Forest Financial Group provides a legislative update on the timeline for implementation of the Patient Protection and Affordable Care Act. Key provisions beginning in 2010 include a temporary reinsurance program for early retirees, establishing high-risk pools, and requiring dependent coverage until age 26. Starting in 2014, major reforms take effect such as prohibiting pre-existing condition exclusions, establishing health insurance exchanges, and expanding Medicaid eligibility. An excise tax on high-cost health plans begins in 2018.

1. Forest Financial Group
Legislative Update
April 1, 2010 Legislative Update
Forest Financial Group is pleased to offer updates focusing on
legislation changes and decisions that impact our clients. It is
>>Company Logo<< important to us that our clients are kept abreast of changes in
both Washington and Springfield that apply to employee
benefits.
FFG aims to provide you with a better understanding of our
healthcare system, our federal and statutory laws, and our
industry regulations. We hope you find this information
valuable to the administration of your benefits program.
The Patient Protection and Affordable Care Act - Timeline
As the health reform legislation stands today, the issues affecting individuals and employers are
outlined below in order of implementation deadline.
90 Days After Enactment
Temporary Retiree Reinsurance Program
A federal reinsurance program will be available for employers providing insurance for retirees over age
50 years of age, who are not eligible for Medicare.
National High-Risk Pool
A federally subsidized high-risk pool will be established for individuals with preexisting conditions who
have been uninsured for at least six months.
Six Months After Enactment
Legislative Update
Dependent Coverage
Plans would be required to provide coverage for adult children up to age 26, if the adult child is not
eligible to enroll in an employer-sponsored plan.
No Rescissions
Grandfathered plans would be prohibited from rescinding coverage except in the case of fraud.
Keeping You Informed
No Discrimination Based on Salary
Prohibits new group health plans from establishing any eligibility rules for health care coverage that
have the effect of discriminating in favor of higher wage employees.
No Lifetime/Restrictive Annual Limits
Existing plans are prohibited from having lifetime limits on coverage or restrictive annual limits (as
determined by the Health and Human Services Secretary).
Pre-Existing Conditions
There can be no pre-existing limitation for coverage of children under age 19, however insurers could
still reject those children outright for coverage in the individual market until 2014.
Year 2010
Small Employer Tax Credit
Businesses with fewer than 25 employees and average wages of less than $50,000 are eligible for a tax
credit of up to 35 percent of the employer’s contribution toward the employee’s health insurance
premium. (Effective 2010-2013).
Reporting on Medical Loss Ratio
Effective in 2010, health insurance plans are required to report the proportion of premium dollars spent
on clinical services, quality, and other costs.
Year 2011
Benefit value required on W-2
A health plan W-2 reporting requirement will be imposed, requiring employers to report the aggregate
value of medical benefits, vision, dental and supplemental insurance coverage.
Over the Counter Drug purchases
Over-the-counter medicines will no longer be eligible for purchase with funds from Flexible Spending
Accounts, Health Savings Accounts or Health Reimbursement Arrangements, unless a prescription is
provided.
Forest Financial Group
Legislative Update April 1, 2010

2. Year 2013
Increase Tax for High-Income Taxpayers
Families with annual gross income higher than $250,000 will have to pay an additional 3.8% tax on all
investment income and contribute higher amounts to Medicare through payroll taxes.
Flexible Spending Arrangements (FSAs)
A statutory cap of $2,500 will be placed on the amount of funds an employee can save in a Flexible
Spending Account. The limit will be adjusted annually in accordance with the U.S. Consumer Price
Index.
Year 2014
Insurance Reforms
Pre-existing condition exclusions are prohibited (for children, the exclusions are prohibited starting six
months after enactment) and annual limits on coverage (which were restricted beginning six months
after enactment).
Employer Mandate (Fewer than 50 Employees)
Effective in 2014, employers with more than 50 employees that do not offer coverage and have at least
one fulltime employee who receives a premium tax credit will be fined an amount equal to $2,000 per
full-time employee, excluding the first 30 employees from the assessment.
Employer Mandate (More than 50 Employees)
Employers with more than 50 employees that do offer coverage but have at least one full-time
employee receiving a premium tax credit because coverage is “unaffordable,” will pay the lesser of
Legislative Update
$3,000 for each employee receiving a premium credit or $750 for each fulltime employee.
Auto-Enrollment
Employers with more than 200 employees must automatically enroll employees in coverage offered by
the employer. Employees may opt out of coverage.
Small Business Tax Credit
Keeping You Informed
Small employers with no more than 25 employees and average annual wages of less than $40,000 that
purchase health insurance for employees are provided with a tax credit.
Benefit Design
Effective in 2014, an essential health benefits package is established that provides a comprehensive set
of services, covers at least 60 percent of the actuarial value of the covered benefits, limits annual cost-
sharing to the current law HSA limits ($5,950/individual and $11,900/family in 2010), and is not more
extensive than the typical employer plan.
Expanded Medicaid Eligibility
States will have the option starting in 2014 to expand Medicaid eligibility to nonelderly, non-pregnant
individuals who are not otherwise eligible for Medicare, with incomes up to 133 percent of the federal
poverty level (FPL).
Health Insurance Exchanges
Effective in 2014, state-based Health Insurance Exchanges and Small Business Health Options Program
(SHOP) Exchanges must be established, through which individuals and small businesses with up to 100
employees can purchase qualified coverage. States are permitted to allow businesses with more than
100 employees to purchase coverage in the SHOP Exchange beginning in 2017.
Year 2018
Tax on Cadillac Plans
Effective in 2018, an excise tax is imposed on insurers of employer-sponsored health plans with
aggregate values that exceed $10,200 for individual coverage and $27,500 for family coverage. The tax
is equal to 40 percent of the value of the plan that exceeds the threshold amounts.
Source: Energy and Commerce Committee & The Kaiser Family Foundation
Forest Financial Group
Legislative Update April 1, 2010