health benefits to $1.25 million in 2012 and $2 million in 2013.
  • Limits on Health FSA (2013) – Health FSA contributions limited to $2,500.
  • W-2 Reporting (2013) – Must report value of health benefits on new Box 12 (code DD) on W-2 for 2012 tax year – for January 2013 W-2.
  • Exchange Notice (2013) – Must provide notice that informs employees of availability of new Exchange coverage.
  • Plan Amendments (2014) – Additional plan amendments required in 2014: no more pre-existing condition exclusions, no more annual dollar limits on essential health benefits, expanded coverage of clinical trials (except grandfathered plans), waiting periods limited to 90 days, deductible limit must be $2,000 per individual / $4,000 family (except grandfathered plans), out-of-pocket limits must be $5,950 individual / $11,900 family (except grandfathered plans), wellness incentive increased to 30% of cost of coverage.
  • Informational Returns (2014) – Employers providing "minimum essential coverage" must file Form 6055 with information about covered persons; large employers must file Form 6056 with information about premiums and contributions (these may be streamlined).
  • Automatic Enrollment (2014) – Employers with 200 or more full-time employees must auto-enroll new employees and continue enrollment of existing employees, with opportunity to opt out.
  • Coverage Mandate (2014) – Employers with at least 50 full-time employees must provide "minimum essential coverage" that meets certain affordability and value tests or pay a penalty.  If employer offers no coverage and at least one employee receives premium assistance through Exchange, generally must pay $2,000 per employee for all full-time employees.  If offer minimum essential coverage but do not meet affordability and value tests, generally must pay $3,000 for each full-time employee receiving premium assistance through Exchange.  
  • Cadillac Plan Tax (2018) – 40% excise tax on coverage in excess of high cost plan limits ($10,200 single / $27,500 family).

 

Got a health-care reform question?  You can ask YOUR health-care reform legislation question online at http://www.surveymonkey.com/s/second_opinions  

You can find a handy list of Key Provisions of the Patient Protection and Affordable Care Act and their effective dates at http://www.groom.com/HCR-Chart.html   

Contributors:

Christy Tinnes is a Principal in the Health & Welfare Group of Groom Law Group in Washington, D.C.  She is involved in all aspects of health and welfare plans, including ERISA, HIPAA portability, HIPAA privacy, COBRA, and Medicare.  She represents employers designing health plans as well as insurers designing new products.  Most recently, she has been extensively involved in the insurance market reform and employer mandate provisions of the health-care reform legislation.

Brigen Winters is a Principal at Groom Law Group, Chartered, where he co-chairs the firm's Policy and Legislation group. He counsels plan sponsors, insurers, and other financial institutions regarding health and welfare, executive compensation, and tax-qualified arrangements, and advises clients on legislative and regulatory matters, with a particular focus on the recently enacted health-reform legislation.

PLEASE NOTE:  This feature is intended to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.

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