Summary Health Care Reform

Summary Health Care Reform

Part IV.

Health insurance plan changes that impact individuals and employers (both fully insured and self-funded plans unless otherwise noted) over the next few years:

High-Level Overview Health Reform Law: Key Provisions for Large Employers

Overview

The health reform package is made up of two parts: a bill that passed the Senate on Christmas Eve, passed the House on March 21, and was signed into law by the President on March 23, and a second piece of legislation: the House’s reconciliation bill, which makes changes to the original

law, passed both chambers on March 25, and was signed by the President on March 30. Many of the provisions in the law will not take effect for several years. At the earliest, provisions that affect employer-sponsored health plans will take effect six months from the date of enactment – in late September. Even then, those early provisions will not affect plans until they renew for the next plan year.

The health reform law has thousands of pages and hundreds of provisions. So it’s important to remember that before many of those provisions are put in place, additional laws and regulations will need to be developed. That could be a lengthy process. Here are some highlights of the major provisions.

Individual responsibility

Starting in 2014, everyone must have health insurance coverage or pay a penalty, which will be enforced by the Internal Revenue Service. The penalties will be phased in over time:

• In 2014, an individual without a health insurance plan must pay whichever amount is greater: $95 or 1 percent of income.
• For 2016 and beyond, that penalty rises to $695 or 2.5 percent of income, whichever is greater (the $695 is indexed from 2016 on).
• Families will pay half the penalty for children, with a cap of $2,085 per family.
• There will be exemptions to this requirement, such as in cases of fi nancial hardship and other limited circumstances. Subsidies to buy private health insurance in new state exchanges will be available in the form of tax credits and cost-sharing assistance for people above Medicaid eligibility but below 400 percent of the federal poverty level. Medicaid eligibility will be increased to 133 percent of the federal poverty level.

Changes that affect your business and the employees who depend on you.

Employer responsibility

New employer group health insurance penalties and obligations

Starting in 2014, employers don’t have to offer their employees health insurance coverage, but most of them with more than 50 employees will pay an assessment if they don’t, or if they offer health insurance coverage that isn’t affordable. Full-time and part-time employees are included when determining whether an employer has 50 employees (based on current full-time employee equivalency rules).

• Employers with 50 or more employees that do not offer “minimum essential health insurance coverage” will pay $2,000 for each employee over the fi rst 30 employees if one of their employees gets a tax subsidy to buy health insurance under an exchange.
• Employers with 50 or more employees that do offer minimum essential health insurance coverage but have at least one full-time employee receiving subsidized coverage under an exchange will pay whichever is less: $3,000 for each employee receiving a premium credit or $2,000 for each full-time employee. Employers must provide “free choice” vouchers to employees with incomes below 400 percent of the federal poverty level if the employee’s contribution to health insurance coverage is between 8 percent and 9.8 percent of income and the employee chooses to purchase coverage in the exchange. No penalties will be imposed on employers with respect to employees who receive these vouchers. Employers with more than 200 employees that offer health insurance coverage must automatically enroll new full-time employees in health insurance coverage. Employees may opt out.

Not to be used for implementation purposes

IMPORTANT: This document is designed to provide a general overview of the new health reform law. It does NOT attempt to cover all of the law’s provisions and should NOT be used as the legal advice for implementation activities. We encourage you to seek any professional advice, including legal counsel, regarding how the new requirements will affect your specific plan.

This summary provided by Humana One Health Insurance and Humana Small Business Health Insurance.