Health Care Clarity

Mar 29, 2010

I was listening to the news this morning, and they were interviewing a protestor who said her business will be shut down due to the changes in the recently passes health care bill.  She really did not know why this would happen, but she said no one has read the bill and “it might even require us to wear brown on Tuesdays”.  There has been a lot of information and misinformation regarding the provisions included in the recent health care law.   In addition to my newsletter, I want to reach as many as possible with some non-partisan facts about the law and its effect on the country over the next decade.


The Kaiser Family Foundation has produced one of the better summaries of the law.  I have included major items from this summary and other news sources for your information.  I hope his provides an adequate understanding of the changes and allows you to plan your organization's policies to be prepared for the changes when they come:


There is no mandate for employers to provide health insurance to employees.  However employers with more than 50 employees will be assessed a fee of $2,000 per full-time employee for the number of employees over 30 employees in the organization, if they do not offer coverage and if they have at least one employee who receives a premium credit through an Exchange.   The changes by year include:


New Health Care Bill: Changes Happening in 2010


·         Medicare recipients will receive a $250 rebate to help in closing the "doughnut hole in prescription coverage.

·         Children age 26 and younger can remain covered under their parents health insurance.

·         Health insurance companies cannot exclude coverage for pre-existing conditions for children.

·         Adults with pre-existing conditions will be eligible for coverage into high risk health insurance pools.

·         Health insurance companies will be prohibited from setting annual limits and lifetime limits on coverage.

·         New health insurance plans must provide coverage for preventative services with no out of pocket cost.

·         Those companies that offer health benefits for early retirees ages 55 to 64 will receive assistance from a temporary reinsurance program.

·         All new health insurance plans will have to comply with new regulations that lay out an appeals process for when health insurance claims are denied.

·         Small businesses that employ less than 50 people are eligible for a tax credit equal to 35% of their health insurance premiums.


New Health Care Bill: Changes Happening in 2011


·         Medicare will offer one free annual wellness visit. All new Medicare plans will offer preventative services with no out of pocket cost.

·         Those enrolled in Medicare Advantage or the Prescription Drug Plan will receive a 50% discount on brand name drugs.

·         The current penalty tax of 10% on all distributions from a HSA before the age of 65 on nonqualified medical expenses will increase to 20%.

·         Those earning more than $200,000 as an individual or $250,000 for those who file married filing jointly will have their Medicare payroll tax increased from the current 1.45% to 2.35%.


Health Care Bill: Changes Happening in 2013


·         A $2,500 annual cap will be placed on all contributions to flexible spending accounts

·         The current tax deduction that employers receive for subsidizing the prescription drug costs of their employees who are eligible for Medicare is repealed.

·         A 2.9% excise tax on the sale of medical devices will be put into place. Certain common items like glasses, hearing aids, etc. are exempted from this tax.

·         The hospital insurance tax will increase .09% for those who earn more than $200,000 ($250,000 for those married filing jointly).

·         The minimum threshold for being able to claim an itemized deduction for health care expenses increased from 7.5% to 10% of AGI although those over the age of 65 can stay at the 7.5% threshold through 2016.


Health Care Reform: Changes Happening in 2014


·         Medicaid payments to primary care doctors for primary care services will be increased to 100% of Medicare payment rates in 2013 and 2014 with 100% federal financing.

·         All US citizens will be forced to have health insurance coverage considered acceptable by the US Government or else pay a fine of $95 in 2014, $325 in 2015, $695 in 2016 (capped at 2.5% of AGI). All of the fines are per person per year except for families have a cap on the total fine of $2,250 and the fine amount for children is half of the adult fine.

·         Eligibility standards are implemented for newly formed health care exchanges.

·         Businesses with 50 or more employees will face a fine of either $2,000 or $3,000 per employee for not offering health insurance coverage.

·         Group health insurance plans have a maximum waiting period of 90 days.

·         Health insurance companies are prohibited from using an individual's health status to issue a policy or renew a policy. All pre-existing conditions must be covered and higher health insurance rates cannot be levied because of health or gender.

·         The eligibility standards for Medicaid will be changed to 133% of poverty for those who are not considered elderly.

·         New annual fees will be levied on all health insurance providers based on an insurance companies market share and whose total premiums exceed $25 million.

·         Small businesses that employ less than 50 people are eligible for a tax credit equal to 50% of their health insurance premiums


Health Care Reform Bill: Changes Happening in 2018


·         An excise tax will be levied on all employer provided health insurance plans costing more than $27,500 for families and $10,200 for individuals (with increased limits for those considered to be in "high risk" professions).

·         All health insurance plans must provide coverage for preventative services with no out of pocket cost


A B2B CFO can help you get through the changes.  Please call me if you should need help


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