Whether you support the current Patient Protection and Affordable Care Act or
not, it became law last week as President Obama signed the bill that had been
previously approved by the House and the Senate. There are still some pieces
that must be added and signed through the Health Care and Education
Reconciliation Act, but that too has been passed by the House and the Senate and
is on the fast track to become law. Some love it, some hate it, but very few
know what’s really in the bills/laws. Here we’ll take a look through the
provisions in the new law and in the reconciliation bill. Keep in mind that as
with all new laws, the implementation methods are still to be determined. Some
states have also already threatened to challenge the law on the basis of
unconstitutionality, so some things may change, but for now, here are the key
provisions we’ve gathered:
Insurers will be required to offer coverage for children under their parents’ policy up to the age of 26 and cannot exclude children on the basis of pre-existing conditions.
National high-risk pools will be set up to insure adults with pre-existing conditions from 2010 through 2014.
Beginning 2014, state-based insurance exchanges will be created where small businesses and individuals can band together into groups to purchase health insurance. Limits will be placed on the factors that can vary premiums from one group to another and pre-existing conditions will not be allowed as a factor or a reason to exclude an individual from coverage.
Lifetime benefit limits will no longer be allowed and after 2014, annual benefit limits will also be abolished.
An insurer will only be allowed to drop coverage for an insured person in the case of application fraud.
A tax credit will be provided to small businesses with fewer than 25 employees that provide health insurance to their employees. This credit amounts to 35% of the cost of the plan.
A new process will be established by which the government will review health insurance premium increases, and if deemed to be without just cause, can exclude the insurer from the insurance exchanges.
Healthcare flexible spending account limits will be reduced to $2500 per year starting in 2013.
Non-prescription drugs will no longer be qualified expenses for healthcare FSAs or HSAs starting in 2011
The penalty for using Health Savings Account funds for non-qualified expenses will increase to 20%.
There will be a mandate that preventative care (annual physicals, well-baby exams, etc.) must be provided under all new plans without deductible or co-pay. Additionally, coverage under Medicare for certain preventative care procedures will increase to 100% of cost.
A new 10% tax on indoor tanning will be imposed.
A new, public, long-term care insurance plan will be adopted beginning in 2011 (CLASS Act).
Chain restaurants and vending machines will be required to post nutritional content of each item sold.
New annual fees will be imposed on the manufacturers of pharmaceuticals.
A new tax of 2.9% will be imposed on the sale of any medical device.
Starting 2013, the Medicare (part of FICA) tax on earned income for individuals making more than $200k/ yr or couples making more than $250k / yr will increase from 1.45% to 2.35%. Additionally, on that same group, a new Medicare tax of 3.8% will be imposed on all unearned income (interest, dividends, rents, capital gains).
By 7/1/2013, the Consumer Operated and Oriented Plan (CO-OP) will be created to foster non-profit health plans in each state through $6B in federal loans and grants.
Starting 2013, the eligibility level of itemized tax deductions for medical expenses will be raised to 10% of adjusted gross income from 7.5%.
Beginning 2014, all citizens and residents will be required to buy health insurance or pay an annual fine. By 2016, this fine amounts to $695 per person or 2.5% income per year, whichever is greater. Graduated subsidies will be provided for individuals and families within 400% of the federal poverty level.
Beginning 2014, employers with more than 50 employees will face fines for not offering health insurance.
Beginning 2014, annual out of pocket maximums will be limited in all health plans on families within 400% of the federal poverty level.
Beginning 2014, deductibles will be limited to $2k individual or $4k family for insurance purchased on the new insurance exchanges.
Beginning 2014, Medicaid (not to be confused with Medicare) will be expanded to cover everyone under age 65 making less than 133% of the federal poverty level.
Additional annual fees will be imposed on health insurers.
Beginning 2018, a new tax will be imposed on insurers of employer health plans with aggregate values over certain levels (“Cadillac Plan Tax”).
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