By Donnell | May 28, 2010
For employers with health insurance programs, the following changes are required starting January 1, 2014:
Pre-existing condition exclusions/Annual limits
- will not be allowed.
- if employers have more than 50 full time employees (FTE) and do not offer coverage, fines will be assessed at $2,000 per FTE for all FTE over 30 employees. This penalty will be assessed even if an employee purchases coverage through the governmental exchange or receives a subsidy from the federal government.
- if an employee opts out of an employer health insurance plan because the premiums are too expensive (specifically, if the premium exceeds more than 9.5% of the family’s income).
- if the employer’s health insurance plan is “low actuarial value”. A new and different definition of actuarial value is applied by this new legislation; percentage comparison of the insurance paid benefits plan relative to a “zero cost-sharing” (no coinsurance, deductibles, copays) plan.
- can be no longer than 90 days for plans starting on or after January 1, 2014.
- employees at certain income level, as defined by the legislation, must be provided a voucher equal to the cost of coverage that the employer would have paid on their behalf. The reconciliation bill accounts for the increase in the penalty employers will have to pay. Employers that do offer health care coverage might still be required to provide help to their low- and middle-income workers who opt out of the company’s health insurance plan and want to buy health insurance on their own. Any employee who earns less than four times the federal poverty level and pays more than 8 percent of their income for the employer-sponsored coverage will have the option of purchasing health insurance through health care exchanges, which the new reform law will create. If an employee chooses to purchase a health plan through an exchange, an employer will have to provide a “free choice voucher,” which must be equal to the amount paid to provide coverage to participants in the company’s health care plan.
- employees at companies with more than 200 employees must be automatically enrolled into the employer health insurance plan unless they waive the benefit.
Flexible Spending Accounts
- the annual limit will change from $5000 to $2500 excluding over-the-counter medications.
- for small businesses with wellness programs, grants will be available, for up to five years. Also discounts and incentives up to 30% (possibly 50%) on premium costs will be granted to individuals who satisfy a health standard.
40% excise tax in 2018 for High-Value Plans
- for coverages that are more than $10,200 for single coverage and $27,500 for families, excluding stand-alone dental and vision insurance programs. The limits are slightly greater for coverages for high risk industries and professions. Each year, the limits will be adjusted to the rate of inflation. Although the taxes would be assessed on the insurance companies and plan administrators, experts predict that the assessment would be passed on to the employee/participant/consumer in the form of increased premium costs or reduced benefits.
A couple of important earlier required changes:
W-2 Report Changes in 2011
- the value of the employee’s health insurance plan will be required to be listed/reported on the annual W-2
State Health Insurance Notifications – March 1 2013
- employers will be required to notify employees of state health insurance exchanges including specific info about the employer’s plan
With all the opposition and time between now and when the changes must take effect, there may be additional changes in the future. I’ll keep you posted. Be sure to read my article detailing the 2010 immediate employer changes
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