With the passage of the new health care reforms, one underlying question many may ask is “when will the changes take effect?” The following is a summary of some of the key changes and the dates they will be implemented:
Beginning in July of 2010, employees with health problems who have been uninsured for 6 months may be eligible to obtain coverage through a new high risk pool program. A temporary reinsurance program will help employers who provide coverage to their retirees in maintaining this coverage.
Beginning in plan years on or after September 23, 2010, pre-existing condition exclusions are prohibited for children under 19; dependents up to age 26 will be able to obtain coverage through parents’ health plans; routine preventive care will be covered without cost-sharing; and limits on lifetime coverage will be eliminated along with other changes.
In 2014 individuals and small businesses will be able to purchase coverage through state-based exchanges regardless of health status. Premiums cannot vary because of health status. Individuals will be required to purchase health insurance or pay a penalty. Subsidies will be available on a sliding scale to help individuals or families with incomes up to 400 percent of the federal poverty level to purchase insurance through new state-based exchanges.
While some health care payers may look to consolidate assets and begin planning for market exits, other private and public payers will look to try out new payment systems, reduce administrative costs, and pilot new strategies to improve the health of populations while lowering the cost of care. Enterprising providers will find partners and strategies that create and capture value and will assume more accountability for outcomes than ever before.
Included in this landscape of change will be the reaction of employers in handling insurance for their employees. One of the largest adjustments with PPACA* will be the nationwide pressure for employer-sponsored coverage. Both small and large businesses will approach employer-based insurance differently now.
Here are some basic elements from the health care reform that every business should know:
- It is important to note that the law does not require employers to provide health insurance coverage.
- The law considers employees working more than 30 hours to be full-time employees in regards to providing insurance.
- If an employee of a non or insufficient insurance providing employer obtains insurance through a state insurance exchange and receives a premium credit, the employer will be fined.
- New employees of companies with more than 200 employees must be automatically enrolled into the employer sponsored plan within 90 days of hire.
- Fines for employers can be larger for employers that provide “unaffordable” coverage than those who simply provide no coverage.
- The summation of hours that part-time employees work will be calculated into the formula evaluating business size.
*PPACA is the Patient Protection and Affordable Care Act, signed into law on March 23, 2010.
Information Provided by Leavitt Partners – Advising People Who Invest in Health Care.
Leavitt Partners was founded by Michael O. Leavitt, former Secretary of Health and Human Services. Leavitt Partners brings together partners from across governments and global industry that share a vision and passion for making a difference. The organization advises clients that invest in health care and food safety. For more information, visit www.leavittpartners.com.