Healthcare Reform: What You Need To Know Now

Written by: Kristy Kwan, Benefits and Retirement Plan Administrator

Healthcare reform is underway, and there are hundreds of articles and newsletters on the changes and programs that will be implemented within the next decade. The amount of information out there on “The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act” is overwhelming, and only some of it will apply to employers. To simplify matters, we’ve created a “cheat sheet” below of the changes (that will occur within the next 6-8 months) that may specifically affect our clients.

Changes being implemented on 09/23/2010 (exactly 6 months from the date the Act was signed):

• Dependent Coverage up to 26th Birthday – requires new health plans and certain grandfathered plans to allow dependents to remain on their parent’s insurance policy (at the parent’s choice) up to their 26th birthday.
• No Lifetime Limits – insurance companies are prohibited from putting a lifetime insurance cap on coverage.
• No Annual Limits – tightly restricts the use of annual limits (for services) on all new plans and grandfathered group health plans.
• Discrimination Based on Salary is Prohibited – new group health plans are prohibited from establishing any eligibility rules that discriminate in favor of higher wage employees.
• Pre-Existing Conditions in Children – new health plans and grandfathered group health plans may not deny coverage to children with pre-existing conditions.

Changes being implemented for the end of 2010 or 2010 tax year

• Small Business Tax Credit – tax credits of up to 35% of premiums will be available to companies that choose to offer employee coverage, as an incentive to make employee coverage more affordable. Qualified employers must pay at least 50% of each employee’s premium costs.
• High-Risk Pool – individuals who cannot obtain insurance on their own and have been uninsured for at least 6 months will be eligible to apply for coverage through this temporary high-risk pool. Employers are prohibited from sending individuals to the pool (at the risk of being fined).
• Early Retirees Assistance – a temporary re-insurance program will be established to help offset costs of expensive premiums for employers and retirees ages 55-64.
• Indoor Tanning Tax – a tax of 10% will apply on indoor tanning services. This is estimated to raise about $2.7 billion between 2010 and 2019.

There are hundreds of modifications to healthcare that are set to take effect between now and 2018 (and beyond), but they will not happen overnight. Changes will be introduced slowly over the course of the next decade. MMC, Inc. will be sure to notify our clients and employees well in advance so we are prepared to meet any new guidelines or regulations. If you would like to learn more about the specifics of the Health Care Reform, the White House has created a website that answers many common questions and offers more details on the changes to come. As always, MMC clients can also contact the MMC Benefits Department with any questions you may have at (800) 899-6624.  

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