Transcript Patient Protection and Affordable Care Act (PPACA) A Timeline of PPACA Provisions That Could Affect You.

Patient Protection and
Affordable Care Act (PPACA)
A Timeline of PPACA Provisions
That Could Affect You
2010
2018
2014
2010
Insurance plans prohibited
from imposing lifetime
benefit limits and restricted
annual limits.
Insurance plans required to
carry dependents up to the
age of 26.
Insurance plans required to
cover preventive services
without cost sharing.
Insurance plans prohibited
from denying coverage to
individuals under the age of
19 based on pre-existing
conditions.
Temporary (until 2014) high
risk pools established for
individuals (older than 19)
who are denied coverage
based on pre-existing
conditions.
Insurance plans prohibited
from rescinding coverage
except in cases of fraud.
2010 Cont’d
First Phase of Small Business Tax Credit:
Small businesses with less than 25 employees
and average annual wages of less than
$50,000 are eligible for tax credits of up to
35% of the employer’s contribution toward
the employee’s health insurance premium.
Employers must subsidize at least 50% of
their employees’ premiums in order to be
eligible for the tax credit. Credit only
available through 2013.
Establish an internet website
(www.healthcare.gov) to help
residents identify health coverage
options (effective July 1) and develop
a standard format for presenting
information on coverage options.
Create the Consumer Operated and
Oriented Plan (Co-Op) program to
foster the creation of non-profit,
member-run health insurance
companies in all 50 states. $6 billion is
appropriated to finance the program
and award loans and grants to
establish Co-Ops by July 1, 2013.
States begin reviewing premium
trends and companies must justify
increases over certain thresholds.
There is no new power to block rate
increases but plans may be excluded
from exchanges.
2011
Insurance plans required to comply
with new medical loss ratios (MLR):
80% for individual and small group
plans and 85% for large group plans.
Companies required to provide
rebates to consumers if they fail to
meet the MLRs.
Funding available for states to begin
establishing Exchanges until January
1, 2015.
Medicare Part D beneficiaries that fall
into the “donut hole” will receive a
50% discount on covered brand-name
prescriptions. This will grow to a 75%
discount by 2020.
Over-the-counter drugs not
prescribed by a doctor may not be
reimbursed through an FSA or HRA
nor on a tax free basis through an
Archer MSA or HSA.
Closer Look at Medical
Loss Ratios
“Other non-claims costs,” such as administrative costs, cannot be more
than 15% of the premium in the large group market or 20% in the small
group/individual markets.
In January 2011, HHS deemed that agent commissions must fit within
that 15%/20%, leading to a squeeze on agent compensation.
The Big “I” is focused on congressional legislation that would
statutorily exclude agent compensation from the MLR formula. In the
112th Congress, Reps. Mike Rogers (R-MI) and John Barrow (D-GA)
introduced H.R. 1206, which garnered 221 bipartisan cosponsors.
Also in the 112th, Senators Mary Landrieu (D-LA) and Johnny Isakson
(R-GA) introduced S.2288, the “Access to Professional Health Insurance
Advisors Act of 2012”, which gained 10 bipartisan cosponsors.
2012
MLR Rebates: Beginning in 2012, on August
1st of each year rebates are due to consumers
if their insurer did not meet the requisite MLR
ratio for the previous year. For 2012 only,
insurers must also send notices to all
customers regarding MLRs and rebates,
whether they are due to receive a rebate or
not.
Employers required to report
cost of employer sponsored
group health coverage on
employee W-2s for 2012 tax year.
This value is not taxable.
Summary of Benefits and Coverages:
Beginning September 23, 2012 health
plans must provide a standardized
and easy to understand summary of
benefits and coverages as well as a
glossary of commonly used
insurance terms developed by HHS.
2013
Increase Medicare tax rate on wages
by 0.9% (from 1.45% to 2.35%) on
earnings over $200,000 for individual
taxpayers ($250,000 for joint filers).
3.8% tax increase on investment income for
taxpayers making $200,000 per year
($250,000 for joint filers); however in real
estate transactions there is an exemption in
current law for $250,000 on the sale of a
principal residence ($500,000 for joint
filers).
Contributions to FSAs limited to
$2,500 per year.
(Repealed by the American Taxpayer Relief Act
in Jan. 2013) CLASS Act: A national long term
care assistance/disability insurance plan is
established. The benefit is tied to one’s inability
to perform two or three Activities of Daily
Living (ADLs) and the benefit amount is varied
based on the “scale of functional ability” with a
$50-7/day cash benefit. All working adults will
be automatically enrolled in the program unless
they choose to opt-out.
2013 Cont’d
(Delayed– likely until Fall 2013) Beginning
March 1, 2013, employers must provide a
written notice to all employees with
information on the following: (1) the
existence of exchanges and contact
information for assistance, (2) the availability
of premium subsidies through exchanges and
(3) that if the employee purchases health
insurance through an exchange, they will
lose any employer contribution and that all
or a portion of any contribution may be
excludable from income for tax purposes.
On October 1, 2013, health insurance
exchanges must be ready to begin open
enrollment.
2014
Exchanges are fully up and running, and
open to individuals and small businesses
(2-100 employees, although small group
can be limited to 50 employees and under
until 2016). Exchanges will include four
tiers of private plans(Bronze- 60% actuarial
value, Silver-70%, Gold-80%, Platinum90%, and Catastrophic coverage).
Premium tax credits (subsidies for
purchase of health insurance) available via
exchanges for individuals/families with
incomes between 100% and 400% of
federal poverty level who do not receive
employer based coverage.
Insurance plans required to abide by
guaranteed issue, minimum benefit
standards, revised rate bands for
individual and small group market.
Employers with more than 200 employees
would be required to automatically enroll
employees into health insurance plans
offered by employer (employees may optout).
2014 Cont’d
Individual Mandate: Individuals required
to purchase health insurance or face a tax
penalty (see slide 13 for more info).
Employer Mandate: Employers with 50 or
more employees must offer health
insurance to at least 95% of full time
employees or be subject to fines (see slide
14 for more info).
Phase II of Small Business Tax Credit: Small
businesses with less than 25 employees and
average annual wages of less than $50,000 are
eligible for tax credits of up to 50% of the
employer’s contribution toward the
employee’s health insurance premium.
Employers must subsidize at least 50% of their
employees’ premiums in order to be eligible
for the tax credit. Credit only available for two
years.
New tax is levied on insurance companies
based on net premiums written. This tax
will raise an estimated $8 billion in 2014,
reaching $14.3 billion by 2018. The tax
does not sunset and is indexed to
inflation thereafter.
2014 Cont’d
States must expand Medicaid to 133% of federal
poverty level. States will receive 100% federal
financing from 2014-2016, 95% financing in 2017,
94% financing in 2018, 93% financing in 2019, and
90% financing in 2020 and beyond. However, the
Supreme Court struck down the ability of the
federal government to withhold their portion of
current Medicaid funds to force states to comply
with the expansion.
Allow states the option of merging
the individual and small group
markets in Exchanges.
Waiting periods for coverage cannot
exceed 90 days.
Closer Look at
Individual Mandate
Beginning in 2014, virtually every U.S. citizen and legal resident will be required to
purchase health insurance or face a tax penalty.
There are certain exemptions from the individual mandate including: those who
choose not to buy a policy for religious reasons, undocumented immigrants,
incarcerated citizens, members of Native American tribes, those with family income
below the threshold requiring a tax return.
To satisfy the mandate, individuals must obtain health insurance for the entire year
through one of the following sources: Medicare, Medicaid, CHIP, veteran’s health
programs, a plan offered by an employer, insurance purchased on your own that is
at least at the Bronze level (60% actuarial value).
The penalty for non-compliance will be phased-in according to the following
schedule: $95 (or 1% of income, whichever is higher) in 2014, $325 (or 2% of income)
in 2015, and $695 (or 2.5% of income) in 2016. After 2016, the penalty will be
increased annually by the cost-of-living adjustment.
Closer Look at Employer
Mandate
Beginning in 2014, employers with 50 or more full-time employees that
do not offer coverage to at least 95% of full time employees and have at
least one employee who receives a premium tax credit will be assessed
a fee of $2,000 per full-time employee, excluding the first 30 employees
from the assessment.
Employers with 50 or more full-time employees that offer coverage to
at least 95% of employees but have at least one employee receiving a
premium tax credit, will pay the lesser of $3,000 for each employee
receiving a premium tax credit or $2,000 for each full-time employee,
excluding the first 30 employees from the assessment. (Effective
January 1, 2014).
Employers with 200-plus full-time employees must automatically
enroll their employees into health insurance plans.
2016
States permitted to form health care choice
compacts, allowing insurers to sell policies in
any state participating in the compact.
2017
States are permitted to allow businesses with
more than 100 employees to purchase
coverage in SHOP Exchanges.
2018
“Cadillac Tax” takes effect. A 40% excise tax is levied
on insurers of employer-sponsored health plans with
aggregate values that exceed $10,200 for individual
and $27,500 for family. The tax is applied to the
amounts that exceed the threshold and it will be
indexed for inflation.