President Barack Obama signed landmark national health reform legislation last month. The Patient Protection and Affordable Care Act (PPACA) and the Health Care and Education Reconciliation Act (HCERA) require major changes to health care insurance practices and impact employers in several significant ways.
Here's the upshot:
Beginning in 2014, employers with more than 50 employees will be assessed a fee of $2,000 per full-time employee (in excess of 30 employees) if the company does not offer coverage and if at least one employee receives a premium credit through a health care Exchange. (Exchanges are the mechanisms created by the health reform bill to help individuals and small businesses purchase health insurance coverage.)
Employers who do offer coverage, but have at least one employee who receives a premium credit through an Exchange will be required to pay the lesser of $3,000 for each employee who receives a premium credit or $2,000 for each full-time employee. Additionally, if an employee opts out of an employer plan because coverage is "unaffordable" (premium exceeds 9.5 percent of family income), the employer must pay a $3,000 penalty for each full-time employee who receives a government subsidy and purchases coverage through an Exchange.
Several elements of health reform will take place in 2010 with significantly implications for employers and HR professionals:
Effective September 23, 2010, all existing health insurance plans:
- are prohibited from placing lifetime limits on the dollar value of coverage;
- are prohibited from rescinding coverage except in cases of fraud;
- are prohibited from employing pre-existing condition exclusions for children;
- must provide dependent coverage for adult children up to age 26