A Checklist for Health-Care Reform How the latest changes affect your small business.
By John Moccia
Do Cliff's Notes still exist? I owe much of my High School academic mediocrity to those little yellow books.
Right about now many Americans would love a Cliff's Notes version of the Patient Protection and Affordable Care Act ("Obamacare" or PPACA), which effectively kicked in on September 23, 2010.
The goal of the Act is to simplify our health care system, making insurance available and affordable for all Americans. In written form, it is a maze of political jargon involving everyone from the IRS to the Department of Homeland Security. Many changes, large and small, began in September and will continue over the course of several years -- until 2014 -- when every American must be insured.
So as an individual, business owner or executive, how will you be impacted by the changes that are taking place? It's hard to say, really, as many of the reforms are still "subject to change" and the overall plan literally moves on a daily basis. However, there are some significant points that may have an immediate impact for you, your company, your employees and your family:
1. Grandfathering
The Patient Protection and Affordable Care Act (PPACA) technically had a trigger date of March 23, 2010. Any changes made by the PPACA went into effect 6 months later, in September.
One provision in the PPACA states that plans may be "grandfathered," meaning if they meet certain criteria, they are exempt from having to conform to the new rules. In order to have this grandfathered status, essentially you must have a plan that has had no material changes since the legislation was enacted in March. This includes no changes in co-pay, deductibles, etc. And if your company has more than one plan, each may be considered for grandfathered status individually.
Bottom line: you may not have to worry about some or all of this … for now, anyway.
2. Non-Discrimination
Many companies use employee benefits to attract and retain key executives. One way this is done is by offering special plans that provide richer coverage benefits for just key individuals such as C-level executives. Moving forward, this is a major no-no.
Significant fines will be assessed to any company that has discriminatory plans -- as much as $100 per day, per employee. If you are grandfathered this is one of the changes that will not apply to you. So how do you show those key execs the Love? Just pay 'em.
3. Dependents Until Age 26
You know that college grad that you just hired to do programming? He can continue to be covered on his parent's health insurance - until he's 26! It doesn't even matter if he lives at home or gets married (his spouse can't be covered, though).
This may mean that many companies can reduce the number of covered employees, reducing their overall employee health care costs and improving the bottom line. (It may also mean more covered people for larger groups, where your premium is based partly on claims experience -- and therefore higher costs!) For NY companies, individuals can also be covered until they are 29, they just have to cover their own premium for the three years after their 26th birthdays.
4. No Maximums
According to the PPACA, there can no longer be limits on certain "essential benefits." While the term "essential benefits" is still up for debate, this does mean that a medical insurance policy can no longer have a lifetime limit or policy limit such as $1,000,000.
There can also no longer be limits on the amount of coverage that is available for prescription drugs. Some parts of this, such as the number of days that are available for physical therapy, are still being worked out, but all-in-all, this should be a positive change.
5. Preventative Care
There can no longer be a charge or co-pay for preventative care.
Guess there goes your last excuse to not have that annual physical, tough guy.
6. Crackdown on Flexible Spending Accounts
As of January 11, 2011, Flexible Spending Accounts (FSAs) will no longer allow certain types of over-the-counter drugs to be covered without a medical prescription.
Aspirin, allergy meds, and yes -- even anti-gas products -- are no longer eligible for FSA coverage (Band-aids are still covered!). The list is long, and your guess is as good as mine as to where the lines were drawn.
