The three-judge panel of the 11th Circuit Court of Appeals in Atlanta ruled 2-1 that the individual mandate is unconstitutional.

“The individual mandate exceeds Congress’ enumerated commerce power and is unconstitutional,” wrote Judge Joel Dubina. “This economic mandate represents a wholly novel and potentially unbounded assertion of congressional authority: the ability to compel Americans to purchase an expensive health insurance product they have elected not to buy, and to make them re-purchase that insurance product every month for their entire lives.”

Judge Frank Hull, an appointee of former Democratic President Bill Clinton, backed Judge Dubina, an appointee of former Republican President George W.H. Bush. Judge Stanley Marcus, also a Clinton appointee, said Congress does have the authority to require individuals to obtain insurance.

“Congress rationally found that the individual mandate would address the powerful economic problems associated with cost shifting from the uninsured to the insured and to health care providers, and with the inability of millions of uninsured individuals to obtain health insurance,” Judge Marcus wrote. “Thus, to the extent the plaintiffs’ individual liberty concerns are rooted in the Fifth Amendment’s Due Process Clause, they must fail.”

The lawsuit was originally filed in Florida by 26 states, where a federal judge ruled against the individual mandate and struck down the law in its entirety.

The 11th Circuit ruling conflicts with a Cincinnati appeals court ruling that found the coverage requirement to be within the authority of Congress. An additional federal appeals court in Richmond is also deciding on the same issue.

To determine if you need life insurance, think through this worst-case scenario: If you died tomorrow, how would your spouse and children fare financially? Would they have the money to pay for your final expenses, including funeral costs, medical bills, taxes, credit-card debts, and attorney fees? Would they be able to meet ongoing living expenses, such as the monthly home mortgage or rent, food, clothing, transportation costs, and healthcare? What about long-range financial goals?

Without your contribution to the household, would your surviving spouse be able to save enough money to put the kids through college or retire comfortably? It’s always a struggle when you lose someone you love, but your emotional ordeal does not need to be compounded by financial difficulties.

Life insurance helps make sure that the people you care about will be provided for financially, even if you’re not there to care for them anymore. To help you understand how life insurance might apply to your particular situation, contact a local professional who can sit down and explain the various options. Whether you’re young or old, married or single, with or without children, you need to make the time to consider how life insurance might fit into your financial plans.

Medigap

Medigap (Medicare Supplemental Insurance)

Medigap is NOT run by the government. It is sold by private insurance companies to those enrolled in Toledo, Ohio Medicare to help take care of any costs left over by your Medicare health coverage. While Medigap health coverage is not run by the government, it is standardized by law to ensure that the benefits you get are the same, no matter where you purchase the insurance. It is still highly advised to shop around because, while the health coverage benefits are the same, the prices can vary from one Toledo, Ohio insurance company to the next.

Medicare Advantage

Medicare Advantage is the name given to talk about a variety of private Toledo, Ohio health care plans. Among these plans are PPOs, HMOs, PFFS (Private Fee for Service Plans) and others.

Also known as Medicare Part C, Medicare Advantage is an alternative to a traditional Medicare health plan. This means that unlike Medigap, Medicare Advantage takes the place of Medicare instead of just supplementing it. With a Medicare Advantage plan, you are not eligible to enroll in a Medigap plan or a stand-alone prescription drug plan.

This doesn’t mean that Medicare Advantage is worse than Medicare with the Medigap supplement or that you will receive less coverage. Medicare Advantage plans offer the same benefits as traditional Medicare.  The Medicare Advantage plan just utilizes a copayment system and can offer additional benefits. Copayments may be lower than traditional Medicare and they could be higher. Every plan is different and this requires you to do research and shop around for the best policy for you.

Choosing a Toledo health insurance plan can be confusing and frustrating for the uninitiated. No cookie-cutter plan exists that will be perfect for everyone. There are lots of different options and each insurance plan has its own pro’s and con’s. Decisions must be made based on income, convenience, location (Toledo, Sylvania, Maumee, Perrysburg, etc.) preference, and other things. Let’s take a look at the different insurance plans available.

Traditional Health Insurance

In the beginning, the dominating health insurance plan was traditional, or indemnity, insurance. In this type of insurance you may choose any doctor, health provider, or hospital for the care you need and your insurance company will foot the bill. Once you have paid the plan’s yearly deductible, the insurance company will begin to cover your expenses.

In the Toledo area and abroad, health insurance costs are climbing rapidly. Managed Toledo Health Insurance Plans have been created to provide health care for less cost to the patient.

Managed Toledo Health Insurance Plans

Health Maintenance Organization (HMO)

HMO’s are very controlled. This means, while you can choose your doctor, hospital, etc., you must choose one endorsed by the HMO. If you choose a physician working outside the HMO, your expenses will not be covered by your health insurance company.

While you lose a lot of freedom in your choice of a Toledo health care provider, you gain by, typically, paying a lot less out-of-pocket expenses. There are, usually, no deductibles or limits for these plans and the cost to you is one, simple, monthly premium.

Point-of-Service Insurance Plan

The cousin of the HMO, a POS plan can be very similar. Both operate inside a network of doctors and facilities and choosing outside of the network will cost you. Where they differ is, instead of not covering expenses outside of the network like an HMO – with a POS plan, you will only pay the difference.

Preferred Provider Organization (PPO)

Like all the Managed Toledo Health Insurance Plans, a PPO operates within a network of preferred doctors and hospitals. These physicians and facilities have agreed to accept a discounted fee for their services. Often, upon enrolling in a PPO, you will be required to pick a doctor from a list of health care providers to control and direct your care.

If you would like to be able to choose your physician and are will to pay some of the costs, you might want to research a Preferred Provider Organization plan.

Independent Practice Association

Last, but not least – the IPA plan. The IPA plan’s network of doctors is loosely organized, where the doctors operate out of their own private offices and treat IPA patients as well as non-IPA. Normally, IPA coverage is only available to groups.

Some of the doctor’s income depends on the IPA’s success. The group of participating doctors share any loss or gain in profit from the IPA.

Timeline of Health Insurance Reforms that Will Impact Private Health Insurance Coverage under H.R. 3590, the Patient Protection and Affordable Care Act and the Health Care and Education Affordability Reconciliation Act of 2010

January 13, 2011

Grandfathered Health Plans

Individuals and employer group plans that wish to keep their current policy on a grandfathered basis would only be able to do so if the only plan changes made were to add   or delete new employees and any new dependents. In addition, an exception is made for employers that have scheduled plan changes as a result of a collective bargaining agreement. Even if a plan is grandfathered, some of the new market reform provisions will still be applicable including many that take effect within six months. These are noted by provision elsewhere in this summary.

Effective Date: Immediately. Grandfathered status is available for plans in effect on date of enactment.

Small Employer Tax Credits

Makes available tax credits for qualified small employer contributions to purchase coverage for employees. In order to qualify, the business must have no more than 25 full-time equivalent employees, pay average annual wages of less than $50,000 and provide qualifying coverage. The full amount of the credit will be available to employers with 10 or fewer employees and average annual wages of less than $25,000, and will phase out when those thresholds are exceeded. The average wage threshold for determining the phase-out of credits will be adjusted for inflation after 2013. Small employers will receive a maximum credit of up to 50% of premiums for up to 2 years if the employer contributes at least 50% of the total premium cost. The credit would phase out entirely for employers of more than 25 employees whose average annual salaries exceeded $50,000.

Employers will not be eligible to use the credit for certain employees, including defined “seasonal workers,” self-employed individuals, two percent shareholders of an S corporation (as defined by section 1372(b), five percent owners of a small business (as defined by section 416(i)(1)(B)(i)) and dependents or other household members. However, leased employees are eligible employees for the credit. Employers receiving credits will be denied any deduction for health insurance costs equal to the credit amount.

Effective Date: Immediately. Retroactive for premiums paid in taxable years beginning after December 31, 2009.

BCBS Plans

Limits the special deduction for Blue Cross Blue Shield organizations of 25% of the amount by which certain claims, liabilities, and expenses incurred on cost-plus contracts exceed the organizations’ adjusted surplus. The special deduction will be available only to those otherwise qualifying BCBSA plans that expend at least 85% of their total premium on reimbursement for clinical services provided to enrollees.

Effective Date: Immediately. (Taxable years beginning after December 31, 2009).

Employer Subsidies of Medicare Part D Premiums

Elimination of employer deductible subsidy under Medicare Part D. This provision will have an immediate impact on employers’ liability and income statements — FAS 109 requires employers to immediately take a charge against current earnings to reflect the higher anticipated tax costs and higher FAS 106 liability.

Under ASC 740, the expense or benefit related to adjusting deferred tax liabilities and assets as a result of a change in tax laws must be recognized in income from continuing operations for the period that includes the enactment date. Therefore, the expense resulting from this change will be recognized in the first quarter of 2010 even though the change in law may not be effective until later years.

Effective Date: 2012.

Changes to the OEP

Beginning January 1, 2011, the OEP is eliminated and replaced with an Annual Disenrollment Period (ADP). Medicare Advantage enrollees only will be allowed to make a one-time switch to Original Medicare 1 or choose Part D coverage. Original Medicare beneficiaries will lose their ability to make a plan change beyond the annual election period.

Effective Date: 2011.

Grants for State Insurance Ombudsman Programs

Allows the Secretary of DHHS to award grants to States (or the Exchanges operating in such States) to establish, expand, or provide support for offices of health insurance consumer assistance or health insurance ombudsman programs to, in coordination with State health insurance regulators and consumer assistance organizations, receive and responds to inquiries and complaints concerning health insurance coverage with respect to Federal health insurance requirements and under State law. $30 million is appropriated to fund these grants in FY 2010, but the Secretary of DHHS will have to request additional
appropriations to fund the grant program in the out-years.

Effective Date: Immediately.

Rate Review

Establishes federal review of health insurance premium rates. The Secretary of DHHS, in conjunction with the states, will have new authority to monitor health insurance carrier premium increases beginning in 2010 to prevent unreasonable increases and publicly disclose such information. Carriers that have a pattern of unreasonable increases may be barred from participating in the exchange. In addition, $250,000,000 is appropriated for state grants to increase their review and approval process of health insurance carrier premium rate increases.

Effective Date: Immediately. (2010 plan year.)

Therapeutic Discovery Tax Credit

Creates a federal tax credit for businesses with 250 fewer employees that make a qualified investment in acute and chronic disease research during 2009 or 2010.

Effective Date: Immediately and based on investments paid in taxable years beginning in 2009 or 2010.

Indian Health Benefits

Native Americans may exclude from gross income the value of qualified health benefits received directly or indirectly from the Indian Health Service or from an Indian tribe or tribal organization.

Effective Date: Immediately for health benefits and coverage provided after the date of enactment.

Preexisting Condition Coverage for Individual Market Consumers

Creates high-risk pool coverage for people who have been uninsured for at least six months and cannot obtain current individual coverage due to preexisting conditions. This national program can work with existing state high-risk pools and will end on January 1, 2014, once the Exchanges become operational and the other preexisting condition and guarantee issue provisions take effect. It will be financed by a $5 billion appropriation and premiums will be capped. Employers are prohibited from putting individuals into the high-risk pool with associated fines.

Effective Date: Within 90 days of enactment.

Early Retiree Reinsurance
program

Creates a temporary reinsurance program for employers providing health insurance coverage to retirees over age 55 who are not eligible for Medicare. This program would reimburse employers retrospectively 80% of claims between $15,000-90,000, which will be indexed for inflation. It will end on January 1, 2014 and be financed by a $5 billion appropriation.

Effective Date: Within 90 days of enactment.

Web-Based Information Portals

Requires the states and the Secretary of DHHS to develop information portal options for state residents to obtain uniform information on sources of affordable coverage, including an Internet site. Information must be provided on private health coverage options, Medicaid, CHIP, the new high-risk pool coverage and existing state high-risk pool options.

Effective Date: By July 1, 2010.

Excise Tax on Indoor Tanning

Ten percent excise tax on amounts paid for indoor tanning services, whether or not an individual’s insurance policy covers the service. Service provider to assess tax on customer.

Effective Date: Services performed on or after July 1, 2010

Varying Health Plan Rules Based on Salary

Requires all group health plans to comply with the Internal Revenue Section 105(h) rules that prohibit discrimination in favor of highly compensated individuals.

Effective Date: On December 23, 2010, the IRS issued guidance that this provision will not be enforced until regulations are issued.

Lifetime Benefit Limits

For fully-insured and self-insured group and individual health plans including health plans with grandfathered status, prohibits lifetime limits on the dollar value of benefits for any participant or beneficiary.

Effective Date: Plan years beginning on or after six months after date of enactment (September 2010).

Annual Benefit Limits

For fully-insured group and self-insured group and individual health plans, including health plans with grandfathered status, annual benefit limits on coverage would be limited to DHHS-defined non-essential benefits for plan years beginning prior to January 1, 2014. (Annual limits would be prohibited entirely for subsequent plan years.)

Effective Date: Plan years beginning on or after six months after date of
enactment (September 2010).

Increased Dependent Coverage

For fully-insured and self-insured group and individual health plans, including health plans with grandfathered status, increases the age of a dependent for health plan coverage to age 26. Dependents can be married, and the group health insurance income tax exclusion would apply to value of the benefits provided for these dependents.

For grandfathered group health plans only, through 2014, coverage would only have to be extended to these dependents id they do not have another source of employer-sponsored health insurance.

Effective Date: Plan years beginning on or after six months after date of
enactment (September 2010).

Policy Rescissions

Prohibits rescissions of health plan coverage in all insurance markets including self-insured plans and those with grandfathered status,, except for cases of fraud or when enrollees make an intentional misrepresentation of material fact as prohibited by the terms of the plan or coverage. Coverage may not be cancelled without prior notice to the enrollee.

Effective Date: Plan years beginning on or after six months after date of
enactment (September 2010).

Coverage of Preventive Care

For fully-insured group and self-insured group and individual health plans,, mandates coverage of specific preventive services with no cost sharing. The services that must be covered at minimum include:

• Evidence-based items or services with a rating of `A’ or `B’ in the current recommendations of the United States Preventive Services Task Force;
• Immunizations recommended by the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention with respect to the individual involved;
• For infants, children, and adolescents, evidence-informed preventive care and screenings provided for in the comprehensive guidelines supported by the Health Resources and Services Administration.
• For women, additional preventive care and screenings provided for in comprehensive guidelines supported by the Health Resources and Services Administration.
• For women, the recommendations issued by the United States Preventive Service Task Force regarding breast cancer screening, mammography, and prevention shall be considered the most current other than those issued in or around November 2009.

The Secretary may develop guidelines to permit a group health plan and a health insurance issuer offering group or individual health insurance coverage to utilize value-based insurance designs.

Effective Date: Plan years beginning on or after six months after date of enactment (September 2010) Grandfathered status applies.

Coverage of Emergency Services

For fully-insured group and individual health plans, and self-insured group health plans, mandates coverage of emergency services at in-network level regardless of provider.

Effective Date: Plan years beginning on or after six months after date of
enactment (September 2010). Grandfathered status applies

Designating a Primary Care Physician

For fully-insured group and individual health plans, and self-insured group health plans, allows enrollees to designate any in-network doctor their primary care physician (including OB/GYN and pediatrician), if the plan requires the designation of a primary care physician.

Effective Date: Plan years beginning on or after six months after date of enactment (September 2010). Grandfathered status applies

Coverage Appeals

For fully-insured group and individual health plans, and self-insured group health plans, requires plans to have coverage appeals process.

Effective Date: Plan years beginning on or after six months after date of enactment (September 2010). Grandfathered status applies.

Preexisting Condition Coverage for Children

All group and individual health plans, included self-insured plans, will have to cover preexisting conditions for children 19 and under for plan years beginning on or after six months after date of enactment.

Effective Date: Plan years beginning on or after six months after date of enactment (September 2010).

Small Group Wellness Program Grants

Creates grants for small employer-based wellness programs. Appropriates $200 million in funding from fiscal years 2011-2015.

Effective Date: Grants should become available during Fiscal Year 2011

Minimum Loss Ratios

Minimum loss ratio requirements will be established for insurers in all markets. The MLR is 85% for large group plans and 80% for individual and small group plans (100 and below). The calculation is independent of federal or state taxes and any payments as a result of the risk adjustment or reinsurance provisions. Carriers will have to issue a premium rebate to individuals for plans that fail to meet the minimum MLR requirements.

Effective Date: Regulatory process with DHHS
and NAIC begins in 2010, with the standards and any potential rebates to policy-holders being applied to the 2011 plan year.

Reporting on W-2s

Requires all employers to include on W-2s the aggregate cost of employer-sponsored health benefits for informational purposes only. If employee receives health insurance coverage under multiple plans, the employer must disclose the aggregate value of all such health coverage, but exclude all contributions to HSAs and Archer MSAs and salary reduction contributions to FSAs.

Effective Date: Benefits payable during taxable years beginning after December 31, 2011.

HSA Distribution Tax Increase

Increases the tax on distributions from a health savings account that are not used for qualified medical expenses to 20% (from 10%).

Effective Date: Distributions made after December 31, 2010.

FSA Limit

Limits FSA contributions for medical expenses to $2,500 per year and indexes the cap for inflation.

Effective Date: Taxable years beginning after December 31, 2012.

OTC Drug Exclusion from Account-Based Plans

Changes the definition of medical expense for purposes of employer-provided health coverage (including reimbursements under employer-sponsored health plans, HRAs, and Health FSAs, HSAs, and MSAs) to the definition for purposes of the itemized deduction for medical expenses. This means that account based plans cannot provide nontaxable reimbursements of over-the-counter medications unless the over-the-counter medications are prescribed by a doctor. Prescribed medicines, drugs, and insulin will still qualify for nontaxable reimbursements from those accounts.

Effective Date: Taxable years beginning after December 31, 2010.

Tax on Brand-Name Prescription Drug Manufacturers

Imposes a new annual nondeductible fee on pharmaceutical manufacturers and importers of branded prescription drugs (including certain biological products). The aggregate annual fees, based on market share, to be imposed on covered entities will be $4.8 billion, beginning in 2011.

Effective Date: Payable in 2011 with respect to sales in 2010.

Cafeteria Plan Safe Harbor for Small Employers

Small employers (generally those with 100 or fewer employees) will be allowed to adopt new “simple cafeteria plans.” In exchange for satisfying minimum participation and contribution requirements, these plans treated as meeting the nondiscrimination requirements that would otherwise apply to the cafeteria plan.

Effective Date: January 1,2011

CLASS Act

Creates a new public long-term care program and requires all employers to enroll employees, unless the employee elects to opt out.

Effective Date:January 1, 2011. However, regulations are not published and benefits have not been designed. The program will probably not be operational before 2013.

Business Tax Reporting (1099 Forms)

Expands obligation of persons engaged in a trade or business to report on payments of other fixed and determinable income or compensation. Extends reporting to include payments made to corporations other than corporations exempt from income tax under section 501(a). Also expands the kinds of payments subject to reporting to include reporting of the amount of gross proceeds paid in consideration for property or services.

Effective Date: January 1, 2012.

Federal Study on Large Group Plans

Mandates a federal study on the impact the market reforms in the bill will have on the large group market, particularly on whether or not they have encouraged groups to self-fund.

Effective Date: Within a year of enactment (March 2010).

Federal Study on Self-insured Plans

Mandates annual studies by the federal Department of Labor on self-insured plans using data collected from the Annual Return/Report of Employee Benefit Plan (Department of Labor Form 5500) begin. The studies will include general information on self-insured group health plans (including plan type, number of participants, benefits offered, funding arrangements, and benefit arrangements) as well as data from the financial filings of self-insured employers (including information on assets, liabilities, contributions, investments, and expenses).

Effective Date: Within a year of enactment (March 2010).

Non-Profit Hospitals

Non-profit hospitals must meet new requirements to satisfy tax exempt status.

Effective Date: Generally, the requirements apply to taxable years beginning after date of enactment, however, the community health needs assessment requirement applies to taxable years beginning two years after the date of enactment.

Summary of Benefits

Requires that all group health plans (including self-insured plans) and group and individual health insurers provide a summary of benefits and a coverage explanation to all applicants at the time of application, to all enrollees prior to the time of enrollment or reenrollment and to all policyholders or certificate holder at the time of issuance of the policy or delivery of the certificate. The summary must include specific information to be determined by the Secretary of DHHS in consultation with the National Association of Insurance Commissioners and can be provided in paper or electronic form. It must be no more than 4 pages in length with print no smaller than 12 point font written in a culturally linguistically appropriate manner.

If a group health plan or health insurance issuer makes any material modification in any of the terms of the plan or coverage involved that is not reflected in the most recently provided summary of benefits and coverage, the plan or issuer shall provide notice of such modification to enrollees not later than 60 days prior to the date on which such modification will become effective.

Employers and health plans that willfully fail to provide the information required can be fined up to $1,000 for each such failure. Each failure to provide information to an enrollee constitutes a separate offense.

Effective Date: DHHS/NAIC must develop the summary of benefits standards within one year of enactment (March 2011). Health Plans and employer groups must begin notifying enrollees within two years of enactment (March 2012).

Quality Information Reporting by Group Health Plans

Requires the Secretary of DHHS to develop quality reporting requirements for use by group health plan and group and individual health plans about their coverage benefits and health care provider reimbursement structures that improve health outcomes, prevent hospital readmissions, improve patient safety and reduce medical errors and implement wellness and health promotion activities.

All group health plans (including self-insured plans) and group and individual health insurance carriers must annually submit to the Secretary of DHHS and to plan enrollees during the annual open enrollment period a report on whether the benefits under the plan or coverage include the specified components. The Secretary of DHHS will make the reports available to the public through an Internet website and can develop and impose appropriate penalties on employer groups and health plans for noncompliance.

Effective Date: Within two years of enactment (March 2012).

Tax on Group Health Plans to Fund Comparative Effectiveness Research

New federal premium tax on fully-insured and self-insured group health plans to fund comparative effectiveness research program begins. As financing mechanism to fund Patient Centered Outcome Research, imposes a fee on private insurance plans equal to $2 annually for each individual covered under a specified individual or group health insurance policy.

Effective Date: First plan year ending after September 30, 2012 but does not apply to policy years ending after September 30, 2019.

Health Insurer Executive Compensation Limits

$500,000 deduction limitation on taxable year remuneration to officers, employees, directors, and service providers of covered health insurance providers.

Effective Date: Applies to current compensation paid during taxable years beginning on or after December 31, 2012, but will apply to deferred compensation earned in the taxable year beginning after December 31, 2009.

Tax on Medical Devices

New excise tax on medical device manufacturers equal to 2.3 percent of the price for which the medical device is sold. The tax will not apply to eyeglasses, contact lenses, hearing aids, and any other device deemed by the Secretary of DHHS to be of the type available for regular retail purposes.

Effective Date: January 1, 2013.

Medicare Payroll Tax Increase

Beginning in 2013, additional 0.9 percentage Medicare Hospital Insurance tax (HI tax) on self-employed individuals and employees with respect to earnings and wages received during the year above $200,000 for individuals and above $250,000 for joint filers (not indexed). Does not change employer HI tax obligations. Self-employed individuals are not permitted to deduct any portion of the additional tax. In addition, there will be a new 3.8% Medicare contribution tax on certain unearned income from individuals with AGI over $200,000 ($250,000 for joint filers).

Effective Date: January 1, 2013

Medical Expense Tax Deduction Limitation

The threshold for the itemized deduction for unreimbursed medical expenses would be increased from 7.5% of AGI to 10% of AGI for regular tax purposes. The increase would be waived for individuals age 65 and older for tax years 2013 through 2016 (Effective January 1, 2013).

Effective Date: January 1, 2013

Employer Notice Requirement

Requires all employers provide notice to their employees informing them of the existence of an Exchange.

Effective Date: March 1, 2013

Preexisting Conditions

Coverage must be offered on a guarantee issue basis in all markets and be guaranteed renewable. Exclusions based on preexisting conditions would be prohibited in all markets, including self-insured plans.

Effective Date: Plan years beginning on or after January 1, 2014 but, for enrollees under age 19, preexisting conditions are prohibited beginning plan years beginning on or after six months after date of enactment. Grandfathered status applies for group health plans.

Tax on Private Health Insurance Premiums

Imposes annual taxes on private health insurers based on net premiums written after December 31, 2012? and third-party agreement fees received after December 31, 2012? The tax is phased in at. The fees would start at $8 billion in 2014, rise to $11.3 billion in 2015 and 2016, $13.9 billion in 2017, and $14.3 billion in 2018. After 2018 the fee would be indexed to the annual amount of premium growth in subsequent years.

Does NOT apply to self-insured plans and governmental entities (other than those providing insurance through the Act’s community health insurance option). The bill’s insurer tax provisions would also exempt: (1) nonprofit insurers that receive over 80 percent of their gross revenues from government programs like Medicare, Medicaid, and CHIP; and (2) voluntary employee benefit associations that are established by non-employers.

Effective Date: January 1, 2014 based on net premiums written after December 31, 2012 and third-party agreement fees received after December 31, 2012.

Modified Community Rating Requirements

All individual health insurance policies and all fully insured group policies 100 lives and under (and larger groups purchasing coverage through the exchanges) must abide by strict modified community rating standards with premium variations only allowed for age (3:1), tobacco use (1.5:1), family composition and geographic regions to be defined by the states and experience rating would be prohibited. Wellness discounts are allowed for group plans under specific circumstances.

Effective Date: Plan years beginning on or after January 1, 2014

Group Size

Redefines small group coverage as 1-100 employees. States may also elect to reduce this number to 50 for plan years prior to January 1, 2016.

Effective Date: January 1, 2014

State-Based Exchanges

Requires each state to create an Exchange to facilitate the sale of qualified benefit plans to individuals, including the federally administered multi-state plans and non-profit co-operative plans. A catastrophic-only policy would be available for those 30 and younger. In addition the states must create “SHOP Exchanges” to help small employers purchase such coverage. Coverage in the Exchange will only be offered on a pre-tax basis if it is purchased through an employer. The state can either create one exchange to serve both the individual and group market or they can create a separate individual market exchange and group SHOP exchange. States can also apply for a modification waiver from DHHS.

Effective Date: January 1, 2014.

Employee Free Choice Requirements

An employer that provides and contributes to health coverage for employees must provide free choice vouchers to each employee who is required to contribute between 8% and 9.8% of the employee’s household income toward the cost of coverage, if such employee’s household income is less than 400% of FPL and the employee does not enroll in a health plan sponsored by the employer. Eight percent and 9.8% are to be indexed to the rate of premium growth. The value of vouchers would be adjusted for age, and the vouchers would be used in the exchanges to purchase coverage that would otherwise be unsubsidized. The employee can also keep amounts of the voucher in excess of the cost of coverage elected in an exchange without being taxed on the excess amount. The amount of the voucher must be equal to the amount the employer would have provided toward such employee’s coverage (individual vs. family based on the coverage the employee elects through the exchange) with respect to the plan to which the employer pays the largest portion of the cost.

Effective Date: January 1, 2014.

Essential Benefits

Establishes standards for qualified coverage, including mandated benefits, cost-sharing requirements, out-of-pocket limits and a minimum actuarial value of 60%. Allows catastrophic-only policies for those 30 and younger. Employer-sponsored plans offered outside of the exchange do not have to provide essential benefits coverage.

Effective Date: Plan years beginning on or after January 1, 2014.

Tax Credits for Lower Income Individuals

Creates sliding-scale premium assistance tax credits for non-Medicaid eligible individuals with incomes up to 400% of FPL to buy coverage through the exchange. Beginning in 2019, a failsafe mechanism would be applied that reduces overall premium subsidies if the aggregate amount exceeds 0.504 percent of GDP.

Effective Date: January 1, 2014

Medicaid Expansion

Medicaid eligibility level is increased to 133% FPL. The federal government will pay 100% of the cost of the new expansion population until 2016. Starting in 2017, all states except for the expansion states (including Nebraska), would then have to begin to have to pay a phased in amount of the cost of covering the expansion population, so that the federal government’s match would be 90% in 2020 and the out-years.

For expansion states (where the state is already covering these adults through their Medicaid programs), it would reduce the amount they are currently paying to cover this population by 50% in 2014 and gradually increase the amount of the federal share, so that by 2019, all states would be paying the same amount for the non-pregnant adult Medicaid population.

Effective Date: January 1, 2014.

Premium Assistance for Employer-Sponsored Coverage

Requires states to offer premium assistance and Medicaid wrap-around benefits to Medicaid beneficiaries who are offered employer-sponsored coverage if cost-effective to do so, under terms outlined already in current law.

Effective Date: January 1, 2014.

State-Level Subsidy Programs

Gives states the option of establishing a federally-funded non-Medicaid state plan for people between 133-200% FPL who do not have access to affordable employer-sponsored coverage and would otherwise be eligible for subsidized coverage through a state-based exchange. The funding for this program will come from the subsidy dollars.

Effective Date: January 1, 2014.

Employer Mandate

An employer does not have to offer coverage, but if they do not offer qualified coverage and employ more than 50 full-time equivalent employees (with an exception for seasonal workers) and one or more employees receives a premium assistance tax credit to buy coverage through an exchange, the employer must pay a fine of $2000 per year times the number of full time equivalent employees. When determining whether an employer has 50 employees, part-time employees must be taken into consideration in the number of full-time equivalent employees based on aggregate number of hours of service.

An employer with more than 50 employees that does offer coverage but has at least one full-time employee receiving the premium assistance tax credit will pay the lesser of $3,000 for each of those employees receiving a tax credit or $2000 for each of their full-time employees total.

An individual with family income up to 400% of FPL is eligible for a premium assistance tax credit if the actuarial value of the employer’s coverage is less than 60% or the employer requires the employee to contribute more than 9.5% of the employee’s family income toward the cost of coverage.

Effective Date: January 1, 2014.

Employer Waiting Period for Coverage

Waiting periods in excess of 90 days are prohibited for all plans, including grandfathered plans.

Effective Date: January 1, 2014.

Auto-Enrollment by Employers

Requires employers of 200 or more employees to auto-enroll all new employees into any available employer-sponsored health insurance plan. Waiting periods in existing law can apply. Employees may opt out if they have another source of coverage.

Effective Date is unclear

Individual Mandate

Requires all American citizens and legal residents to purchase qualified health insurance coverage. Exceptions are provided for religious objectors, individuals not lawfully present and incarcerated, those who cannot afford coverage, taxpayers with income under 100 percent of poverty, members of Indian tribes, those who have received a hardship waiver, those with incomes below the federal income tax filing threshold and those who were not covered for a period of less than three months during the year.

The penalty structure for noncompliance will be an excise tax of either a flat dollar amount per person or a percentage of the individual’s income, whichever is higher. In 2014 the percentage of income determining the fine amount will be 1%, then 2% in 2015, with the maximum fine of 2.5% of taxable (gross) household income capped at the average bronze-level insurance premium (60% actuarial) rate for the person’s family beginning in 2016. The alternative will be a fixed dollar amount that phases in beginning with $325 per person in 2015 to $695 in 2016.

Effective Date: January 1, 2014.

Coverage Documentation

Health plans, including self-insured employer plans and public programs, must also provide coverage documentation to both covered individuals and the IRS.

Effective Date: January 1, 2014

Employer Wellness Plans

Codifies and improves upon the HIPAA bona fide wellness program rules and increases the value of workplace wellness incentives to 30% of premiums with agency discretion to increase the cap on incentives to 50%.

Effective Date: Plan years beginning on or after January 1, 2014.

Wellness Plans for the Individual Market

Establishes a 10-state pilot program to apply the rules to HIPAA bona fide wellness program rules the individual market in 2014-2017 with potential expansion to all states after July 1, 2017. It also calls for a new federal study on wellness program effectiveness and cost savings.

Effective Date: No later than July 1, 2014

CHIP

Children’s Health Insurance Program was extended through September 30, 2015, but then must be reauthorized.

Effective Date: Must be reauthorized by October 1, 2015.

State-Opt Out Provisions

Allows states to apply for a waiver for up to 5 years of requirements relating to qualified health plans, exchanges, cost-sharing reductions, tax credits, the individual responsibility requirement, and shared responsibility for employers, provided that they create their own programs meeting specified standards.

Effective Date: Plan years beginning on or after January 1, 2017.

Large Groups in the Exchanges

States may choose to allow large groups (over 100) to purchase coverage through the exchanges.

Effective Date: January 1, 2017

Cadillac Tax

The 40% excise tax on employer-sponsored health plans with aggregate values that exceed $10,200 for individual coverage and $27,500 for family coverage with higher thresholds for retirees over age 55 and employees in certain high risk professions/ Transition relief would be provided for 17 identified high-cost states. The tax would be indexed annually for inflation based on the consumer price index, but would also allow plans to take into account age, gender and other factors that impact premium costs. Value of health plans would include reimbursements from FSAs, HRAs and employer contributions to HSAs, as well as other supplementary health insurance coverage. Stand-alone dental and vision plans would be excluded from the calculation, The excise tax will not apply to accident, disability, long-term care and after-tax indemnity or specified disease coverage.

Effective Date: Taxable years beginning after December 31, 2017.

PLEASE NOTE: The information presented in this analysis is the exclusive property of the National Association of Health Underwriters (NAHU). It was prepared as an informational resource for NAHU members, state and federal policymakers and other interested parties. It is not to be duplicated, copied, or taken out of context. Any omission or inclusion of incorrect data is unintentional. If you have any questions about the information presented in this document, please contact Jessica Waltman, Senior Vice President of Government Affairs at 703-276-3817 or jwaltman@nahu.org.