In an effort to keep our clients and friends informed concerning this enormous legislative enactment, we have set up a specific location at our website to offer updates, timetables, and changes, to Health Care Reform. Please go to www.batesinsurancegroup.com, and then under “Resources” click on “Client Resources”. There you will find under “What’s New?” our “Health Care Reform Updates”. We post relevant information for you to stay on top of how this law affects you personally and corporately. Please don’t hesitate to contact one of our professionals with any questions you may have. The following update is provided by HealthPartners from their newsletter to their agent partners, entitled “Beyond Benefits”.
In March 2010, the Patient Protection and Affordability Act, commonly referred to as health care reform, was signed into law. A second, or reconciliation, bill was also signed by the President shortly after. Below is an update on some of the near-term provisions of health care reform.
Small Business Health Care Tax Credit - A provision of this law provides small business tax credits beginning in 2010. This tax credit is designed to be an incentive for small businesses to offer health care coverage to their employees through January 1, 2014. Learn more about the tax credit at www.irs.gov.
Dependents to Age 26 Provision - An upcoming provision of federal health care reform is the requirement to cover dependents to the age of 26. Beginning in May 2010, HealthPartners extended fully insured coverage to age 26 for any dependents who would lose coverage by turning age 25. This change was implemented early to prevent young adults from losing coverage due to age before this provision goes into effect for all groups on or after September 23, 2010, as groups renew. More information including details on what you need to do to be in compliance with this provision, is available in the health care reform section of healthpartners.com/employer.
Grandfathered plans – Last week, guidance was provided on what constitutes a grandfathered plan. HealthPartners is still working through this information and BIG will plan to have an overview posted in “Client Services” within the next few weeks.
Early Retiree Reinsurance Program (ERRP) - This provision of federal health care reform establishes a reinsurance program for employer-based early retiree plans. This program pays for up to 80 percent of the expenses incurred and paid between $15,000 and $90,000 per eligible early retiree, spouse or dependent, per plan year. If you are interested in applying for this program, please contact your agent. Many documents that are needed for your application are also posted online at healthpartners.com/employer.
Changes to consumer-directed health plans (CDHPs) - The following changes will go into effect January 1, 2011:
- No reimbursement of over-the-counter medications (except insulin) by health care Flexible Spending Accounts (FSAs), Health Reimbursement Accounts (HRAs) and Health Savings Accounts (HSAs).
- Eligible small employers (100 or fewer workers) are given a safe harbor from nondiscrimination requirements for cafeteria plans.
An additional tax on distributions from a HSA that are not used for qualified medical expenses is increased from 10 to 20 percent of the disbursed amount.