March 23 marked the one year anniversary of the Patient Protection and Affordable Care Act (PPACA), jointly referred to as the Affordable Care Act (ACA). The provisions of the ACA have either started to take effect, or will come into effect in the upcoming years. The changes we have encountered since President Obama signed the ACA last year are listed below:
- Nondiscrimination testing
- Coverage rescissions
- Ban on lifetime limits and restrictions on annual limits
- Tax credits to small employers
- Dependent coverage up to age 26
As stated earlier, provisions of the ACA will go in effect in the upcoming years, but now let’s discuss what provisions are now effective as of March 23, 2011. There will be grants available for small business now. Employers with less than 100 employees are now eligible to provide detailed workplace programs. The ACA authorized $200 million to fund the account for the years of 2011-2015. Next, there will be a requirement to provide value for premium payments. What this means is that beginning no later than January 1, 2011 insurers and plans for the individual and small group segments must maintain a medical loss ratio (MLR) of 80% and large group markets must maintain a MLR of 85%. Another big issue upcoming will be the exclusion of the costs for over-the-counter drugs for reimbursement from HRAs, FSAs and MSAs. This is effective as of taxable years beginning after December 31, 2010. The costs of over-the-counter drugs not prescribed by a doctor will no longer be able to be reimbursed through health flexible spending accounts (FSA), Archer medical savings accounts (MSA), health reimbursement accounts (HRA), or be reimbursed through a tax-free basis through a health savings account (HAS). Another big change is the fact that health coverage costs must be explained thoroughly for all W-2 forms. Employers are now required to report on the W-2 the total cost of group health coverage, including the portion paid by the employee and the portion paid by the employer. These are just a few of the changes for the upcoming year. For a complete list of all the changes, please visit the link to HR.BLR.com’s Healthcare Reform: A Resource Center for Employers. These are very important issues the effect us all, we truly hope you familiarize yourself with these changes. Photo credit: barky
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