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Serious illness is a leading factor in personal-bankruptcy cases in the United States
There have been some big changes made to health care, and more are on the way.
Click the milestones to explore how the changes might affect you.
Nongrandfathered group health plans are required to offer preventive coverage to women without cost sharing for plan years beginning on or after Aug. 1, 2012. Under regulations, certain employers are exempt from the requirement to offer contraceptive coverage.
Major medical insurers that did not meet the new medical loss ratio (MLR) requirements were required to issue rebates to policyholders by Aug. 1, 2012. In most cases, it is the employer’s responsibility to distribute the participant portion within three months of receiving the rebate. The details on distribution depend on the type of plan offered (e.g., church plan, ERISA, etc.). In the future, any rebate due must be paid by Aug. 1, and for 2014 and later years, Sept. 30.
Health care reform creates incentives for doctors to form accountable care organizations (ACOs). These organizations allow doctors and other health care professionals to better coordinate patient care to help prevent disease and illness and reduce unnecessary hospital admissions or re-admissions.
The Department of Health and Human Services is developing rules for how plans report on benefits and how they pay health care providers to improve the quality of care and reduce costs.
Health plans are required to adopt rules for the secure, confidential and electronic sending of health information. Standard documents could reduce paperwork and administrative duties, lower costs and decrease medical errors.
Major medical insurers began sending all benefits enrollees and applicants a new summary of benefits booklet and coverage notice to explain their benefit plans and coverage. Self-funded plans were required to provide the new summary for annual enrollment periods on or after Sept. 23, 2012, as well as all other enrollments for plan years beginning on or after Jan. 1, 2013.
Starting with plan years ending on or after Oct. 1, 2012, issuers and plan sponsors are required to pay a new fee for the number of lives covered under each plan or policy subject to the fee, with the fee going to the PCORI fund. The funds will help contribute to research that evaluates and compares health outcomes and clinical effectiveness as well as the risks and benefits of two or more medical treatments and/or services. Since the fee is treated as an excise tax, it is filed through IRS Form 720. The PCORI fee is $1 per covered beneficiary for the first year and is due July 31, 2013, for the first year. The fee is temporary and does not apply to plan years ending on or after Oct. 1, 2019.
All employers that issued at least 250 Form W-2s in 2011 will need to report the value of health care coverage that employees participated in during the 2012 plan year on the employee’s Form W-2. Some items, such as stand-alone dental, vision and health savings account contributions, are excluded from this reporting requirement. Although the value must be reported, it is not taxable for the business or employee.
The ACA limits the amount of participant pretax dollars that can be used to cover health expenses through flexible spending accounts (FSAs).
Employers will no longer be able to deduct retiree drug expenses for which they receive a Medicare Part D retiree drug subsidy payment.
Health care reform imposes an additional 0.9 percent hospital insurance tax and a separate 3.8 percent net investment income tax on higher income individuals to help fund Medicare Part A.
Health care professionals collaborate to improve coordination and quality of care.
Employers subject to the Fair Labor Standards Act are required to notify employees of the health insurance marketplace and potential eligibility for premium credits. The first notice was required by Oct. 1, 2013.
HHS provided temporary relief from some of the second wave of health reform requirements that go into effect in 2014. Relief is provided, if permitted under state law, for individual and small group policies renewed between Jan. 1, 2014 and Oct. 1, 2014. The transition relief was subsequently extended through Dec. 31, 2017.
Health care reform requires almost all Americans to have qualifying health coverage (QHC) that offers minimal essential coverage (MEC), or pay a penalty. The mandate is repealed in 2019.
Effective 2014, small businesses and individuals will have the opportunity to participate in the federal- and state-facilitated health insurance marketplace. Specific information by state can be found at healthcare.gov.
During the first-three years of insurance market reforms (2014-2016), a temporary reinsurance program for the individual insurance market will be funded by a required contribution from all group major medical plans. The per capita amount is paid for each enrollee by the insurer or the self-funded plan.
Small-business tax credits will expand to 50 percent of a small business’s premium costs for two consecutive years. These credits are available to businesses with average wages between $25,000 and $50,000, that have fewer than 25 full-time workers (or 50 part-time workers) and that offer health insurance through the Small Business Health Options Program (SHOP) marketplace.
Updated model notices inform eligible employees about government marketplace options.
Nongrandfathered health care plans must not discriminate against a policyholder because of a clinical trial and can’t deny people from participating in clinical trials. They can’t limit coverage of routine patient costs for items and services in connection with the trial.
This fee on health insurers, including HMOs, is based on each insurer’s share among all health insurers of U.S. health risks. It starts at $8 billion in 2014 and increases year over year before reaching $14.3 billion in 2018. In December 2015, the Health Insurance Industry Fee was suspended for 2017. The fee is suspended for 2019... and later repealed in 2020.
Maximum reward is 30 percent of costs or 50 percent for programs related to tobacco use.
Employers with at least 100 full-time equivalent employees must offer affordable, minimum value health coverage to at least 70 percent of their full-time employees and their dependents, unless the employer qualifies for 2015 dependent coverage transition relief, or face a penalty.
On June 25, 2015, the Supreme Court ruled on an important issue affecting health insurance in the U.S. The decision upheld a key part of the Affordable Care Act by affirming an eligible individual’s ability to obtain subsidized health insurance through a federal exchange.
Employers with at least 50 full-time equivalent employees must offer affordable, minimum-value health coverage to at least 95 percent of their full-time employees and their dependents, or face a penalty.
Most states define small businesses as those with 50 or fewer employees, but the Affordable Care Act was originally set to expand the definition in 2016 to include those with 51 to 100 employees, including full-time equivalents (FTEs). The president signed a bill on Oct. 7, 2015, that no longer requires states to expand their definition. Instead, states can use their own discretion. The new law is meant to help curb premium hikes in the small-group market.
Businesses are required to report information regarding the health coverage of your employees, including basic employee data, dates and type of coverage; cost-sharing; and any other information required by the IRS. These requirements apply to coverage offered on or after Jan. 1, 2015, but the first report will not be due until 2016.
Non-grandfathered family plans must have an “embedded” individual out-of-pocket maximum.
With approval from Health and Human Services (HHS), states will have an option to open their public marketplace to any size employer.
The President signs an executive order directing federal regulatory agencies to develop rules to minimize the economic and regulatory burden of the Patient Protection and Affordable Care Act and to prepare to afford states more flexibility and control of health care markets.
Individuals are no longer required to have health insurance or pay a tax penalty. Health insurers fee is suspended for 2019, but still applied in 2020.
The Cadillac plan tax, which never went into effect, was a 40% excise tax on the cost of certain employer-sponsored health coverage in excess of a specified dollar threshold. The tax was originally scheduled to go into effect in 2018 but was delayed twice. Even with the delayed effective date, some employers started to modify their health insurance plans to avoid triggering the tax, including increasing deductibles and copays. The push for repeal grew as many policymakers increasingly viewed the tax as having an effect on middle-class workers.
The HIT is imposed on health insurers based on their relative market share of premiums for major medical plans and certain other health insurance plans. Although the tax was imposed on the health insurance company, it generally passed through to consumers as part of the premium. The tax went into effect in 2010 and was suspended in 2017, went back into effect in 2018 and was again suspended in 2019. The tax applied for 2020 but is repealed starting in 2021.
The medical device tax was a 2.3 percent excise tax on gross sales of medical devices used by humans such as x-ray machines and hospital beds. It was implemented in 2013, but was suspended in 2015. The 2019 year-end legislation repeals the tax effective 2020.
Congress' end-of-year legislation extends the PCORI fee for 10 years, so that it applies to plan years beginning on or after Oct. 1, 2012 and ending before Oct. 2029.
As amended by the Coronavirus, Aid, Relief and Economic Security (CARES) Act, the Families First Coronavirus Relief Act requires most health plans to cover certain COVID-19 testing and related services without cost sharing, effective March 18, 2020, for the duration of the COVID-19 public health emergency. The CARES Act also accelerates the time that any COVID-19 preventive care services are covered by the ACA preventive care mandate to 15 days after the United States Preventive Services Task Force or the Centers for Disease Control and Prevention recommends such services as preventive care.
This material is intended to provide general information about an evolving topic and does not constitute legal, tax or accounting advice regarding any specific situation. Aflac cannot anticipate all the facts that a particular employer or individual will have to consider in their benefits decision-making process. We strongly encourage readers to discuss their HCR situations with their advisors to determine the actions they need to take or to visit healthcare.gov (which may also be contacted at 1-800-318-2596) for additional information.
Individual coverage is underwritten by Aflac. Group coverage is underwritten by Continental American Insurance Company (CAIC), a wholly-owned subsidiary of Aflac Incorporated. CAIC is not licensed to solicit business in New York, Guam, Puerto Rico, or the Virgin Islands. For groups sitused in California, group coverage is underwritten by Continental American Life Insurance Company. For individual coverage in New York or coverage for groups sitused in New York, coverage is underwritten by Aflac New York.
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