Healthcare Reform Bill Highlights
- Insurance companies barred from denying coverage to children with pre-existing conditions (Effective six months following enactment)
- Children permitted to stay on their parents’ insurance policies until their 26th birthday (Effective six months following enactment)
- Seniors will get a $250 rebate to help fill the "doughnut hole" in Medicare prescription drug coverage, which falls between the $2,700 initial limit and when catastrophic coverage kicks in at $6,154
- New plans must provide coverage for preventive services without co-pays. All plans must comply by 2018 (Effective six months following enactment)
- Create a temporary reinsurance program for employers providing health insurance coverage to retirees over age 55 who are not eligible for Medicare. Program will reimburse employers or insurers for 80% of retiree claims between $15,000 and $90,000. Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan. Appropriate $5 billion to finance the program. (Effective 90 days following enactment through January 1, 2014)
- Provide small employers with no more than 25 employees and average annual wages of less than $40,000 that purchase health insurance for employees with a tax credit.
- Phase I: For tax years 2010 through 2013, provide a tax credit of up to 35% of the employer’s 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. The full credit will be available to employers with 10 or fewer employees and average annual wages of less than $25,000. The credit phases-out as firm size and average wage increases. Tax-exempt small businesses meeting these requirements are eligible for tax credits of up to 25% of the employer’s contribution toward the employee’s health insurance premium.
- Phase II: For tax years 2014 and later, for eligible small businesses that purchase coverage through the state Exchange, provide a tax credit of up to 50% of the employer’s contribution toward the employee’s health insurance premium if the employer contributes at least 50% of the total premium cost. The credit will be available for two years. The full credit will be available to employers with 10 or fewer employees and average annual wages of less than $25,000. The credit phases-out as firm size and average wage increases. Tax-exempt small businesses meeting these requirements are eligible for tax credits of up to 35% of the employer’s contribution toward the employee's health insurance premium
- Set up long-term care program under which people pay premiums into system for at least five years and become eligible for support payments if they need assistance in daily living
- A 50 percent discount will be provided on brand-name drugs for Prescription Drug Plan or Medicare Advantage enrollees. Additional discounts on brand-name and generic drugs will be phased in to completely close the "doughnut hole" by 2020.
- Medicare will provide free annual wellness visits and personalized prevention plans. New plans will be required to cover preventive services with no co-pay.
- $2,500 cap on tax-free flexible spending accounts
- The Employer Medicare Part D subsidy deduction will be eliminated. Employers will lose the tax deduction for subsidizing prescription drug plans for Medicare Part D-eligible retirees.
- Create exchanges where people without employer coverage, as well as small businesses, can shop for health coverage
- Insurance companies barred from denying coverage to anyone with pre-existing illness
- Requirement begins for most people to have health insurance. Subsidies begin for lower and middle-income people. People at 133% of federal poverty level pay maximum of 3% of income for coverage. People at 400% of poverty level pay up to 9.5% of income. (Poverty level currently is about $22,000 for a family of four.)
- Medicaid, the state program from the poor, expands to all Americans with income up to 133% of federal poverty level (currently about $22,000 for a family of four).
- Create an essential health benefits package that provides a comprehensive set of services, covers at least 60% 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. Require the Secretary to define and annually update the benefit package through a transparent and public process. (Effective January 1, 2014)
- Prohibit abortion coverage from being required as part of the essential health benefits package. (Effective January 1, 2014)
- Require all qualified health benefits plans, including those offered through the Exchanges and those offered in the individual and small group markets outside the Exchanges, except grandfathered individual and employer-sponsored plans, to offer at least the essential health benefits package.
- Require grandfathered group plans to eliminate lifetime limits on coverage and beginning in 2014, eliminate annual limits on coverage. Prior to 2014, grandfathered group plans may only impose annual limits as determined by the Secretary.
- Limit any waiting periods for coverage to 90 days.
- Limit deductibles for health plans in the small group market to $2,000 for individuals and $4,000 for families unless contributions are offered that offset deductible amounts above these limits. This deductible limit will not affect the actuarial value of any plans.
- Businesses with more than 100 employees can buy coverage on insurance exchanges, if state permits.
Paying for the Plan:
- Drug makers face annual fee of $2.5B (increases in future years)
- Exclude the costs for over-the-counter drugs not prescribed by a doctor from being reimbursed through an HRA or health FSA and from being reimbursed on a tax-free basis through an HSA or Archer Medical Savings Account. (Effective January 1, 2011)
- Increase the tax on distributions from a health savings account or an Archer MSA that are not used for qualified medical expenses to 20% (from 10% for HSAs and from 15% for Archer MSAs) of the disbursed amount. (Effective January 1, 2011).
- New Medicare taxes on individuals earning more than $200,000 a year and joint filers earning more than $250,000 a year.
- Tax on wages increases from 1.45% to 2.35%
- New 3.8% tax on unearned income (i.e. dividends and interest)
- Excise tax of 2.9% imposed on sale of medical devices
- Employers with more than 50 employees that do not provide affordable coverage must pay a fine, if employees receive tax credits to buy insurance. Fine is up to $3,000 per employee receiving a premium credit or $2,000 for each full time employee, excluding the first 30 employees. (Exempt employers with 50 or fewer employees from any of the above penalties.)
- Require employers that offer coverage to their employees to provide a free choice voucher to employees with incomes less than 400% FPL whose share of the premium exceeds 8% but is less than 9.8% of their income and who choose to enroll in a plan in the Exchange. The voucher amount is equal to what the employer would have paid to provide coverage to the employee under the employer's plan and will be used to offset the premium costs for the plan in which the employee is enrolled. Employers providing free choice vouchers will not be subject to penalties for employees that receive premium credits in the Exchange.
- Require employers with more than 200 employees to automatically enroll employees into health insurance plans offered by the employer. Employees may opt out of coverage.
- Insurance industry must pay annual fee of $8B, increasing in future years
- Penalty for those who don’t carry coverage rises to 2.5% of taxable income or $695, whichever is greater.
- Excise tax of 40% imposed on health plans valued at more than $10,200 for individual coverage and $27,500 for family coverage.
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