Health Care Reform

No one could miss the fact that health care reform has been a very public and political debate in the past year. In March of this year President Obama signed the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010. Even though there are several states, including Virginia, challenging the legislation, employers should be aware of the near term requirements. Note, these provisions are very briefly discussed below.

Effective September 23, 2010 are the following provisions:

  • If you have a “grandfathered” plan (in existence on March 23), coverage must be offered to dependent children until they turn 26, if not covered under another plan.
  • Lifetime limits can no longer be imposed.
  • Plans cannot impose pre-existing conditions on enrollees who are younger than 19. All pre-existing condition exclusions will disappear beginning in 2014.
  • Group health plans and health insurers cannot rescind coverage.
  • New plans must provide certain preventative health services.

Beginning January 1, 2010, employers with fewer than the equivalent of 25 full-time employees that offer health insurance may be eligible for a tax credit toward the cost of health coverage. This credit is tied to average compensation and number of employees.

Provisions of major importance that have a future effective date include:

  • Beginning in 2014, employers with more than 50 employees that fail to provide health insurance will pay a penalty.
  • Also effective in 2014, employers that offer unaffordable coverage or coverage that doesn’t qualify as a “qualified health benefits plan” will pay a monthly excise tax for each full time employee who receives assistance and cost-sharing reductions for insurance purchased through an exchange.

There will be more to come on the changes required by the recent legislation in future editions of "Listen to Larry."

The above information is provided for informational purposes and is not to be considered legal advice. Questions, call Larry Elinskas at 804-966-8100.