Duane Morris LLP - Healthcare Reform Timeline

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Healthcare Reform Center

Healthcare Reform Timeline - Changes Affecting Employers

2010

Establish a temporary national high-risk pool for health insurance for individuals with pre-existing medical conditions. (Effective June 21, 2010 and expiring January 1, 2014).
Provide dependent coverage for adult children up to age 26 for all individual and group policies. (Effective June 21, 2010).
Individual and group health plans prohibited from placing lifetime limits on the dollar value of coverage and prior to 2014, plans may only impose annual limits as determined by the Secretary. No insurer may rescind coverage except in cases of fraud and prohibit pre-existing condition exclusions for children.
Require qualified health plans to provide at a minimum coverage without cost-sharing for preventive services rated A or B by the U.S. Preventive Services Task Force. Immunizations, preventive care for infants, children, and adolescents, and additional preventive care and screenings for women should be included. (Effective September 23, 2010). First dollar coverage goes into effect January 1, 2011.
Provide tax credits insurance coverage to small employers with no more than 25 employees and average annual wages of less than $50,000.
Create a temporary early retirement reinsurance program for employers providing health insurance coverage to retirees over age 55 who are not eligible for Medicare. (Effective June 21, 2010 until January 1, 2014).
Require health plans to report the proportion of premium dollars spent on clinical services, quality, and other costs and provide rebates to consumers for the amount of the premium spent on clinical services and quality that is less than 85% for plans in the large group market and 80% for plans in the individual and small group markets. (Requirement to report medical loss ratio effective plan year 2010; requirement to provide rebates effective January 1, 2011).
Establish a process for reviewing increases in health plan premiums and require plans to justify increases. Require states to report on trends in premium increases and recommend whether certain plans should be excluded from the Exchange based on unjustified premium increases.
Limit the deductibility of executive and employee compensation to $500,000 per applicable individual for health insurance providers.
Guaranteed renewal requirements go into effect September 23, 2010.

Effective January 1, 2011

Require chain restaurants and food sold from vending machines to disclose the nutritional content of each item.
W-2 reporting for the value of the benefits provided by employer for each employee. (Effective January 1, 2011).
Health Savings Account withdrawals increased from 10% to 20% for those non-qualified medical expenses by those under age 65. (Effective January 1, 2011).

Effective January 1, 2013

Provide states that offer Medicaid coverage of and remove cost-sharing for preventive services recommended (rated A or B) by the U.S. Preventive Services Task Force and recommended immunizations with a one percentage point increase in the federal medical assistance percentage (FMAP) for these services.
Federal subsidiaries for brand-name prescriptions filled in the Medicare Part D coverage gap are phased in (to 25% in 2020, in addition to the 50% manufacturer brand-name discount).
Increase the threshold for the itemized deduction for claiming unreimbursed medical expenses from 7.5% of adjusted gross income to 10% of adjusted gross income. Individuals age 65 and older may claim the increase for tax years 2013 through 2016.
Increase the Medicare Part A (hospital insurance) tax rate on wages by 0.9% (from 1.45% to 2.35%) on earnings over $200,000 for individual taxpayers and $250,000 for married couples filing jointly and impose a 3.8% assessment on unearned income for higher-income taxpayers.
Limit the amount of contributions to a flexible spending account for medical expenses to $2,500 per year increased annually by the cost of living adjustment.
Impose an excise tax of 2.3% on the sale of any taxable medical device.
Eliminate the federal income tax-deduction for employers who receive 28% Medicare Part D retiree drug subsidy payments.
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 and the District of Columbia to offer qualified health plans.
Simplify health insurance administration by adopting a single set of operating rules for eligibility verification and claims status (rules adopted July 1, 2011; effective January 1, 2013).
Electronic funds transfers and health care payment and remittance (rules adopted July 1, 2012; effective January 1, 2014).
Health claims or equivalent encounter information, enrollment and disenrollment in a health plan, health plan premium payments, and referral certification and authorization (rules adopted July 1, 2014; effective January 1, 2016).
Health plans must document compliance with these standards or face a penalty of no more than $1 per covered life.

Effective January 1, 2014

U.S. citizens and legal residents are required to have qualifying health coverage.
Assess employers with 50 or more employees that do not offer coverage and have at least one full-time employee who receives a premium tax credit a fee of $2,000 per full-time employee, excluding the first 30 employees from the assessment.
Employers with 50 or more employees that offer coverage but have at least one full-time employee receiving a premium tax credit, will pay the lesser of $3,000 for each employee receiving a premium credit or $2,000 for each full-time employee, excluding the first 30 employees from the assessment.
Require employers with more than 200 employees to automatically enroll employees into health insurance plans offered by the employer. Employees may opt out of coverage.
State-based American Health Benefit Exchanges and Small Business Health Options Program (SHOP) Exchanges are created. Individuals and small businesses with up to 100 employees can purchase qualified coverage.
Require guarantee issue and renewability and allow rating variation based only on age (limited to 3 to 1 ratio), premium rating area, family composition, and tobacco use (limited to 1.5 to 1 ratio) in the individual and the small group market and the Exchanges.
Reduce the out-of-pocket limits for those with incomes up to 400% FPL to the following levels:

100-200% FPL; one-third of the HSA limits ($1,983/individual and $3,967/family);
200-300% FPL; one-half of the HSA limits ($2,975/individual and $5,950/family);
300-400% FPL; two-thirds of the HSA limits ($3,987/individual and $7,973/family).

Limit deductibles for health plans in the small group market to $2,000 for individuals and $4,000 for families unless contributions are offered that offset deductible amounts above these limits.
Maximum waiting periods for coverage limited to 90 days.
Define an essential health benefits package that includes a comprehensive set of services, covers at least 60% of the actuarial value of the covered benefits, limits annual cost-sharing to the current law HSA limits ($5,950/individual and $11,900/family in 2010), and is not more extensive than the typical employer plan.
Require the Office of Personnel Management to contract with insurers to offer at least two multi-state plans in each Exchange.
States may merge the individual and small group markets.
Create a temporary reinsurance program to collect payments from health insurers in the individual and group markets to provide payments to plans in the individual market that cover high-risk individuals.
Provide refundable and advanceable premium credits and cost sharing subsidies to eligible individuals and families with incomes between 133-400% FPL to purchase insurance through the Exchanges.
Reduce the out-of-pocket amount that qualifies an enrollee for catastrophic coverage in Medicare Part D (effective through 2019).
Permit employers to offer employees rewards from 30% to 50% of the cost of coverage of participating in a wellness program and meeting certain health-related standards.
Impose fees on the health insurance sector.

Effective January 1, 2015 and Beyond

Impose an excise tax on insurers of employer-sponsored health plans with aggregate values that exceed $10,200 for individual coverage and $27,500 for family coverage. (Effective January 1, 2018).

For additional information on any of the issues referenced on this page, please contact C. Mitchell Goldman, David E. Loder or the Duane Morris attorney with whom you are regularly in contact.