HEALTHCARE REFORM UPDATE

On March 23, 2010, the President signed into law the most sweeping piece of federal legislation since Medicare was passed in 1965. While the legislation is considered to have broad implications regarding healthcare in the U.S., the bulk of the legislation will not take effect until January 1, 2014. While the law is more than 2000 pages in length, the regulations that spell out the details are still to be written and therefore many questions will remain. Below is a summary of a few important areas that will be impacted by this legislation:

• Health coverage will be extended to approximately 32 million Americans that are currently without insurance. Additionally, almost every American will be required to carry health insurance. Further, Medicaid, the federal-state health program for the poor will be expanded and give subsidies to families making as much as $88,000 a year. Beginning in 2014, when the tax credits and Medicaid expansion are in place, those who do not obtain health insurance will pay a fee, topping out at either $695 for each uninsured to a maximum of $2,085 per family per year; or 2.5% of household income. .
• Many employers would have to provide affordable insurance or pay a penalty of up to $2,000 per employee. Healthcare purchasing exchanges will be established at the state level for individuals and small businesses that wish to use them.                        .
• There are provisions of the law that will take affect almost immediately and result in changes to current insurance-company practices including:                                       .
  • Coverage to children with pre-existing conditions cannot be denied which is not a change in New York State.                                                                         .
  • Dependent children under the age of 26 can remain on their parents' policies if they cannot get health insurance elsewhere.

As your partner, Alcott is much more than just an interested party. We are studying the requirements and will not only inform you of the changes that will take place but offer advice and the approach that seems the best for all of us. Our goal has been and will continue to be to offer comprehensive benefits at an affordable cost. It remains to be seen if this new law will provide the relief that makes health insurance coverage more affordable.

We are committed to keeping you informed of the developments and future implications for you, your business and your employees. You can expect to see additional communications from us as details on the legislation become available.

Alcott will continue to follow the healthcare reform developments and communicate with you as it moves forwar