08 Nov Timeline for Health Insurance Reform
By Callan Carter (San Francisco)
The effect of the recent healthcare legislation is beginning to be felt. Several changes (including pool coverage for high-risk people, extension of tax-dependent status of children to age 26, and a 10% excise tax on tanning salon services) have already been implemented and are not included on the chart below. A huge number of other changes are now scheduled to phase in over the next several years.
To help give you an idea of the scope of requirements heading your way over the next few years, we’ve developed a timeline chart setting out the most significant aspects of the law, through 2011 and 2012. A more extensive version of this timeline can be found on our website under “publications” and then “resource materials.”
A full and complete explanation of each of these changes isn’t possible in an article such as this one. To discuss how these changes could affect your business please contact us.
| Reform | Effective Date |
|---|---|
| Increase the age of a dependent child for health plan coverage to 26 | First Plan Year beginning on or after 9/23/10 (1/1/11 for calendar year plans)
Grandfathered Plans: before Plan Year beginning on and after 1/1/14, only have to enroll older child if they are not eligible to enroll in their own employer’s plan |
| No lifetime limits on dollar value of health plan coverage | First Plan Year beginning on or after 9/23/10 (1/1/11 for calendar year plans) |
| Coverage of preventive services by non-grandfathered plans | First Plan Year beginning on or after 9/23/10 (1/1/11 for calendar year plans) |
| No prior authorizations and same cost sharing in and out of network for non-grandfathered plans | First Plan Year beginning on or after 9/23/10 (1/1/11 for calendar year plans) |
| Participants may choose any primary care provider, may designate a pediatrician as primary care provider of child and no referral needed for OB/GYN for non-grandfathered plans | First Plan Year beginning on or after 9/23/10 (1/1/11 for calendar year plans) |
| Nondiscrimination rules of Code section 105(h) apply to fully-insured non-grandfathered plans | First Plan Year beginning on or after 9/23/10 (1/1/11 for calendar year plans) |
| External claims review process for non-grandfathered plans | First Plan Year beginning on or after 9/23/10 (1/1/11 for calendar year plans) |
| Elimination of all pre-existing condition limitations or exclusions for all children under 19 | First Plan Year beginning on or after 9/23/10 (1/1/11 for calendar year plans) |
| No rescission of coverage unless fraud or intentional misrepresentation of material fact. Advance notice of rescission required. | First Plan Year beginning on or after 9/23/10 (1/1/11 for calendar year plans) |
| Prohibition of certain annual limits | First Plan Year beginning on or after 9/23/10 (1/1/11 for calendar year plans) |
| Minimum medical loss ratios limited to 85% for large plans and 80% for plans with less than 100 employees or rebates required | Plan Years beginning on or after 3/23/10, but rebates begin 1/1/11 |
| Excise tax on nonqualified distributions from a Health Savings Account increased from 10% to 20% | 1/1/11 |
| Prohibition of over-the-counter drugs as an eligible expense in HSAs, HRAs and FSAs unless prescribed or insulin | 1/1/11 |
| Grants awarded to small employers (less than 100 employees who work 25+ hours/week) to provide access to wellness initiatives if no wellness program in place on 3/23/10 | 1/11/11 |
| W-2 reporting of cost of employer-sponsored health coverage | Optional for 2011 Forms W-2; mandatory thereafter. |
| New standardized benefits summary/explanation of coverage. 60-day advance notice of any material change. | No later than 3/23/12 |
| Group plans must report annually to HHS and plan participants about plan benefits designed to improve the quality of care | Regulations to be issued no later than 3/23/12 |
| Self-funded health plans must pay comparative effectiveness fee of $1 in 2013 (then increased to $2) per participant. Insurance carriers pay fee for fully-insured policies/plans. Scheduled to end 2020. | Plan Years/Policy Years ending after 9/30/12 |
| Elimination of employer deduction for subsidy under Medicare Part D (immediate impact on employers’ liability and income statements) | ER Tax Years beginning after 12/31/12 |