Health Care Reform Legislation Signed Into Law - Patient Protection & Affordable Care Act (H.R. 3590) and the Health Care and Education Affordability Reconciliation Act of 2010 (H.R. 4872)

On March 23, 2010, President Barack Obama signed the Patient Protection & Affordable Care Act (H.R. 3590) and the Health Care and Education Affordability Reconciliation Act of 2010 (H.R. 4872) into law. This combined legislation significantly reforms health care, and will have an eventual impact on certain employers. (A summary of the legislation is available here.)Although the extent of the laws' impact on employers is unknown at this time (and at least 14 states have already filed federal legal challenges attacking the 2,400-page legislation’s constitutionality), MBA will continue to provide you with important updates regarding the steps you must take to ensure you are in compliance.

Please note that the majority of the reforms affecting employers do not become effective until 2014; however, certain important provisions take effect immediately, including providing tax credits in 2010 to qualified small businesses, prohibiting insurance companies from placing annual and lifetime limits on health insurance coverage, requiring certain health insurance plans to provide coverage for dependent children up to age 26, and banning pre-existing condition exclusions for children. In 2014, the key provisions affecting employers become effective. These include, but are not limited to, requiring U.S. citizens and legal residents to maintain qualifying health insurance, requiring large businesses who already offer health insurance to automatically enroll employees (employees will have the ability to opt out and purchase less expensive insurance on the open market), and subjecting certain businesses to fines for not providing employees with insurance coverage.

For a timeline of the legislation, please click here, or review the following summary of key provisions recently published by the Washington Post newspaper:

• Within a year: provides a $250 rebate to Medicare prescription drug plan beneficiaries whose initial benefits run out.
• 90 days after enactment: provides immediate access to high-risk pools for people who have no insurance because of preexisting conditions.
• 6 months after enactment: bars insurers from denying people coverage when they get sick; bars insurers from denying coverage to children who have preexisting conditions; bars insurers from imposing lifetime caps on coverage; and requires insurers to allow young people to stay on their parents’ policies until age 26.
• In 2011: requires individual and small group market insurance plans to spend 80 percent of premium dollars on medical services. Large group plans would have to spend at least 85 percent.
• In 2013: increases the Medicare payroll tax and expands it to dividend, interest and other unearned income for singles earning more than $200,000 and joint filers making more than $250,000.
• In 2014: provides subsidies for families earning up to 400 percent of the poverty level—or under current guidelines, about $88,000 a year—to purchase health insurance; requires most employers to provide coverage or face penalties; and requires most people to obtain coverage or face penalties.
• In 2018: imposes a 40 percent excise tax on high-end insurance policies.
• By 2019: expands health insurance coverage to 32 million people.

As stated above, MBA will continue to provide you with important updates regarding employer obligations under these new laws. In the meantime, if you have any questions, please contact an MBA Human Resources Manager at 1.888.622.6460.