Health Care Reform

5/7/2010

These are the changes coming to Health Care as of today; changes may be made at a later date.  We will keep you updated as we receive new information.

Within this year

Health Reform 2010

Children will be able to stay on their parent's policy until their 27th birthday.

$250 rebate for Seniors to help fill in the doughnut hole for the Part D drug plans.

Children with pre-existing conditions will no longer have exclusions riders/waivers on those conditions.  Pools will cover those with pre-existing health conditions until health care changes are up and running.

When a person becomes ill Insurance companies will not be able to rescind policies to avoid paying medical bills.

Annual limits and lifetime limits on benefits will be prohibited.

New plans will provide preventive services without co-pays and all plans will have this by 2018.

For companies that provide early retiree health benefits for those ages 55 to 64 a temporary reinsurance program will be set up to offset costs of coverage.

Indoor tanning services will have a 10% tax on or after July 1.

Adoption tax credit will go up by $1000.

Employers with 50 or fewer employees will receive 35% tax credits on their health care premiums.

2011

Free annual wellness check ups and personalized prevention plans will be provided by Medicare.  New plans will cover these visits with no co-pay.

States will be able to offer home and community based services to the disabled through Medicaid instead of institutional care beginning October 1.

A 50% discount on Brand name drugs for Medicare Part D and Medicare Advantage enrollees will be provided.  Additional discounts on brand name and generic drugs will be phased in to completely close the “doughnut hole” by 2020.

Tax on non qualified medical expense withdrawals from Health Savings accounts will increase from 10% to 20% for those withdrawals made before age 65.  Archer medical savings account withdrawals not used for qualified medical expenses will increase from 15% to 20%.

A plan to provide a vehicle for small businesses to offer tax-free benefits will be created.  This will ease the small employer’s administrative burden of sponsoring a cafeteria plan.

Medicare payroll tax will increase from 1.45% to 2.35% for individuals earning more than $200,000 and married filing jointly above $250,000.

2013

A 2.9 % excise tax on the first sale of medical devices will be created.   Exceptions are contact lenses, eye glasses, hearing aids or other items for individual use.

For those earning more than $200,000 ($250,000 for married), this included net investment income, hospital insurance taxes will increase 0.9 %.

Contributions to flexible savings accounts will be limited to $2500 per year, indexed by the Consumer Price Index in future years.

The Employer Medicare Part D subsidy deduction will be eliminated.  Employers will lose the tax deduction for subsidizing prescription drug plans for Medicare Part D eligible retirees.

There will be increases to the income threshold from 7.5% to 10% of adjusted gross income.  Those older than 65 can claim the 7.5% deduction through 2016.

2014

Citizens will be required to have acceptable coverage or pay a penalty of $95 in 2014, $325 in 2015, $695(or up to 2.5% of income) in 2016.  Families will pay half the amount for children, up to a cap of $2250 per family. After 2016, penalties are indexed to the Consumer Price Index.

Health plans will have no annual limits on coverage.

Insurers must sell or renew policies regardless of an individual’s health status.  Health plans can no longer exclude coverage for pre-existing conditions.  Insurers can not charge higher rates because of health status, gender, or other factors.

Companies with 50 or more employees must offer coverage to employees or pay a $200 penalty per employee after their first 30 if at least one of their employees receives a tax credit.  Waiting periods are limited to 90 days.  Employers who offer coverage but whose employees receive tax credits will pay $3000 for each worker receiving a tax credit.

Workers who are exempt from individual responsibility for coverage but don’t qualify for tax credits can take their employer contribution and join an exchange plan.

Health Insurance Exchanges will open in each state to individuals and small employers to comparison shop for standardized health packages.

Credits will be available through exchanges for those whose income is above Medicaid eligibility and below 400 percent of poverty level who are not eligible for or offered other acceptable coverage.

Medicaid eligibility will increase to 133 % of poverty level for all non-elderly individuals to ensure that people obtain affordable health care. States will receive increased Federal funding to cover these new people.

2018

Taxing “Cadillac” plans

An excise tax will be imposed on high-cost employer provided health plans beyond $27,500 for family coverage and $10,200 for single coverage; it will increase to $30,950 for families and $11,850 for individuals, retirees and employees in high-risk professions.