2014 is a watershed year for healthcare reform. A number of key provisions – most importantly, the individual mandate and employer penalties – become effective. The majority of American business owners and human resources professionals are overwhelmed by these changes and uncertain what the best approach should be to continue to attract and retain employees, while watching their bottom line.
We advise our current and prospective clients to plan now for 2014. We are collaborating with our clients and proposing winning strategies to navigate through the end of this year and seamlessly transition into 2014.
In 2010, Congress passed and President Obama signed the Patient Protection Affordable Care Act (PPACA). Since then, confusion has reigned regarding which mandates are merely proposed, effective, repealed, or delayed.
The purpose of reform was to expand health coverage within our healthcare system while saving money long-term. Preventive care is one focal point to identify patients at risk, and treat chronic illnesses in early stages – allowing treatments to be less expensive and create healthier communities. Electronic health records and Accountable Care Organizations (ACOs) are set to roll out within the coming years. One of the major goals of healthcare reform is to extend affordable healthcare coverage to more Americans. An additional 30 million uninsured citizens are expected to have health insurance next year through the expanded Medicaid program, and state-based health insurance exchanges.
Already in Effect
- Coverage for children up to age 26
- No pre-existing conditions for children under age 19
- No lifetime caps
- Prohibit annual caps for “essential health benefits” (phased in)
- Medical Loss Ratios
- No cost sharing for preventive health care (Non-grandfathered plans only)
- FSA Maximum of $2,500
Delayed or Eliminated
- Internal Revenue Code section 105(h) nondiscrimination rules apply to healthcare plans (delayed indefinitely)
- Reporting cost of healthcare plans on employee W-2s (250+ currently must report, < 250 not mandatory yet)
- CLASS long-term care program (administratively eliminated)
- “Free Choice” Vouchers (Repealed)
Effective in the future
- State-based insurance exchanges (2014)
- Employer penalties (2014)
- No pre-existing conditions for anyone (2014)
- Waiting periods may not exceed 90 days (2014)
- Increased wellness plan incentives permitted (2014)
- “Bronze” coverage new minimum (2014)
- Automatic enrollment for employers with over 200 employees (when regulations are issued)
- “Cadillac” Plan excise tax (2018)
- Health Insurance Premium Tax (2014)
Understanding Employer Penalties