Patient Protection and Affordable Care Act (PPACA)

 

 Updated: 2-9-13

Health Care Reform Timeline

On March 23, 2010, President Obama signed the health care reform bill, or Affordable Care Act (ACA), into law. ACA makes sweeping changes to the U.S. health care system. ACA’s health care reforms, which are primarily focused on reducing the uninsured population and decreasing health care costs, will be implemented over the next several years.  

This Marrs Maddocks & Associates Legislative Brief provides a timeline of the implementation of key ACA reforms that affect employers and individuals. Please read below for more information and contact Marrs Maddocks & Associates with any questions about how you can prepare for any of the health care reform requirements.

2010

EXPANDED INSURANCE COVERAGE

ACA also added a new tax provision related to health insurance coverage for these adult children. Effective March 30, 2010, amounts spent on medical care for an eligible adult child can generally be excluded from taxable income.

Note: A “grandfathered plan” is one in which an individual was enrolled on March 23, 2010. A plan will retain its grandfathered status even if covered individuals renew their coverage after March 23, 2010, family members are added to coverage or new employees (and their families) enroll for coverage. A health plan will lose its grandfathered status if there are significant cuts to benefits or increases in participants’ out-of-pocket spending. Grandfathered status is significant because many ACA reforms do not apply to grandfathered plans.

HEALTH INSURANCE REFORM

HEALTH PLAN ADMINISTRATION

A grace period for some of ACA’s additional claims and appeals requirements was provided until plan years beginning on or after Jan. 1, 2012. Plans and issuers must also implement an external review process that meets applicable state or federal requirements.

MEDICARE/MEDICAID

FEES AND TAXES

2011

EXPANDED INSURANCE COVERAGE

HEALTH PLAN ADMINISTRATION

MEDICARE/MEDICAID

FEES AND TAXES

2012

HEALTH INSURANCE REFORM

EXPANDED INSURANCE COVERAGE

HEALTH PLAN ADMINISTRATION

Plans and issuers must start providing the summary by the following deadlines:

Fees and taxes

2013

HEALTH PLAN ADMINISTRATION

FEES AND TAXES

2014

COVERAGE MANDATES

HEALTH INSURANCE EXCHANGES

ACA provides for health insurance exchanges to be established in each state in 2014. Individuals and small employers will be able to shop for insurance through the exchanges. Small employers are those with no more than 100 employees. If a small employer later grows above 100 employees, it may still be treated as a small employer. However, states may limit employers’ participation in the exchanges to businesses with up to 50 employees until 2016. Large employers with over 100 employees are to be allowed into the exchanges in 2017.

States have three options with respect to their exchanges. They can (1) establish and run a state-based exchange, (2) have HHS establish a federally facilitated exchange (FFE) for their residents or (3) partner with HHS so that some FFE functions can be performed by the state.

The health care reform legislation provided that workers who qualified for an affordability exemption to the coverage mandate, but did not qualify for tax credits, could use their employer contribution to join an exchange plan. This requirement is known as the “free choice voucher” provision. The federal appropriations bill signed by President Obama on April 15, 2011, eliminated the free choice voucher provision from health care reform.  

HEALTH INSURANCE REFORM

Additional health insurance reform measures will be implemented beginning in 2014.

EMPLOYER WELLNESS PROGRAMS

Under health care reform, the rules for employer wellness programs will be changed slightly. Existing wellness regulations under HIPAA permit wellness incentives of up to 20 percent of the total premium, as long as the program meets certain conditions. Under health care reform, the potential incentive increases to 30 percent of the premium in 2014 for employee participation in the program or meeting certain health standards. Employers must offer an alternative standard for those employees whom it is unreasonably difficult or inadvisable to meet the standard. Following a governmental study on wellness programs, the incentive may be increased to as much as 50 percent.

FEES AND TAXES

 

 

2018

HIGH COST PLAN EXCISE TAX

A 40 percent excise tax is to be imposed on the excess benefit of high cost employer-sponsored health insurance. This tax is also known as a “Cadillac tax.” The annual limit for purposes of calculating the excess benefits is $10,200 for individuals and $27,500 for other than individual coverage. Responsibility for the tax is on the “coverage provider” which can be the insurer, the employer or a third-party administrator. There are a number of exceptions and special rules for high coverage cost states and different job classifications.

 


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