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Healthcare Insurance: Where do we go from here?
The world of Healthcare Insurance has been dramatically changed in the past few weeks with the recent passage of two major new laws. They follow on the heels of several laws passed and amended in 2009 as well as several Presidential Executive Orders.
Now, the question everyone has is, “How does this affect me, my business, my family, or my friends?” The changes are so far reaching that no one short summary can be put together that will explain it. Many of the changes are still very general and must wait for various agencies of the federal government to issue guidelines and rules. Most of the changes that will really help those individuals that need the help the most will not be implemented for at least 4 years.
As promised last year, we will continue to provide you as much information as we can to help you understand what is going on. Of all the changes made, very few will be implemented in 2010. It is helpful to define the term “Plan Year” in order to understand many of the effective dates. “Plan Year” refers to the 12 month period that your group or individual insurance policy runs. Plan years can start in any month of the year. They normally start the month that the policy was first purchased. In the case of a group policy, this means the month the policy was purchased; not necessarily the month a specific employee began their coverage.
We are limiting these topics to those that we believe will affect the majority of our clients. Please note that this list is far from all inclusive. Topic Description Effective Date Grandfathered Health Plans Individuals and groups may keep their existing plans only if no plan changes are made other than adding or deleting employees or their dependents. Union plans may make changes and still be grandfathered. March 2010 Lifetime Benefit Limits Prohibits life time limits Plan year beginning after September 2010 Annual Benefit Limits Annual Benefit Limits are allowed only on non-essential benefits as defined by the Department of Health and Human Services Plan years beginning after September 2010 but before January 2014 Increased Dependent Coverage Increases the age of a dependent allowed on the plan to age 26. Dependents are defined the same as a Dependent for income tax purposes. Plan years beginning after September 2010 Coverage of Preventive Care Mandates coverage of specific preventive services with no cost sharing (Deductibles or Co-Insurance).
• evidence-based items or services with a rating of `A' or `B' in the current recommendations of the United States Preventive Services Task Force;
• immunizations recommended by the Advisory
Committee on Immunization Practices of the Centers for Disease Control and Prevention with respect to the individual involved;
• For infants, children, and adolescents, evidenceinformed preventive care and screenings provided for in the comprehensive guidelines supported by the Health Resources and Services Administration.
• For women, additional preventive care and screenings provided for in comprehensive guidelines supported by the Health Resources and Services Administration.
• For women, the recommendations issued by the United States Preventive Service Task Force regarding breast cancer screening, mammography, and prevention shall be considered the most current other than those issued in or around November 2009 Plan years beginning after September 2010 Small Employer Tax Credits Makes available tax credits for qualified small employer contributions to purchase coverage for employees. In order to qualify, the business must have no more than 25 full-time equivalent employees, pay average annual wages of less than $50,000 and provide qualifying coverage. The full amount of the credit will be available to employers with 10 or fewer employees and average annual wages of less than $25,000, and will phase out when those thresholds are exceeded. The average wage threshold for determining the phase-out of credits will be adjusted for inflation after 2013. Small employers will receive a maximum credit of up to 50% of premiums for up to 2 years if the employer
contributes at least 50% of the total premium cost. The credit would phase out entirely for employers of more than 25 employees whose average annual salaries exceeded $50,000.
Employers will not be eligible to use the credit for certain employees, including defined “seasonal workers,” self-employed individuals, two percent shareholders of an S corporation (as defined by section 1372(b), five percent owners of a small
business (as defined by section 416(i)(1)(B)(i)) and dependents or other household members. However, leased employees are eligible employees for the credit. Employers receiving credits will be denied any deduction for health insurance costs equal to the credit amount. March 2010
Rate Review In addition to the current Rate Reviews performed by each State, the federal government will now monitor health insurance carrier premiums to prevent unreasonable increases and publicly disclose such information. March 2010 Preexisting Condition Coverage for Individual Market Consumers Creates high-risk pool coverage for people who cannot obtain current individual coverage due to preexisting conditions. This national program can work with existing state high-risk pools and will end on January 1, 2014, once the Exchanges become
operational and the other preexisting condition and guarantee issue provisions take effect. It will be financed by a $5 billion appropriation. Employers are prohibited from putting individuals into the high-risk pool with associated fines. July 1, 2010 Web-Based
Information
Portals Requires the states and the Secretary of DHHS to develop information portal options for state residents to obtain uniform information on sources of affordable coverage, including an Internet site. Information must be provided on private health
coverage options, Medicaid, CHIP, the new high-risk pool coverage and existing state high-risk pool options. July 1, 2010
Emergency Services Mandates coverage of emergency services at in-network level regardless of the provider network status.
Many of the above items are welcome additions to most of us with individual or group health plans. Unfortunately, anyone who believes that these coverages can possibly be increased without a corresponding increase in our health insurance premiums is naïve. Our premiums will go up drastically in the next few plan years even though the federal government has promised to watch them.
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