While many Americans are aware of the Affordable Care Act (ACA) and what may be in store in the near future, some are unaware of the longer term provisions still to come. Below is a look forward to the major mile markers on America’s road to health reform.
Today through late 2013
- Small business (fewer than 25 employees) tax credits: Small business tax credits have kicked in for companies with fewer than 25 full-time equivalent employees who cover at least 50 percent of the cost of health care coverage for each employee. These businesses will be eligible for a tax credit of up to 35 percent for two years. The tax credit then rises to 50 percent of the premium cost in 2014.
- Coverage for adult children: Parents are now able to keep their adult children on their health care policies until the age of 26.
- Pre-Existing Conditions Insurance Plan (PCIP): Those that have a pre-existing condition and have not been insured for at least six months will be eligible to access affordable care through their state. Known as the PCIP, premiums are based on a formula. Annual costs for the insured cannot exceed $5,959 for an individual and $11,900 for families.
- No rescission: Insurance coverage can no longer ban what is known as “rescission,” which is the cancelation of coverage when someone insured gets sick.
- No lifetime caps: Insurance coverage can no longer impose lifetime caps on policies.
- Free preventative care: All insurance coverage will be required to provide free preventative care that is recommended by a doctor. The change also applies to Medicare.
- Funding for low income and uninsured increased: The National Health Services Corp receives $11 billion in additional funding for community health centers.
- Annual review of insurance premium increases: A requirement was enacted that forces insurance companies to justify increases in insurance premiums and to report the share spent on non-medical costs.
- Medical Loss Ratio (MLR) reporting: Certain insurance companies must meet certain ratios of medical coverage by spending a minimum percentage (80 to 85 percent) of their adjusted premium revenues on health care claims.
- Medical Loss Ratio (MLR) rebate: In the event the ratios are not met, a rebate is required by the ACA.
- Flexible spending limits: Contributions are limited to $2,500 per plan.
- Employee’s 2012 W-2s: Companies must report on employee’s W-2s the cost of health coverage provided.
- Patient Centered Outcomes Research Institute (PCORI) fee: Patient-Centered Outcomes Research Trust Fund fee is a fee on issuers of specified health insurance policies and plan sponsors of applicable self-insured health plans. The fee funds comparative effectiveness research in health care.
- Open enrollment on exchanges begins: Enrollment opens in October of 2013 for health insurance exchanges.
- Notification of employees of health exchanges: Employers must now notify employees of health exchanges.
Beginning in 2014
- Health insurance exchanges operative: An uninsured non-elderly person can purchase health insurance directly from a state or federal affordable insurance exchange. An exchange is a newly-established marketplace in which individuals and small businesses can purchase health plans that meet benefits and cost standards. In addition, members of Congress will also be selecting their health care coverage through exchanges.
- Individual tax credit: There are subsidies for certain qualifying individuals purchasing coverage on the health insurance exchange.
- Individual Coverage Mandate or Individual Responsibility/Penalty: With some exceptions, those who decide not purchase health insurance will be subject to an annual penalty tax, starting at $95 per adult or one percent of family income, whichever is greater.
- Wellness incentives: These increase from 20 percent to 30 percent of cost of coverage.
- ERs with 200+ auto-enroll employees: This was changed from 2013 to 2014.
Beginning in 2015
- Employer Mandate/Penalty: There will be a mandate for employers with 50+ full-time equivalents to offer affordable medical coverage. The employer mandate was originally to begin in 2014. Starting in 2015, employers will be mandated to offer health coverage to employees.
- Tying payments to value: Physician payments will be tied to the quality of care they provide.
Beginning in 2016
- Operating rules for additional electronic transactions: The final phase of adding additional electronic transactions is in place.
- Reinsurance and risk corridor payments end: The reinsurance and risk corridor program ends, which was to protect against adverse movements and claims in the marketplace, while at the same time stabilizing premiums.
- Exchanges must offer coverage to small employers up to 100 employees: Small Business Health Options Program (SHOP) is a program that offers health insurance for small businesses. Employers with up to 100 employees must offer coverage. To those employers, SHOP will be available.
- Individual Coverage Mandate fee increase: The penalty for not having insurance will go up from $95 or one percent of a person’s income to $695 or 2.5 percent of a person’s income, whichever is greater.
Beginning in 2017
- Health insurance exchange changes: Exchanges may offer coverage to large employers with over 100 employees.
Beginning in 2018
- Cadillac Tax: This is a 40 percent excise tax on the value of benefits over $10,200 per individual and $27,500 per family. High-cost insurance plans will be taxed at a 40 percent excise tax rate. The taxes are at the insurer level on policies with premiums over $10,000 for individuals or $27,500 for families.
The information above was supplied and edited by John Presta via Examiner.com. John Presta is the author of an award-winning book titled, “Mr. & Mrs. Grassroots: How Barack Obama, two Bookstore Owners and 300 Volunteers did it,” released on January 20, 2010 by the Elevator Group. John is a writer, author, columnist, book reviewer, political analyst, political commentator, and a political pundit. John has been a frequent guests on a number of television and radio stations. John Presta, the son of Italian-born immigrants, was born and raised in Chicago, Illinois. He and his wife Michelle are community organizers and leaders. He is currently working on his next two books Mr. & Mrs. Grassroots series.
For more information about the Affordable Care Act from CBS Detroit, visit CBSDetroit.com/ACA.