Healthcare Reform: Look Back and Look Forward

Like a river meandering through the countryside, healthcare reform has been full of twists and turns. This article takes a look at what has been implemented so far as well as future mandates and reforms.

2010 – Reform Passes Causing Immediate Changes
In 2010, the new healthcare reform laws were passed; and with them, some abrupt changes took place. The impact was felt by some, but subtle to others. Here is a list of the numerous requirements:

• Restrictions on annual limits on essential health benefits
• Prohibition of lifetime limits on essential health benefits
• Inclusion of preventative health services
• Dependent coverage for children until age 26
• Tax-free coverage to children through the end of the year in which they turn 26
• No pre-existing condition exclusion for those under age 19
• Prohibition against rescission of coverage
• Special patient protections on provider networks such as the ability to choose any primary care doctor and coverage for emergency services
• New insurance claim appeals process and external review requirements
• Non-discrimination rules for insured plans, health programs and activities
• Additional protections for whistle-blowers
• An early retiree reinsurance program
• Temporary high-risk pool insurance
• Small business healthcare tax credit
• A quality of care reporting requirement for insurance carriers
• Transparency in coverage reporting and cost-sharing disclosures 

2011 – Changes to Consumer-Driven Healthcare Plans
The changes implemented in 2011 related mostly to Consumer Driven Healthcare Plans, but there were a couple of changes for insurance carriers too.

• Increased penalty tax for non-qualified HSA and MSA withdrawals from 10% to 20%
• Over the counter medications without a prescription no longer eligible for reimbursement in consumer driven health plans
• Implementation of simple cafeteria plans
• Establishment of minimum medical loss ratios
• Increase scrutiny of Health Insurance rate increases

2012 – A Few Employer Changes
2012 brought forth changes with a direct impact on employers. The changes required further reporting and dissemination of information. 

• Establishment of Patient Centered Outcomes Research fees (PCORi)
• Requirement of the dissemination of Summary of Benefits and Coverage statements
• W-2 reporting of employer-sponsored health coverage costs

2013 – Impactful Consumer Changes
There are a few more light changes in 2013, but the impact for consumers is pronounced.

• $2,500 cap on healthcare FSA contributions
• Deductions allowed for medical expenses exceeding 7.5% of Adjusted Gross Income raised to 10%
• Employer requirement to provide Notice of Exchange
• New HIPAA electronic transactions and operating rules

2014 – Sweeping Employer Changes!
The real teeth of healthcare reform comes in 2014. These sweeping changes will forever alter the healthcare market as we know it. Some of these changes have been highly publicized, but some could be easily overlooked. It is imperative for employers to have a firm understanding of the new requirements.

• Establishment of state and/or federal Health Insurance Marketplaces (formerly called Health Insurance Exchange)
• Prohibition of annual limits on essential health benefits
• Maximum deductible limits of $2,000 for single coverage and $4,000 for family coverage (currently only applies to small group plans, but this will likely expand to all health plans)
• Out of pocket maximum limits of $6,250 for single coverage and $12,500 for family coverage (applies to ALL health plans and is annually indexed)
• Prohibition on preexisting coverage exclusions for all ages
• Automatic enrollment requirement (once further guidance issued)
• Required coverage for individuals participating in clinical trials
• No waiting periods longer than 90 days
• Guaranteed availability and renewability of coverage
• Nondiscrimination against healthcare providers and health status
• Employer reporting of Health Insurance coverage to IRS
• Annual fee on health insurers ($8 billion in 2014)
• Reinsurance fees charged to health insurers and employers who self-insure (approximately $64 per member, 2014 - 2016)
• Pay or play employer penalties ($2,000 for all full-time employees minus the first 30 employees for not offering insurance, $3,000 per employee who obtains exchange subsidy for unaffordable insurance)
• Pay or play individual penalty (greater of $95 or 1% of income in 2014. Increases in subsequent years) 

2015-2017 Reprieve
Between 2015 and 2017, there will be a stay of new regulations.

2018 - “Cadillac tax”
In 2018, an excise tax will be applied to high cost health coverage.

Click to Download a copy of the Healthcare Reform Timeline.