While many elements the federal health reform laws kick in down the road, some have immediate implications for businesses and trade groups, which were scrambling to understand the ramifications.
The new law includes a “play-or-pay” requirement beginning in 2014, under which employers with more than 50 workers must offer them health insurance or pay a $2,000 penalty if at least one of those workers gets coverage under a subsidized health insurance exchange.
The Connecticut Business & Industry Association has scheduled an April 15 seminar in Farmington on what health reform means for Connecticut employers and workers; the Connecticut Health Policy Project did so two weeks earlier featuring U.S. Rep. Joe Courtney, who represents eastern Connecticut.
After posting an initial take on the impact of health reform on his “Open Mike” blog ”“ critical of what he sees as the bill”™s long-term costs ”“ former Pitney Bowes Inc. CEO Michael Critelli sparked several responses, including one from U.S. Rep. Chris Murphy who represents the Danbury area.
“Over 500 pages of the bill (Title III of the bill) are dedicated to changing the way that Medicare reimburses health care providers for the provision of medical services,” Murphy stated. “Among the reforms are a revolutionary new system of reimbursing hospitals and doctors based on the quality of outcomes instead of the number of procedures ”¦ No one can say this bill doesn”™t do enough to change the way we pay for medicine. Twenty percent of the bill”™s text is devoted to this cause.”
Critelli is sticking to his guns.
“My experience with a wide range of political issues is that, when millions of jobs are affected ”¦ the parts of this legislation that pay more for certain activities have a far better chance of happening than the parts that would result in reduced payments,” Critelli wrote. “I (find) it hard to conceive how even a leader with tremendous political capital will make some of the decisions we now have to make if this legislation is not going to create a long-term financial crunch.”
Like many, the law firm of Robinson & Cole L.L.P., which maintains a Stamford office, published a cheat sheet of what employers need to know as they work to minimize any financial crunch caused by their health plans going forward.
Beginning this year, employers with up to 25 employees are eligible for a tax credit for employer-provided health coverage, if those workers receive less than $50,000 in wages on average. Through 2013, the tax credit amounts to up to 35 percent of the employers”™ contributions, if they contribute at least half of the premium; certain small nonprofits can take a tax credit for 25 percent of their contributions.
Courtney said the tax credits would result in a small blue-collar business receiving nearly $25,000 in tax credits this year on a payroll of $250,000, assuming health care costs of $70,000.
Group health plan years beginning Sept. 23 this year:
- may not impose any preexisting condition exclusions for children age 18 or younger, with the prohibition extending to adults in 2014;
- must allow children of covered employees to continue to be covered as dependents up to age 26, including those that have spouses (dependent coverage is not taxable to the employee or the dependent);
- may not place lifetime dollar limits on medical claims;
- may not place unreasonable annual dollar limits on claims, with any annual limit generally barred in 2014;
- may not rescind health coverage once an individual is covered under the plan, unless the individual acts fraudulently;
- must cover certain preventive services and immunizations without cost to the employee; and
- may not discriminate against full-time employees based on their salary levels, except that lower wage employees may be required to pay a lower level of premiums.
As of June 23 and extending through the end of 2013, employers get access to a temporary reinsurance program that reimburses them for 80 percent of the cost of retiree health benefits between $15,000 and $90,000 provided to retirees between the ages of 55 and 64. That money can only be used to reduce the costs of their retiree health programs.
In 2011, expenses for over-the-counter medications are no longer eligible for tax-free reimbursement from flexible spending accounts, health savings accounts, and health reimbursement arrangements, save in the case of insulin.
In 2011, the additional tax increases to 20 percent for any withdrawals prior to age 65 from a health savings account or an Archer medical savings account, if used for purposes other than qualified medical expenses.
Also that year, employers must disclose the value of the benefit they provide to each employee”™s health insurance coverage on employees”™ annual Internal Revenue Service Form W-2.
In 2013, flexible spending account contributions are limited to $2,500 per year, indexed for inflation in future years.
