Dear Valued Client,
As you know, the new health care reform law, officially called the Patient Protection and Affordable Care Act (PPACA), has significant implications for companies like yours who offer health care coverage to employees and their dependents. Rules for how the law will be implemented are still being written, and further details will be issued in the coming months. For now, we would like to take a moment to briefly summarize some of the changes occurring in 2010.
Small Business Tax Credits
Small businesses who offer health coverage and have average wages of less than $50,000 per employee per year may be eligible for a tax credit to help with the cost of coverage. The credit is worth up to 35% of a business’ premium costs in 2010. Please visit the IRS website (www.irs.gov) for more information.
Overage Dependent Coverage Extension
Beginning on September 23, 2010, plans that offer coverage to dependent children must allow children to remain on their parents’ policies until they turn 26, even if they are married or are not full-time students. Many insurance companies have agreed to extend dependent coverage immediately.
New Benefits & Consumer Protections
New benefits and consumer protections will be required on all health plans beginning as early as September 23, 2010 (the effective date will vary depending on a plan’s renewal date), and will include the following:
-Lifetime limits prohibited: Insurance companies will no longer be able to place lifetime limits on the dollar value of coverage they provide.
-Annual limits regulated: Insurance plans’ use of annual limits will be tightly regulated to ensure access to needed care.
-Policy rescissions prohibited: Insurance companies will be prohibited from rescinding coverage except in cases of fraud.
-Pre-existing condition exclusion prohibited: Insurance companies will not be able to exclude children from coverage because of a pre-existing condition.
-Appeals process for new plans: Ensures consumers in new plans have access to an appeals process to appeal decisions, such as the denial of a medical claim.
-Enhanced coverage for preventive services: Benefits for prevention will be covered at 100% with no deductible. This applies to most but not all plans, and the exact benefits that must be covered will be announced soon. For “grandfathered” plans, the new preventive benefit provisions may not apply until a later date.
Medicare Part D Rebate
Medicare beneficiaries who hit the “donut hole” (gap in Medicare Part D drug coverage) this year will automatically be mailed a one-time $250 rebate check. The new law continues to provide additional discounts for seniors on Medicare in the coming years and should completely close the donut hole by 2020.
Temporary Program for Early Retirees
A temporary reinsurance program will provide coverage for retirees who are over age 55 but not eligible for Medicare and have health coverage through their former employers. The program will help stabilize early retiree coverage and help ensure that companies continue to provide health coverage to their early retirees.
Temporary High Risk Pool
Certain uninsured individuals with pre-existing conditions may be able to purchase coverage through a temporary national high-risk pool. This program is a bridge to 2014 when the establishment of new health insurance exchanges will provide people with access to affordable coverage options, and insurance companies will be prohibited from denying coverage to individuals with pre-existing conditions.
For further information, please visit www.healthreform.gov.
Thank you.