Information About the Patient Protection and Affordable Care Act

On March 23, 2010, President Obama signed into law the “Patient Protection and Affordable Care Act” (P.L. 111-148) (“PPACA), otherwise known as Health Care Reform.

The focal point of Health Care Reform is the requirement that, with limited exceptions, all individuals must be covered by an employer provided health plan or individual health insurance policies by January 1, 2014. States will be required to set up insurance exchanges by 2014 that will help individuals find policies. Individuals will receive insurance subsidies to help pay for the premium. The cutoff level for aid would be four times the federal poverty limit. For one person, that is approximately $44,000 a year. For a family of four, the figure would be $88,000 a year. The subsidies would be figured on a sliding scale with people near the bottom getting a bigger boost than the people near the top.

Since 2014 is over three years away does that mean employer groups do not have to concern themselves with health care reform? The answer is no. Many changes have already started to be implemented. These changes will have an impact from a cost and administrative standpoint. Over the next few months, we will publish more articles on the impact of health care reform as certain legislative guidelines become clearer. However, for this article we wanted to make all dealerships aware of the requirements that will have an immediate impact on their company.

Effective July 1, 2010, coverage for dependents expands to age 28 (Ohio Law) which supersedes the federal law of age 26. All eligible new polices issued in Ohio on our after July 1, 2010 will include the coverage expansion to age 28. For existing policies, employees can add dependents on the policy’s first renewal date on or after July 1, 2010. To receive coverage up to age 28, the child must be:

• The natural child, stepchild or adopted child of the employee
• Unmarried
• An Ohio resident or a full-time student at an accredited public or private institution of higher education
• Not employed by an employer that offers any health benefit plan under which the child is eligible for coverage
• Not eligible for coverage under Medicaid or Medicare
• Note: The child does not have to live with the parent, be financially dependent upon the parent or be a full-time student (unless the child is a non-resident of Ohio)

For those companies that have employees or dependents who are non-residents of Ohio, dependents can be covered up to age 28 as long as they are full-time students at an accredited public or private institution of higher education. If the dependent is not a full-time student, they can be covered up to age 26 per federal law. Federal law will go into effect for plan beginning on or after September 23, 2010.

It is important to note, as an employer you are not required to pay for these dependents. The state has stated the employer does not have to contribute to these overage dependents. Your responsibility from a human resource standpoint is to send a notice 30 days before your open enrollment period to all employees letting them know of the new provision.

Effective for the first plan year beginning on or after September 23, 2010:

• No lifetime plan limits.
• No rescission of coverage. Group health plans and insurance carriers cannot rescind coverage except where fraud or intentional misrepresentation occurs.
• Preventative care will now be covered at 100%, which at a minimum includes immunizations and screenings for infants and children.
• No preexisting condition exclusions for enrollees under the age of 19.

For the tax year 2010, qualifying small businesses will receive a federal tax credit of up to 35% of the health insurance costs. To qualify for the credit, businesses must have the equivalent of fewer than 25 employees and an average wage of less than $50,000. Employers with the equivalent of 10 or fewer employees and average wages of less than $25,000 get the full credit. There is a phase-out range for up to 25 employees and $50,000 in wages.