Your SlideShare is downloading. ×
  • Like
The Affordable Health Care Act
Upcoming SlideShare
Loading in...5

Thanks for flagging this SlideShare!

Oops! An error has occurred.


Now you can save presentations on your phone or tablet

Available for both IPhone and Android

Text the download link to your phone

Standard text messaging rates apply

The Affordable Health Care Act


A summary of the Affordable Health Care Act with a focus on those provisions that are effective in the next two years.

A summary of the Affordable Health Care Act with a focus on those provisions that are effective in the next two years.

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads


Total Views
On SlideShare
From Embeds
Number of Embeds



Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

    No notes for slide
  • Retiree re-insurance program provides $5 billion to reinsure plan sponsors (employers or employee organizations) that offer health insurance coverage for early retirees for claims that exceed $15,000 and are less than $90,000 per retiree (to be adjusted annually for inflation) – this caps out at $5 billion – first come first serve pay basis


  • 1. David Whaley, Esq. Dinsmore & Shohl LLP Cincinnati 513.977.8554 [email_address] Health Care Reform Key Provisions for Employers to Think About Now
  • 2. Two Bills
    • Patient Protection and Affordable Care Act (Senate Bill)
    • Health Care and Education Affordability Reconciliation Act of 2010 (Reconciliation Bill)
    • Complicating factors
      • No significant legislative history
      • Much enforcement/rulemaking delegated to HHS
      • Uncertainty: delayed effective dates and potential future changes
  • 3. Key Concepts
    • Individual Provisions
    • Employer Provisions
    • Health Insurance Market
  • 4. Key Effective Dates
    • Now
    • Plan Years beginning after 6 months from enactment (9/23/2010 – this is January 1, 2010 for calendar year plan years)
    • 1/1/2011
    • 24 months after enactment
    • 2013*
    • 2014*
    • Later*
    • *Various dates and questions exist whether these effective dates, and requirements will be modified by subsequent legislation
  • 5. Is your Plan “Grandfathered”?
    • Grandfathered plans are exempt from certain requirements
    • Was any individual enrolled on March 23, 2010?
    • Grandfather treatment lasts indefinitely
    • May enroll new participants
    • Are plan changes permissible?
  • 6. Effective Now
    • Small Business Tax Credits
    • Retiree Reinsurance
    • Automatic enrollment
  • 7. Small Business Tax Credit
    • Available in 2010 – 2013 taxable years
      • After 2013 only available if insurance is purchased through exchange
    • Available to an “eligible small employer”
      • No more than 25 FTEs employed during the tax year
        • Phase out if FTEs >10
      • Average wages of < $50,000
        • Phase out if exceed $25,000
      • Pays premiums under a “qualifying arrangement”
        • Maximum credit is generally 35% of employer expenses
      • IRS Webpage:,,id=220809,00.html?portlet=6
  • 8. Retiree Reinsurance
    • HHS to establish by 6/21/2010
    • Reimburses employers for early retiree health coverage
      • Age 55 or older
      • Not eligible for Medicare
      • Includes dependents
    • Must implement HHS cost savings measures
    • Limited to $5 billion
  • 9. Automatic Enrollment (grandfathered plans exempted)
    • Applies to employers with >200 employees
    • All full time employees must be automatically enrolled in coverage
    • Will be provided ability to opt out
    • Appears to be effective now (no effective date in bill)
    • Questions:
      • Determining full time status
      • Time period for opt out
      • Return of employee contributions
      • Changes to cafeteria plan rules
  • 10. 6 Months after Enactment (all plans)
    • Plan Years after September 23, 2010
      • Extension of coverage to adult children
      • Elimination of preexisting condition exclusions for under age 19
      • Emergency care requirements
      • Restriction on coverage rescissions
      • No annual or lifetime limits
  • 11. Coverage of Children and Dependents
    • If plan covers dependent children, then coverage must be provided for adult children to age 26
      • Applies to married children
      • For grandfathered plans, through 2013, requirement ends if individual is eligible for employer coverage
      • Not required to provide coverage to spouse or dependents of child
      • Did not change IRC Sec. 152 dependent definition
      • Applies to married children, but not to spouses or dependents of children
  • 12. Coverage of Children and Dependents
    • Effect of change
      • Elimination of student status requirement?
        • Would avoid compliance with Michelle’s law
      • May plan charge additional premium?
        • Interim Final Regulations – clarify that you may not charge more for this coverage
      • Effect on COBRA - q ualifying event includes “child ceasing to be a dependent child”
        • The Interim Final Regulations seem to indicate that ceasing to be an eligible employee after age 26 is a qualifying event entitling the child to COBRA of 36 months
  • 13. Coverage of Children and Dependents
    • IRS Notice 2010-38 issued on 4/27/2010
      • Provided guidance on tax treatment of adult children
      • Tax rules effective 3/30/2010
      • Note: applies to children under age 27 (e.g can cover until last day of year when child turns 26)
        • “ child” includes son, daughter, stepson or stepdaughter
          • Also includes child legally adopted or placed for adoption
          • Includes “eligible foster child”
  • 14. Coverage of Children and Dependents
    • IRS Notice 2010-38
      • 105(b) exclusion from income applies to coverage of adult children
        • Includes children who are not dependents
        • Age limit, residency and support tests of §152 don’t apply
        • Also applies to FICA and FUTA
        • Exclusion ends on 1 st day of the year the child turns 27
  • 15. Coverage of Children and Dependents
    • IRS Notice 2010-38
      • Cafeteria plan may allow employees to make election change
        • Plans may permit effective 3/30/2010
        • May adopt retroactive amendment by 12/31/2010
  • 16. Coverage of Emergency Services (all plans)
    • Emergency
      • May apply deductible/co-payments
      • No pre-authorization requirement
      • No out-of-network charges
  • 17. Restriction on Annual and Lifetime Limits (all plans)
    • Lifetime limits
      • What if former participant has already met limit?
    • Annual limit
      • Applies only to “essential” benefits
      • May impose “restricted” limits
        • “ Restricted Annual Limits” permitted until 12/31/2013
    • Uncertainties
      • Definition of “essential” and “restricted”
      • Ability to apply limits to specific benefits
        • Out of network changes
        • Certain types of treatment (e.g., physical therapy)
  • 18. 6 Months after Enactment (non-grandfathered plans)
    • Insured plans subject to 105(h) discrimination requirements
    • Preventive care covered with no cost sharing
    • Designation of OB/GYN or pediatrician as primary care provider
    • Enhanced appeals procedure
  • 19. Section 105(h) Nondiscrimination Rules (grandfather plans exempt)
    • Discriminatory plan
      • Plan may not discriminate in favor of highly compensated individuals as to
        • Eligibility to participate, or
        • Benefits provided
    • Formerly applied only to self-insured plans
  • 20. Coverage of Preventive Services (grandfather plans exempt)
    • Preventive
      • Does not apply to grandfathered plans
      • First dollar coverage required for
        • Evidence based preventive care
        • Immunizations
  • 21. Appeals Requirements (grandfather plans exempt)
    • Plans must establish an internal claims appeals process that
      • provides notice in a culturally and linguistically appropriate manner
      • allows claimants to
        • review their file,
        • present evidence and testimony as part of the appeals process, and
        • receive continued coverage pending the outcome of the appeals process; and
      • provides an external review process
  • 22. January 1, 2011
    • Elimination of over the counter medicines from HSA, FSA and HRAs
    • Employers must report cost of health coverage on W-2
    • Provide information about CLASS program
  • 23. No Reimbursement for Over-the-Counter Drugs
    • Effective 1/1/2011 (regardless of plan year)
      • Reimbursement from FSA or HRA permitted for expenses incurred before 1/1/2011
      • HSA distribution must occur before 1/1/2011
    • Applies to FSAs, HSAs and HRAs
    • Will require amendment to plan and SPD
  • 24. W-2 Reporting
    • Employer must report total cost of health plan on 2011 Form W-2
    • Cost calculated under rules similar to COBRA costs
    • Not clear how to determine value of
      • On-site medical clinics
      • Screenings
  • 25. CLASS Program
    • New government long term care insurance program
    • Payments begin 2011
    • Employers expected to automatically enroll employees
      • Opt out available
    • Benefits available after 5 years of participation
  • 26. 24 Months after Enactment
    • 60 day advance notice of changes to benefits
    • Summary of benefits provided to all participants
    • Reporting on quality of care and wellness initiatives
    • Insurer fee for comparative effectiveness research (9/30/12)
  • 27. 2013
    • FSA Contributions limited to $2500
    • Employers must provide notice about health insurance exchange and availability of credits
  • 28. 2014
    • Plan Design Changes
    • Individual Mandates
    • Individual Subsidies
    • Employer Penalties
    • Health Insurance Exchanges
    • Small Group Subsidies
    • Insurance Market Reforms
    • Insurance Company Fee
  • 29. Later
    • Increases in individual penalty (2014 – 2018)
    • Large employers added to exchange (2017)
    • Tax on “Cadillac” plans (2018)
  • 30. Labor Considerations: Reasonable Break Time for Nursing Mothers
    • Amends the Fair Labor Standards Act
    • Requires employers to provide nursing mothers, up to one year after the birth of the child, a reasonable break time each time the mother needs to express milk
    • Area needs to be shielded from view with no intrusion by the public
    • Does not preempt state law
  • 31. Labor Considerations: Non-Discrimination Provisions
    • PPACA also amends the Fair Labor Standards Act to:
      • prohibit discharging or discriminating against an employee because the employee received a federal tax credit or cost-sharing subsidy to purchase health insurance; or
      • because he or she brings a complaint or testifies, etc. about a reasonable belief regarding a violation of PPACA
  • 32. David A. Whaley, Esq. 513.977.8554 | [email_address]