Reminder – Things you need to know now for health care reform

While not all inclusive, these highlights will help you to be better informed of the key areas that impact your employee benefits program.  For all practical purposes, these changes are effective for plan years on or after October 1, 2010.  Please call or email if you need assistance or have questions.   

Your responsibilities include:

1.  W2 reporting of employer contributions for health care coverage, excluding HSA and FSA contributions.  This will be on the W2 for the 2011 plan year…it is not taxable, just reportable.  Get ready to start tracking this beginning in January.
2. Allow dependent children to remain covered on the plan until age 26, even if they are married, and not dependent upon the employee for financial support.
3. Changes to Flexible Spending Accounts – Over the Counter drugs may no longer be reimbursable, unless prescribed by a physician.  The maximum annual deferral will be reduced to $2,500.
4. Determine if your health plan discriminates in favor of highly compensated individuals, and if so, read the next section.

Important things to remember about “grandfathered plans”:

1. Plans in place on or before March 23, 2010, are considered to be “grandfathered”, and not subject to certain reform provisions, such as the inability to discriminate in favor of highly compensated individuals.  This is significant if your company offers an executive medical reimbursement plan, such as Exec-U-Care™. 
2. New health plans going forward cannot discriminate in favor of highly compensated individuals.  Companies may continue to offer executive plans other than health, such as life insurance, disability coverage, long term care insurance and non-qualified retirement plans for executives. 
3. If you want to keep your grandfathered plan the way it is, make no changes other than adding or deleting new employees who are in the same class or category as before.
4. Some of the new provisions still apply to grandfathered plans, including the requirement to cover dependents to age 26, unless they have other group coverage available.

Small Business Tax credits and grants

1. Tax credit are available retroactive for premiums paid beginning in 2010 for companies who pay at least half of employee health care premiums. 
2. These are for companies with fewer than 25 employees earning average annual wages of less than $50,000, and for companies with 10 or few employees earning $25,000 or less on average. 
3. Kaiser and NFIB have both posted calculators to estimate annual credits.  Here is a link to a Kaiser Excel spreadsheet for the calculation:  https://secure.logmein.com/f?aFNjy5-iziOysR3osHlk6MVIbaofwyQPytvs5s3w.Dw
4. Small group employer-based wellness program grants will be available beginning in 2011.
5. Unrelated to healthcare reform, there are also hiring tax credits.  New employees must have been unemployed for the past 60 days to qualify for either the Social Security exemption or the $1,000 Federal Tax credit.  Here is a link to the guide:  http://www.qqestpayroll.com/documents/pdf/hire_act_guide.pdf

Insurance changes for plans that renew on or after October 1, 2010:

1. No lifetime benefit limits based on dollar amounts – allowed restricted yearly limits on the dollar value of certain benefits.
2. No cost-sharing obligations for certain preventive services. 
3. No pre-existing condition exclusions for dependent children under 19 years of age.
4. No coverage rescissions/cancellations, except for fraud or intentional misrepresentation.
5. Must have dependent coverage up to age 26.
6. New health plan disclosure and transparency requirements.
7. New internal and external appeal processes.

Pre-existing condition coverage for individual market consumers:

1. Check out the website www.healthcare.gov for information about a high-risk pool for people who have been uninsured for at least six months, and cannot obtain current individual coverage. 
2. There is another website that has been around a long time which helps people who are uninsured by showing them all of their options, both public and private.  There is an online questionnaire and brochures for free downloads at www.coverageforall.org.

 For a more detailed timeline prepared by the national Association of Health Underwriters, click here:  http://www.nahu.org/legislative/resources/Reform%20Timeline%20revised%20july%20_2_.pdf?ibcToken=319abcd0-9e34-4cbe-8429-3dcff02e20b5