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New Federal health reform laws are complete for this year. The Senate modified and passed reconciliation bill HR4872, which was passed as amended by the House and sent to the President for signature. This means that the initial 2409 page Reform bill signed into law March 23, 2010 has been modified by this new 153 page bill.
We now enter the “interpretation” phase of lawmaking, with federal authorities drafting rules and procedures to guide us on how to react to the new laws. This is the time when authorities begin answering the many “what does this mean”, “when exactly does it apply”, and “how do we do this?” questions. We unfortunately do not have a timetable on when to expect these rules.
The new laws impact most aspects of health care. Smaller employers may be eligible for premium assistance and larger employers will be subject to new rules and potential penalties. Individuals will be required to purchase insurance with many becoming eligible for premium assistance from the government, and insurance companies will have to accept all applicants at comparable prices without regard to pre-existing conditions. Provider reimbursements under public plans will change and a wide assortment of new taxes and fees are to be imposed to help finance the expansion of benefits.
We have posted a summary prepared by one of our professional associations, NAHU, on our website as well as the original HR 3590 bill and the changes HR 4872. These documents can also be viewed at http://www.sevenhillsservice.com/health-reform-legislation .
The law’s constitutionality is also being challenged by 14 States Attorneys General who have initiated lawsuits regarding the individual mandate provisions. The statuses of these suits are uncertain, but if it is successful could have material impact on the new law. Again, we unfortunately do not have a timeline on this action.
For now, highlighted below are changes beginning in 2010, which generally means on the plan year next following 6 months from enactment. For most employers we expect that this will mean renewal dates starting October 1, 2010 and later:
- Businesses with fewer than 25 employees and average wages of less than $50,000 could qualify for a tax credit up to 35% of the cost of the health insurance premium.
- Any individual that has been uninsured for at least 6 months and has a pre existing medical condition can receive coverage through a high risk pool to be created by the Department of Health and Human Services (DHHS).
- New 10% excise tax on indoor tanning.
- Fully insured plans will become subject to 105(h) discrimination rules.
- Plans will no longer include lifetime maximums.
- Preventive care must be covered at 100% with no cost sharing on group or individual plans. This may include preventative dental and vision care for children.
- For children under the age of 19, insurers cannot exclude pre-existing conditions from coverage; however, for individual policy coverage insurers can still deny children.
- Dependants may be covered on their parent's plan up to the age of 26, if they are not eligible for coverage through an employer. This may include children who are married as well.
- State based information exchange - States must develop information portals to provide information on sources of affordable coverage including an internet site. Information must include private health coverage options, Medicaid, CHIP, the new high risk pool coverage and existing high risk pool options.
- Creates a new temporary reinsurance program to help companies that provide early retiree health benefits for those employees age 55-64 to help offset the cost.
The next step is the deep analysis to discern how specific employers are affected, when and how they are to comply, and what the new options might be and if assistance is available. We will provide guidance as best we can, and we continue to appreciate the professional relationships we have with all our clients. Thank you.
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