Health Care Reform – Cut to the Chase

All Businesses Are Affected, Regardless of Size

 Fundamentals of the PPACA

• Virtually all taxpayers will be required to obtain basic health coverage or pay a penalty (the individual mandate) beginning in 2014.
• All size plans have mandated coverage and other changes
• “Large employers” (basically 50+) must provide minimum, affordable coverage or pay a tax. This is also known as the “play or pay” requirement.
• State insurance exchanges will be set up by the states or federal government to provide a source for individual and “small business” coverage, with enrollment starting in the fall of 2013.

 

EVERY Business is Impacted!

If you have even ONE employee, you need to know about the PPACA. ALL EMPLOYERS must comply with certain provisions – some now and some in the future, for example:

• Notices: The PPACA requires all employers to provide existing employees with information about the state healthcare exchanges by 3/1/2013. The Department of Labor now expects the timing for distribution of notices to be late summer or fall of 2013, which will coordinate with the open enrollment period for exchanges.
• Information: By 2014, all employers will have to report on health benefits on employee W-2s. The W-2 form has already been redesigned.
• Reporting: 1/2015 brings required reporting of each employee’s monthly status and hours (whether or not coverage is offered), cost of coverage, and benefit summary. Tax forms will be revised under the PPACA.

The Heart of the PPACA is Coming in 2014

• The individual mandate
• Eligibility Changes
• Nondiscrimination requirements
• State exchanges
• The employer “play or pay” requirement
• No pre-existing condition exclusions

 

Employers Providing Group Health Have Already Had New Requirements!

The PPACA has effective dates going back to enactment on March 23, 2010.

 

Plans Must CURRENTLY Include:

• Dependent child coverage to age 26 (9/2010).
• No pre-existing condition exclusion for children under 19 (9/2010).
• Coverage of preventive benefits (without co-pay) (9/2010).
• No lifetime limitations on coverage (9/23/2010).
• Rescission limited (fraud or serious misrepresentation)(9/2010).
• Phase-out of annual dollar limits (not less than $2 million in 2013, no limits in 2014).

 

Additional Reform Changes

 

• Summary of Benefits and Coverage, a uniform explanation of coverage with strict standards for information, terminology, and format (9/2012). This is in addition to your Summary Plan Description.
• OTC drugs not covered (FSA, HRA, HSA) (1/2011).
• W-2 reporting of healthcare benefits – value of employer-provided healthcare coverage in 2012 must be on each W-2 for employers filing more than 250 W-2s (1/2013).
• Medical Loss Ratio (MLR) rebated (began in 8/2012).
• FSA limited to $2,500 (1/2013).
• Medicare tax increase (to 2.35% for singles earning over $200,000 and couples over $250,000).
• PCORI tax (Patient-Centered Outcomes Research Institute) (plans ending after 9/2012).   $1/covered ee first year, $2 second year, then set annually.  Fully insured plans:  added to premium

 

IMPORTANT NOTICE: This information is provided for summary and informational purposes only and is not complete nor intended to replace expert and/or legal advice regarding the Patient Protection and Affordable Care Act, and related regulations.