In 2010 several of the provisions of ACA went into effect. The 2010 provision that most affected employers was the Small Employer Tax Credit which became effective on January 1 of that year. This credit helps small businesses and small tax-exempt organizations afford the cost of covering their employees and is specifically targeted for those with low- and moderate-income workers. The credit is designed to encourage small employers to offer health insurance coverage for the first time or maintain coverage they already have. In general, the credit is available to small employers that have fewer than 25 full-time equivalent employees. Those employees must have average wages of less than $50,000 a year and the employer must pay at least half the cost of single coverage for their employees. The tax credit is up to 35% for small businesses and up to 25% for tax-exempt organizations and in 2014, the credit will increase to up to 50% for small businesses and up to 35% for tax-exempt organizations. More information on these tax credits is available at: www.IRS.gov.
The following provisions also became effective during 2010:
– Prohibitions on pre-existing condition limitations for children under 19 years of age
– Lifetime limits prohibited
– Annual limits restricted
– Cancelling coverage retroactively (rescissions) prohibited
– Generally, adult children up to the age of 26 must be covered as dependents on parent’s plan
– Coverage, but no cost-sharing on preventive care
– Choice of PCPs/pediatricians required
– Access to OBGYNs without referrals required
– Medicare recipients in the “donut hole” received $250 rebate checks from Medicare
– New internal and external review standards
– 30-day enrollment and patient protection notices required
– Transparency disclosures required for plans
In 2011, a few more provisions went into effect. These included the government offering small employer wellness grants to employers and Flexible Spending Arrangements were limited in that participants had to now obtain a prescription for over the counter drugs to be reimbursable. Also, if an enrollee reached the Medicare “donut hole”, they were given a 50% discount on the total cost of the brand name drugs while in the gap.
2012 will see employers issuing to their employees new Summaries of Benefits and Coverage and a Uniform Glossary so that employees will have an easier time comparing the terms of each plan available to them. There will also be a requirement that employers give 60-days advanced notice of any benefit changes to the employees. August 1st of 2012 also brought Medical Loss Rebates issued by insurers to participants and employers for certain plans that did not meet the threshold of less than a specified percentage of the premium dollars collected used to provide medical care.