Health Care Reform

The federal health care reform legislation, known as the Patient Protection and Affordable Care Act, signed by the President on March 23, 2010, and the Health Care and Education Reconciliation Act approved by Congress, signed by the President on March 31, 2010, will expand the availability of health care coverage to millions of Americans. While some of the measures will be implemented this year, many do not take effect until 2014 and some extend out to 2020.

Below is a high-level overview of the timeline and at the bottom of the page you will find resources to assist with compliance and education. Each reform within the table includes:

  • a brief summary;
  • the year in which the reform goes into effect;
  • reference to whom the reform impacts; and
  • links to resources (if available).
Please Note: The details and resources provided on this page are for informational purposes only and are not intended to constitute legal advice. They have been compiled to share with those that you feel will benefit from information pertaining to the Patient Protection and Affordable Care Act. Please consult your legal and/or tax advisors in connection with any fact-specific situation under federal, state or local laws that may impose additional obligations.
HEALTHCARE REFORM RESOURCES
SIGNED LEGISLATION
FAQs
TOPIC SPECIFIC DETAILS
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Carrier Grandmothering

Pediatric Dental Benefits Comparison

Summary of Benefits & Coverage Comparison
Model Notices
Grandfathered Health Plans
Non-Discrimination-PENDING FINAL RULES
General HCR Timeline
ACA's Tax Provisions
Generic Employee Announcement re PPACA
HOW REFORM IMPACTS:

Families

Young Adults

Children

Seniors

Rural Americans

African Americans

Early Retirees

Latinos

Women

Small Business
MODEL NOTICES
Use the links below to view required employer model notices.
OTHER REFORM RESOURCES
 
COVERED CALIFORNIA
 
 
  Impact on Impact on Year
Reform Business/ER Individual/EE Effective
TEMPORARY PROGRAM FOR EARLY RETIREES (eff 6/23/10) Bus/ER Indiv/EE 2010
Within 90 days of enactment up to January 1, 2014, a temporary reinsurance program will provide coverage for retirees who are over age 55 but not eligible for Medicare. The reinsurance program will reimburse employer plans 80% of retirees' claims that are between $15,000 and $90,000.
  Participating States Fact Sheet Interim Final Rule Regs & Guidance    
TEMPORARY HIGH RISK POOL (eff 6/23/10)   Indiv/EE 2010
Certain individuals, without employer coverage, may be able to purchase coverage through a temporary national high-risk pool. The temporary high-risk pool will offer coverage to U.S. citizens and legal immigrants who have not been insured for at least six (6) months, at reduced premiums.
  Fact Sheet Who's Eligible in CA        
SMALL BUSINESS TAX CREDIT (PHASE 1) Bus/ER   2010
Small employers with no more that 25 employees and average annual wages less than $50,000 that purchase health insurance (medical, dental and vision) for employees are eligible to receive a tax credit. For tax years 2010-2013, tax credit of up to 35% of employers contribution toward the employee's health insurance premium if the employer contributes at least 50% of the total premium cost or 50% of a benchmark premium. Employers with 10 or fewer employees with average annual wages of less than $25,000 may be able to receive full tax credit. Use resources for additional guidelines and details. Also see "HEALTHCARE TAX CREDIT PHASE 2" in year 2014.
IRS Guidelines Determining Eligibility FAQs Benchmark Premiums Tax Credit Calculator
  12/2/10 Guidance IRS Form 8941 Form 8941 Instructions      
OVERAGE DEPENDENT COVERAGE EXTENSION (eff 9/23/10) Bus/ER Indiv/EE 2010
Prior to 2014, coverage must be offered to dependent children (including married children) who have not reached age 26 and if they are not "eligible" for other employer group coverage. Also see "OVERAGE DEPENDENT COVERAGE EXTENSION" for year 2014.
IRS Notice Fact Sheet IRS Tax Treatment FAQs (EBSA) FAQs (KFF) Model Notice
  Interim Final Regs          
LIFETIME LIMITS PROHIBITED (eff 9/23/10)
Bus/ER Indiv/EE 2010
Individual and group health plans are prohibited from placing lifetime limits on the dollar value of coverage.
  Interim Final Regs Model Notice        
ANNUAL LIMITS REGULATED (eff 9/23/10) Bus/ER Indiv/EE 2010
Restricts the use of annual limits by all employer plans and new plans in the individual market, to ensure access to needed care. Restrictions to be defined by HHS. Also see "ANNUAL LIMITS PROHIBITED" in year 2014.
  Interim Final Regs          
POLICY RESCISSIONS PROHIBITED (eff 9/23/10)   Indiv/EE 2010
Individual and group health plan insurers are prohibited from rescinding coverage except in cases of fraud.
  Interim Final Regs          
PRE-EXISTING CONDITION EXCLUSION PROHIBITED (eff 9/23/10)   Indiv/EE 2010
Individual and group health plan insurers are prohibited from applying pre-existing condition exclusions to children for new and existing plans. Also see "PRE-EXISTING CONDITION EXCLUSION PROHIBITED" in year 2014.
  Interim Final Regs          
PREVENTIVE CARE COVERAGE UNDER PRIVATE PLANS (eff 9/23/10) Bus/ER Indiv/EE 2010
Requires qualified health plans to cover preventive services with no copayments and being exempt from deductibles. HHS will define preventive services.
  Interim Final Regs HHS Press Release Preventive Regulations More Info  
NON-DISCRIMINATION RULES (eff TBD - delayed on 12/23/10) Bus/ER   pending final rules
Originally scheduled for 2010 but implementation delayed until further guidance has been issued.  Prohibits group health plan sponsors, except self-insured plans, from establishing health care coverage eligibility rules that discriminate in favor of higher wage employees.
  Compliance Delayed          
MEDICARE PART D REBATE (eff 9/23/10)   Indiv/EE 2010
A $250 rebate will be provided to Medicare beneficiaries who enter the coverage gap, i.e. "donut hole" in 2010.
  General Info Rebate Mailing        
HEALTH INSURANCE CONSUMER INFORMATION (9/23/10)   Indiv/EE 2010
Provides aide to states in establishing offices of health insurance consumer assistance in order to help individuals with the filing of complaints and appeals.
PATIENT PROTECTIONS (eff 9/23/10)   Indiv/EE 2010
Participants must be given the right to choose a primary care provider or a pediatrician when a plan requires designation of a primary care physician. Participants must also be given the right to obtain obstetrical or gynecological care without prior authorization.
  Interim Final Regs Model Notice        
MEDICAL LOSS RATIO (MLR) REQUIREMENTS (eff 1/1/11)   Indiv/EE 2011
Health insurers and plans must annually report percentage of premiums (MLR) spent on healthcare. The individual and small group market must maintain an MLR of 80% and large group must maintain an MLR of 85%. Enrollees will receive rebates for the amount of the premium spent on health care services that is less than the required MLR.
  HHS Press Release Regulations Impact Analysis Fact Sheet    
HSA DISTRIBUTION TAX PENALTY INCREASE (eff 1/1/11)   Indiv/EE 2011
Distributions from an HSA, or Archer MSA, not used for qualified medical expenses will incur a 20% tax or 15% (both up from 10%) respectively.
OVER-THE-COUNTER DRUG TAX BENEFIT ELIMINATED (eff 1/1/11) Bus/ER Indiv/EE 2011
Costs for over-the-counter drugs, not prescribed by a physician, may not be reimbursed through HSAs, Archer MSAs, health FSAs, or HRAs on a tax-free basis.
  FAQs          
SIMPLE CAFETERIA PLAN (eff1/1/11) Bus/ER   2011
The Act defines a simple cafeteria plan as a plan “which is established and maintained by an eligible employer,” and for which certain contribution, eligibility and participation requirements are met. In general, an eligible employer is an employer that employed an average of 100 or fewer employees for either of the prior two years. Plans that qualify as a simple cafeteria plan for any given year are treated as meeting any applicable nondiscrimination requirements for that year (i.e., non-discrimination testing is not required for these plans).
  General Info          
PREVENTIVE CARE COVERAGE UNDER MEDICARE (eff 1/1/11)   Indiv/EE 2011
Eliminates copayments for preventive services and exempts preventive services from deductibles under the Medicare Program.
MEDICARE PART D DONUT HOLE BEGINS TO CLOSE (eff 1/1/11)   Indiv/EE 2011
Beginning 2011, pharmaceutical manufacturers whose drugs are covered in Part D must provide a 50% discount for brand-name drugs. A generic drug discount in the form of a federal subsidy is also provided to eligible beneficiaries in the donut hole. The donut hole will be closed by 2020 by reducing coinsurance to 25% for all spending between the deductible and the catastrophic limit for both generic and brand name drugs.
  General Info          
COMMUNITY HEALTH CENTERS (eff 1/1/11)     2011
Increased funding for Community Health Centers to allow for nearly a doubling of the number of patients seen by the centers over the next five (5) years.
  HHS Press Release Awards by State        
PRIMARY CARE PRACTITIONER INCREASE (eff 1/1/11)     2011
New investments to increase the number of primary care practitioners, including doctors, nurses, nurse practitioners, and physician assistants.
  Press Release          
UNREASONABLE RATE HIKE ACCOUNTABILITY (eff 1/1/11)     2011
Creates grant program to support states in requiring health insurance companies to submit justification for all requested premium increases, and insurance companies with excessive or unjustified premium exchanges may not be able to participate in the new Health Insurance Exchanges.
  HHS Press Release Regulations Fact Sheet HHS Webpage Rate Reporting Website
APPEALS PROCESS FOR NEW PLANS  Indiv/EE 2011
Ensures consumers in new plans have access to an effective internal and external appeal process to appeal decisions; coverage to be maintained during appeal process. Originally effective 9/23/10. Grace period to 7/1/11 issued on 9/20/10.
  Interim Final Regs DOL Fact Sheet SHRM Guidance Issued Grace Period    
W-2 REPORTING VALUE OF HEALTH PLANS (eff 1/1/12 for 2012 Tax Year) Bus/ER   2012
Beginning in 2012 (delayed from 2011), employers issuing MORE than 250 W-2s in 2011 are required to report the 2012 aggregate cost of employer-sponsored coverage on an employee's W-2 form (their 2012 W-2 that will be issued in January 2013). Compliance for employers issuing less than 250 W-2s is indefinitely delayed.
  W-2 Reporting Guidance (SHRM) 2011 Optional Notice IRS Extension Notice 4/7/11 IFRs Draft Form W-2
NOTICE OF MATERIAL MODIFICATIONS (eff 9/23/12) Bus/ER   2012
Group health plans and issuers are required to provide notice to enrollees at least 60 days before implementation of any material change that is not reflected in the most recently provided summary of benefits.
SUMMARY OF BENEFITS AND COVERAGE (eff 9/23/12) Bus/ER   2012
Department of Health and Human Services (HHS) and the National Association of Insurance Commissioners (NAIC) to define standardized information so as to create uniform summary of benefits and coverage explanation documents (effective 3/13/12). These documents are in addition to the employer provided Summary Plan Description (SPD).
  HHS News Release Fact Sheet FAQs SBC Templates Uniform Glossary Instructions
WOMENS PREVENTIVE SERVICES EXPANSION (eff 8/1/12) Bus/ER   2012
HHS adopted additional guidelines for Women's Preventive Services in August 2011 - including well-woman visits, support for breastfeeding equipment, contraception, and domestic violence screenings - to be covered without cost sharing in all new plans starting August 2012. 
  News Release Fact Sheet Preventive Services Women and the ACA Amendment to Preventive Care Provision
FSA CONTRIBUTIONS LIMITED (eff 1/1/13) Bus/ER Indiv/EE 2013
Contributions to a Flexible Spending Account (FSA) for medical related expenses will be limited to $2,500 per year with an annual increase in the amount of the cost of living adjustment.
  IRS Notice 2012-40        
MEDICAL EXPENSE ITEMIZED TAX DEDUCTIONS (eff 1/1/13)   Indiv/EE 2013
Thresholds for claiming itemized tax deductions for medical expenses rise from 7.5% to 10.0% of adjusted gross income. This increase will be waived for those 65 or older for tax years 2013 through 2016.
MEDICARE TAX RATE INCREASE (eff 1/1/13)   Indiv/EE 2013
Increase the Medicare Part A tax on wages by 0.9% (to 2.35%) on earnings over $200,000 for individuals and $250,000 for married couples filing jointly and impose a 3.8% tax on unearned income for higher-income taxpayers.
  IRS FAQs        
ELIMINATION OF MEDICARE PT D TAX DEDUCTION (eff 1/1/13) Bus/ER   2013
Tax deduction available to Employers who receive Medicare Part D subsidy payments will be eliminated.
  Article        
NOTICE TO EMPLOYEES OF STATE HEALTH EXCHANGE (eff 10/1/13) Bus/ER   2013
Employers must provide written notice to all existing employees and new hires about the existence of the California Exchange, Covered California. The notice should also make the employees aware that they are eligible for a subsidy and what happens should they purchase a qualified health plan through Covered California.
  Preliminary Release Delay Announced DOL FAQs Technical Release 2013-12 Sample Notices
PATIENT CENTERED OUTCOMES RESEARCH INSTITUTE FEE (due by 7/31/13) Bus/ER   2013
HHS adopted additional guidelines for Women's Preventive Services in August 2011 - including well-woman visits, support for breastfeeding equipment, contraception, and domestic violence screenings - to be covered without cost sharing in all new plans starting August 2012. 
  Preliminary Draft Methodology Report Final Regulations More Info  
VOLUNTARY LTC INSURANCE PROGRAM, i.e. CLASS Act Bus/ER Indiv/EE indefinite delay
Delayed from 1/1/11. Feds have until 10/1/12 to issue further guidance. A voluntary national social insurance program providing limited Long Term Care (LTC) coverage through the workplace for employees. The government-run LTC option is intended to provide a baseline for extended care. All premium costs may be charged to employees.
  CLASS Analysis Delayed Rollout Guidance (SHRM) FAQs    
MAXIMUM HEALTH PLAN DEDUCTIBLES (eff 1/1/14) Bus/ER Indiv/EE 2014
Deductibles for small group health plans will be capped at $2,000 for individuals and $4,000 for individuals plus one or more. 
60-DAY LIMIT ON WAITING PERIOD (eff 1/1/14) Bus/ER Indiv/EE 2014
In California, Employers may not impose a waiting period longer than 60 days for health care coverage.
California AB 1083
  Technical Release 2012-01 Technical Release 2012-02 IRS Notice 2011-36  
SMALL BUSINESS TAX CREDIT PHASE 2 (eff 1/1/14)
Bus/ER   2014
Small employers with no more that 25 employees and average annual wages less than $50,000 that purchase health insurance for employees are eligible to receive a tax credit. For tax years 2014-and later, tax credit of up to 50% of employers contribution toward the employee's health insurance premium is available for up to 2 years, if the employer contributes at least 50% of the total premium cost or 50% of a benchmark premium. Use resources for additional guidelines and details.
IRS Guidelines Determining Eligibility FAQs Benchmark Premiums Tax Credit Calculator
  12/2/10 Guidance IRS Form 8941 Form 8941 Instructions      
ESTABLISHMENT OF STATE EXCHANGES (eff 1/1/14) Bus/ER Indiv/EE 2014
People without employer-sponsored coverage will be able to buy insurance on state-administered "exchanges". State-based American Health Benefit Exchanges and Small Business Health Options Program (SHOP) Exchanges will be administered by a government agency or non-profit organization, and allow individuals and small businesses with up to 100 employees to buy certain coverage.
Final Rule Fact Sheet News Release
  CA Exchange Website State by State July 2011 Update Initial Guidance 10/15/10 SEC Notice  
INDIVIDUAL COVERAGE MANDATE / PENALTY (eff 1/1/14)   Indiv/EE 2014
A penalty will be imposed on individuals not having qualified coverage. The penalty will be will be the greater of $95 per year up to a maximum of 3x's that amount (per family) or 1.0% of household income.
PREMIUM SUBSIDIES FOR INDIVIDUALS & FAMILIES (eff 1/1/14)   Indiv/EE 2014
Tax credits will be provided to individuals and families with incomes above Medicaid eligibility and below 400% of the Federal Poverty Level to buy coverage through state-based Exchanges. These individuals and families would be entitled to the credits if they are not eligible for or offered other "acceptable coverage".
OVERAGE DEPENDENT COVERAGE EXTENSION (eff 1/1/14) Bus/ER Indiv/EE 2014
After 2014, coverage must be offered to all dependents (including married children) even if they are eligible for other employer group coverage.
IRS Notice Fact Sheet IRS Tax Treatment FAQs (EBSA) FAQs (KFF) Model Notice
  Interim Final Regs          
ANNUAL LIMITS PROHIBITED (eff 1/1/14) Bus/ER Indiv/EE 2014
Individual and group health plans are prohibited from placing annual dollar limits on "essential health benefits."
  Interim Final Regs Essential Health Benefits      
PRE-EXISTING CONDITION EXCLUSION PROHIBITED (eff 1/1/14) Bus/ER Indiv/EE 2014
Individual and group health plan insurers are prohibited from applying pre-existing condition exclusions to all individuals for new and existing plans.
  Interim Final Regs          
STANDARDIZED MINIMUM BENEFIT OFFERINGS (eff 1/1/14) Bus/ER   2014
HHS to establish essential minimum benefit plan in which all health plans, individual and small group markets, must include coverage for these benefits.
  Fact Sheet Informational Bulletin        
WELLNESS PROGRAM INCENTIVES (eff 1/1/14) Bus/ER Indiv/EE 2014
Allows rewards for participation in wellness programs (groups with up to 100 full-time employees) with health-related standards of up to 30% (or 50% at discretion of HHS) of the cost of coverage in the form of premium discounts, cost-sharing waivers, or benefits that would not otherwise have been provided.
LIMITS ON AGE-BASED PREMIUMS (eff 1/1/14)   Indiv/EE 2014
Issuers that offer coverage in the Small Group market (in California, Small Group is 2-50 until January 1, 2016) must limit any variation in plan premiums to age (3 age brackets) and tobacco use, family size, and geography.
  Proposed Rule          
EMPLOYER COVERAGE MANDATE / PENALTY (eff 1/1/15) Bus/ER   delayed to 2015
Employers with 50 or more "full-time equivalent employees" must provide minimum essential coverage to all FTEs (30 or more hours per week) and their dependents. If an employer fails to offer minimum coverage to all FTEs, and at least one employee receives coverage through the state-based exchange, the employer must pay a $2,000 penalty per FTE; first 30 FTEs are excluded when calculating the penalty.
Proposed Rule 1/2/13 US Treasury Delay
  IRS Notice 2011-36 IRS Notice 2011-40 DOL Release 2012-01 IRS Notice 2012-31 IRS Notice 2012-58 IRS FAQs 12/28/12
INDIVIDUAL COVERAGE MANDATE / PENALTY (eff 1/1/15)   Indiv/EE 2015
A penalty will be imposed on individuals not having qualified coverage. The penalty will be will be the greater of $325 per year up to a maximum of 3x's that amount (per family) or 2.0% of household income.
INDIVIDUAL COVERAGE MANDATE / PENALTY (eff 1/1/16)   Indiv/EE 2016
A penalty will be imposed on individuals not having qualified coverage. The penalty will be will be the greater of $695 per year up to a maximum of 3x's that amount (per family) or 2.5% of household income. Penalty will be increased by the cost-of-living adjustment years thereafter.
EXCISE TAX ON HIGH COST EMPLOYER PAID COVERAGE (eff 1/1/18)   Indiv/EE 2018
Insurers and plan administrators will pay a 40% tax for any health insurance plan that is above the threshold of $10,200 for singles and $27,500 for families. The excise tax would apply to the amount of the premium that is above these thresholds. Dental and Vision are not included.
AUTOMATIC ENROLLMENT IN EMPLOYER SPONSORED PLAN Bus/ER   TBD
Employers with more than 200 full-time employees that offer health coverage must automatically enroll employees in a plan. Employees will be able to opt out of enrollment. The effective date is TBD.
  Technical Release          
           
       
 
 
 
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