Healthcare Reform Symposium

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Healthcare Reform Symposium

  1. 1. COMPLYING WITHHEALTHCARE REFORM Presented by JOHN D. WAHLIN BEST BEST & KRIEGER LLP
  2. 2. HEALTHCARE REFORM – IS IT LEGAL?  2 FEDERAL COURTS HAVE RULED IT IS VALID, 2 THAT IT IS INVALID  RECENT FLORIDA CASE INVALIDATES THE ENTIRE LAW  LAW IS NOT A VALID EXERCISE OF THE POWER TO REGULATE INTERSTATE COMMERCE IN MANDATING MANDATORY HEALTH COVERAGE IN 2014  MANDATE IS CENTRAL TO NEW LAW AND THEREFORE ENTIRE LAW IS INVALID
  3. 3.  LAW IS STILL ENFORCEABLE IN CALIFORNIA AND STATES OUTSIDE OF THE COURT’S JURISDICTION APPEALS COURT CAN “STAY” THE DECISION PENDING APPEAL OBAMA ADMINISTRATION PLEDGES TO CONTINUE ENFORCEMENT REVIEW OF LAW IS HEADED TO U.S. SUPREME COURT
  4. 4. NEW REQUIREMENTS FOR HEALTH PLANSEFFECTIVE IN 2011  ADULT CHILDREN MUST BE ELIGIBLE FOR COVERAGE TO AGE 26 WHETHER OR NOT DEPENDENT  COVERAGE CAN CONTINUE TO END OF YEAR IN WHICH CHILD ATTAINS AGE 26 (BUT NOT TO YEAR IN WHICH HE OR SHE ATTAINS AGE 27)  CALIFORNIA HAS NOT CONFORMED TO PRE-TAX TREATMENT FOR NON-DEPENDENTS  PREMIUMS ARE TAXABLE  EDD POSITION – VALUE OF COVERAGE IS THE INCREMENTAL INCREASE OVER COVERAGE WITHOUT ADULT CHILD
  5. 5.  NO PRE-EXISTING CONDITION EXCLUSION FOR CHILDREN UNDER 19; APPLIES TO EVERYONE IN 2014 COVERAGE CANNOT BE RESCINDED EXCEPT FOR FRAUD NO ANNUAL OR LIFETIME BENEFIT MAXIMUMS NO COST-SHARING FOR IN-NETWORK PREVENTIVE SERVICES (IMMUNIZATIONS, INFANT PREVENTIVE CARE AND SCREENINGS)
  6. 6.  NON-PRESCRIBED OVER THE COUNTER DRUGS ARE NOT REIMBURSABLE UNDER FLEXIBLE SPENDING ACCOUNTS OR HRAS (IN 2013 FSA WILL BE SUBJECT TO $2500 MAX) RIGHT TO CHOOSE IN NETWORK PCP, INCLUDING PEDIATRICIAN OR OB/GYN WITHOUT PRIOR AUTHORIZATION
  7. 7.  10% TANNING SALON TAX EXCISE TAX CAN BE IMPOSED OF $100 FOR EACH DAY OF NONCOMPLIANCE WITH MINIMUM TAX OF $2500. MAXIMUM IN 1 YEAR IS LESSER OF 10% OF HEALTH PLAN COST TO EMPLOYER OR $500,000
  8. 8.  PATIENT PROTECTION RIGHTS (RIGHT TO “IN NETWORK” PCP/PEDIATRICIAN, OB/GYN LIFETIME LIMITS – NOTICE MUST ALSO STATE THAT INDIVIDUAL WHOSE COVERAGE ENDED BECAUSE OF THE LIMIT MAY RE-ENROLL
  9. 9. SMALL BUSINESS TAX CREDITS  ELIGIBILITY – GENERALLY LESS THAN 25 FULL- TIME EMPLOYEES WITH AVERAGE COMPENSATION OF LESS THAN $50,000  EMPLOYER MUST PAY AT LEAST 50% OF PREMIUM
  10. 10. CREDIT APPLIES TO INCOME TAX UP TO 35% OF EMPLOYER’S PREMIUM REDUCED PRORATA IF MORE THAN 10 FULL- TIME EMPLOYEES AND AVERAGE COMP OF $25,000 MAXIMUM CREDIT CALCULATED BASED ON AVERAGE PREMIUM FOR SMALL GROUP MARKET IN CALIFORNIA 501(c)(3) ORGANIZATIONS CAN RECEIVE CREDIT AGAINST PAYROLL TAXES UP TO 25% OF PREMIUM
  11. 11. DISCRIMINATION RULES  LAW EXTENDS CODE DISCRIMINATION RULES FOR SELF-INSURED PLANS TO INSURED GROUP PLANS  ELIGIBILITY  NON-DISCRIMINATORY CLASSIFICATION REQUIRED OR  COVER 70% OF ALL EMPLOYEES
  12. 12.  BENEFITS  BENEFITS PROVIDED TO HIGHLY- COMPENSATED EMPLOYEES CANNOT EXCEED BENEFITS FOR ALL PARTICIPANTS  HIGHLY COMPENSATED INDIVIDUALS ARE 5 HIGHEST PAID OFFICERS, 10% OWNERS OR HIGHEST PAID 25% OF EMPLOYEES
  13. 13.  PENALTY OF $100 PER DAY PER INDIVIDUAL DISCRIMINATED AGAINST ENFORCEMENT HAS BEEN SUSPENDED PENDING REGULATIONS AND COMMENTS FROM TAXPAYERS

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