Key Provisions Effective In 2013 and Beyond

Many employers wonder what is required versus what is optional under health care reform. Here is a checklist of what is currently in effect.

Already in effect:

• Employers that offer health care coverage must offer it to employees’ adult children through age 26.

• Employers offering health insurance are responsible for making sure that:

the insurance covers 100% of the cost of preventative services such as mammograms and colonoscopies;

the insurer does not (and cannot) place any “lifetime limits” on health coverage;

the insurer does not (and cannot) exclude children age 19 or younger from coverage due to pre-existing conditions; and

employees are informed that coverage cannot be rescinded retroactively (with few exceptions).

• Over-the-counter medications can be purchased with FSA, HRA or HAS funds only with a doctor’s prescription.

• Employers with fewer than 25 full-time equivalent employees with an average wage below $50,000 a year may be eligible for tax credits for sponsoring health coverage.

• Starting with the first open enrollment on or after Sept. 23, 2012, employers must obtain from their insurers and issue to employees a Summary of Benefits and Coverage (SBC).

• For 2012, insurers must issue the first Medical Loss Ratio (MLR) rebates.  This is a complicated area; check with your carrier.

Reminder on Insurance Rebates:

The Affordable Care Act of 2010 requires that insurers rebate a portion of premiums when administrative expenses exceed 20% of total premiums paid.  Employers can keep the portion attributable to the employer-paid premiums.  But the employee portion generally must be refunded to them within 3 months.

Starting in 2013:

• Health Care FSAs that operate on a calendar-year must comply with a $2,500 limit on employee contributions beginning in 2013.

• Employers must withhold an additional 0.9% employee Medicare tax on wages in excess of $200,000.

Starting in 2014:

• State health insurance exchanges must be up and running.

• Insurers cannot restrict coverage for adults over age 19 with pre-existing conditions.

• Companies with over 50 employees will be subject to a penalty of up to $2,000 per employee for not offering employee health care coverage.

• Employers can increase the value of incentives for employees who participate in wellness programs to 30% of the cost of health coverage costs.

Many additional provisions will be implemented as far out as 2018.

* Reprinted with permission from The General Ledger published by AIPB. All rights reserved.”