How the Healthcare Bill Will Affect You
By Andrew Keenan, VP of Sales and Marketing, Ascentis
We all know there has been a ton of posturing on both sides of the aisle over the new health care bill. But, how will it affect you personally? Below is an outline of the proposed changes in healthcare and a timeline of the proposed changes.
On March 21st, by a vote of 219-212, House Democrats voted through the Senate-passed bill (HR 3590) and also approved a budget reconciliation package (HR 4872) modifying the bill. Neither bill received a Republican yes vote. HR 3590 was signed into law on March 23rd by President Obama. Upon passage of HR 4872 by the Senate, and signature by the President, health care reform provisions will be finalized. If HR 4872 is amended in the Senate, then it will need to be sent back to the House to be voted on once again.
Timeline of certain provisions
90 days after enactment:
- Provides immediate access to high-risk pools for people who have no insurance because of preexisting conditions.
Six months after enactment:
- Bars insurers from denying or rescinding coverage due to sickness.
- Bars insurers from denying coverage to children who have preexisting conditions.
- Bars insurers from imposing lifetime caps on coverage.
- Requires insurers to allow young people to stay on their parents’ policies until age 26.
Within a year:
- Provides a $250 rebate to Medicare prescription drug plan beneficiaries whose initial benefits run out.
- Subsidies begin to aid small employers in providing health coverage to employees.
- Requires individual and small group market insurance plans to spend 80 percent of premium dollars on medical services. Large group plans would have to spend at least 85 percent.
- Increases the Medicare payroll tax by 0.9% and expands it to 3.8% on dividend, interest and other unearned income for singles earning more than $200,000 and joint filers making more than $250,000.
- State-based exchanges to be up & running.
- Provides subsidies for families earning up to 400 percent of the poverty level — or, under current guidelines, about $88,000 a year for a family of four — to purchase health insurance.
- Requires most employers to provide coverage or face penalties. Companies with more than 200 workers will be required to automatically enroll their employees in whatever insurance plan they offer. Companies with at least 50 workers are subject to fines if their workers end up receiving government subsidized coverage. The bill also contains tax breaks for small firms that provide employees with health insurance.
- Requires most people to obtain coverage or face penalties. People who elect not to get insurance will have to pay a penalty of $695 per year or 2.5% of income (phased in before 2016).
- Imposes a 40 percent excise tax on high-end insurance ($27,500 for family coverage).
Major Provisions of the Bill
- Coverage to an estimated 32 million uninsured Americans
- Expanding eligibility for Medicaid
- Increases Medicaid provider payment by 20%
- Implementation of an individual mandate requiring all citizens to purchase insurance
- Reducing and eliminating the Part D donut hole
- Reducing Medicare provider funding for both Medicare Advantage plans and provider payments
- Tax-free treatment of Medicare Part D drug subsidy will be eliminated
- Introduction of State based “Exchanges” that will allow individuals and small businesses to purchase insurance
- Employer “shared responsibility” requirement to provide affordable coverage to full-time employees
- Elimination of pre-existing condition exclusions
- Increasing dependent eligibility to age 26
- Federal subsidies to help low-income individuals afford coverage
- Small business tax credits
Provisions that will affect Employers
- Elimination of lifetime maximums
- Elimination of cost-sharing for preventive care
- Provide coverage for full-time employees or pay a penalty
- Pay an excise tax on high cost coverage exceeding $10,200 for singles and $27,500 for families.
- Maximum 90 day waiting period
- Increasing wellness incentives to 30% of premium
- W-2 reporting of health coverage beginning in 2011
- Access to a reinsurance pool for early retiree programs
- Insured plans can no longer discriminate in favor of highly-paid employees under insured plans
- Coverage of dependents to age 26
- Auto-enrollment of new hires for employers with 200 or more full-time equivalent employees
- $2,500 cap on FSA contributions
- Shared responsibility provision for both full and part-time employees
- Cost impact if employees receive income-based assistance for health insurance exchange coverage
- Free choice voucher for certain low income employees whose employers charge more than 8-9.8% of family income
- Introduces a new HHS role in overseeing health plan rates
- Expands fraud and abuse programs for Medicare and Medicaid
- CLASS Act program is created which is a voluntary, payroll deduction funded long-term care program
- Industry fees on insurers, pharmaceutical companies and manufacturers
- High risk tax on tanning salons
- Increased Medicare taxes for high earners by .9%
- New taxes on dividend, interest, rental, royalty, capital gains for individuals with incomes over $200,000
- Reducing Federal payments allocated to Medicare Advantage plans and Medicare provider payments
- Penalties on employers who do not offer affordable coverage
- Penalties for individuals who do not elect coverage
- Excise tax on “high cost” coverage
- Elimination of tax-free treatment of Medicare Part D drug subsidy
This information was generously provided by AH&T Insurance, Seattle, Washington.