Health Care Reform: A High-Level Provision Summary

As your partner in health care, Group Health Cooperative of Eau Claire is keenly aware of the effects recent health care reform has on our members. To help you navigate these changes, we have created a summary, highlighting provisions of the recently passed Patient Protection and Affordable Care Act most likely to affect our employer groups and members. Anticipated effective dates are included with each provision. Actual effective dates and details for each provision will be determined by the Health and Human Services Secretary and/or other legislative rule making entities.

In addition, we encourage you to review our listing of Frequently Asked Questions for answers to some of the most current questions coming from employers.

This summary is provided for your information and many of the following provisions may be subject to change and/or further regulation modifications. This summary is not intended as legal advice. It is important that you consult with your tax advisor regarding questions specific to your unique situation.


Changes – Insurance Coverage/Benefits
Year Effective Provision Details
2010 Provides rebates for the Medicare Part D “donut hole” - specifically a $250 rebate. Changes will be implemented to reduce the donut hole until it is eliminated in 2020.
2010 Prohibits pre-existing condition exclusions for children
2010 Prohibits non-fraud related policy rescissions
2010 Prohibits lifetime limits on the dollar value of health care coverage
2010 Annual dollar limits for coverage restricted
2010 Provides dependent coverage for children up to age 26 including married dependents
2010 Prohibits group health plans from imposing pre-existing condition exclusions on coverage
2010 Provides health care claim cost reduction through a risk-sharing plan for early retirees, ages 55-64, until insurance exchanges are operational
2010 Provides requirements for internal and external appeals processes for coverage determination and claims decisions
2010 Prohibits excessive waiting periods for insurance coverage – may not exceed 90 days
2010 Requires a Health Plan to cover Emergency Services without prior authorization, whether or not the Provider is in or out of network
2011 Excludes HRA/HSA/FSA/MSA reimbursement for non-prescription OTC drugs
2012 Defines essential health benefits that are to be covered by Health Plans
2013 Limits Health Flexible Savings Account Contributions
2014 Requires employers with more than 200 full-time employees to auto-enroll all employees into their health plan
2014 Provides coverage for participation in clinical trials
2014 Increases the limits that a plan can provide for Wellness Plan incentives
2014 Annual dollar limits for coverage prohibited


Changes - Tax Credits
Year Effective Provision Details
2010 Provides for a small business tax credit up to 35% of the employer’s contribution toward each employees health insurance premium if the employer contributes at least 50% of the total premium cost
2010 - 2011 Expands the Adoption Credit and Adoption Assistance Program
2011 Requires an additional tax for withdrawals from HSAs and MSAs for members younger than 65 for non-qualified medical expenses
2011 Allows small businesses to create cafeteria plans to provide tax-free benefits for their employees
2011 Requires employers to report health coverage costs on an employee’s Form W-2
2013 Increased threshold for claiming itemized deductions for medical expenses – from 7.5% to 10%
2013 Provides an additional hospital insurance tax for high wage workers - 0.9% for individuals earning over $200,000 and married joint earners over $250,000


Changes – Insurance Industry
Year Effective Provision Details
2010 Establishes a Patient-Centered Outcomes Research Institute – research will focus on comparative effectiveness for evidence based standards of care.
2010 Mandates the creation of an internet portal to facilitate consumer and small employer purchase of health care coverage.
2010 Provides for an insurance rate review process- health insurance premium increases will be validated.
2011 Requires Medical Loss Ratios for Insurance Companies to be at 80% for individual and small groups and 85% for large groups.
2014 Provides for Guaranteed Issue of Health Insurance to individuals regardless of health status.
2014 Limits factors insurance companies can use to determine premium rates.
2014
  • Health insurance ‘Exchanges’ will be established, which will allow people to comparison shop for standardized health coverage. Multi-State options are projected to be available to allow freedom of choice.
  • Tax credits will be made available to ensure people can obtain coverage; the current projection is for tax credits for those whose income is above Medicaid eligibility standard and below 400% of the Federal Poverty Level.
  • A voucher system will also be implemented so that workers may choose between employer-sponsored coverage or using the amount of their employer contribution toward coverage in an Exchange.
  • Starting in 2014, most individuals will be required to have coverage or pay a penalty.
  • Also in 2014, employers with 50 or more employees who do not offer coverage will pay an annual per-employee fee if any of their employees receives tax credits to obtain coverage.