On March 23, 2010, President Obama signed the Patient Protection and Affordable Care Act into law. There are many different names for this law: PPACA, the Affordable Care Act, ACA Healthcare Reform and Obama Care are a few examples.
The PPACA applies to the majority of employer-sponsored health plans. However, there are few exceptions to this rule, such as retiree coverage and certain stand alone “Excepted Benefit” plans. The distinction between whether a plan is ERISA or non-ERISA does not apply here, the PPACA applies to both ERISA and non-ERISA plans.
Below is a brief overview of some of the changes Healthcare Reform brought.
1. Benefit Mandates - The PPACA imposes a number of requirements on group health plans regardless of whether or not a plan is deemed a grandfathered or non-grandfathered health plan. Some of the PPACA requirements include: Clinical Trial Requirements; Coverage of Dependent Children to Age 26; In-Network Out-of-Pocket Maximums; Internal and External Appeal Requirements; Patient Protections; Pre-Existing Conditions Prohibited; Preventive Services Mandate; Prohibition on Annual and Lifetime Dollar Limits on Essential Health benefits; Rescission of Coverage; and Waiting Periods Cannot Exceed 90 Days.
2. Essential Health Benefits - There are ten broad categories of essential health benefits identified under the PPACA. A self-funded health plan, regardless of grandfather status and group size, is not required to offer any essential health benefits. The only plans that are required to cover all 10 categories of EHBs or risk non-compliance are policies issued in the small group and individual insurance markets.
3. Employer Mandate - Under the PPACA, the employer “shared responsibility” excise tax was added to the Internal Revenue Code. Employers with 50 or more full-time or full-time equivalent employees (FTEs) are required to offer coverage that is affordable and meets minimum value to 95 percent of full-time employees and their dependents starting with their first plan year on or after January 1, 2016 to avoid potential tax penalties.
4. Individual Mandate - As of 2014, most taxpaying individuals are required to maintain a minimum level of healthcare coverage or potentially pay a penalty for failure to doing so under the PPACA. Individuals will be required to maintain minimum essential coverage for themselves and their dependents. Some individuals will be exempt from the mandate or the penalty, while others may be given financial assistance to help them pay for the cost of health insurance.
5. Grandfathering - Health plans in existence on March 23, 2010 had the option to “grandfather” their health plan if certain criteria were met. The PPACA imposes a number of requirements on group health plans. Some reform requirements do not apply to grandfathered plans as long as that status is maintained.
6. Summary of Benefits & Coverage (SBC) - Group health plans are required to distribute an accurate summary of benefits and explanation of coverage document to plan participants and beneficiaries. The purpose of an SBC is to give people straightforward information about the health plan, to help them more easily compare plans and make appropriate enrollment and coverage decisions. There are specific regulations surrounding the content and layout of SBCs.
7. Taxes & Fees - Various taxes, fees and reporting requirements were added under healthcare reform including: Tax on Higher Income Individuals; W-2 Informational Reporting Requirements; Patient-Centered Outcomes Research Institute (PCORI) fee; and the Cadillac Tax.
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This content is being provided as an informational tool. It is believed to be accurate at the time of posting and is subject to change. It is recommended that plans consult with their own experts or counsel to review all applicable federal and state legal requirements that may apply to their group health plan. By providing this information, Meritain Health is not exercising discretionary authority or assuming a plan fiduciary role, nor is Meritain Health providing legal advice.