healthcare reform one year later…
a reminder of what’s new
What’s changed since March 23, 2010 when the Patient Protection and Affordable
Care Act (PPACA) was passed?
- Dependent children are allowed to continue coverage up to age 26
- Removal of lifetime limits
- Restrictions on annual limits for essential health benefits
- Removal of preexisting conditions for children under age 19
- Over-the-counter drugs are restricted for Flexible Spending Account
(FSA) reimbursements - 100% coverage for “preventive care” benefits
Other changes include a Small Business Tax Credit for employers with less
than 25 full time employees and meeting certain criteria.
Regulatory guidance continues to be released clarifying the new rules. Some
provisions have been delayed for further clarification such as nondiscrimination
testing and W-2 reporting of health costs.
what is the financial impact of the health reform provisions so far?
Health plans are trying to analyze the effect of the current requirements,
but the potential impact won’t be fully recognized until all the regulations
are finalized. Some insurance companies estimate the impact to premium
rates based on the above changes will be between .5% and 3.5%.
what’s next?
If the regulations are actually implemented, the biggest changes will
occur in 2014, when there will be an individual mandate, an employer mandate,
employer penalties of either $2000 or $3000 per employee for not offering
insurance, and the implementation of state based exchanges, where individuals
and employees may be eligible for premium subsidies. However, with
so much uncertainty as to how the law will be interpreted or even upheld,
many employers should be cautious of making sweeping changes over the next
few years. DDI will keep you informed along the way, so you will have the
facts to make the best decisions for your business.
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reform facts:
- Over 600,000 young adults under 26 joined their parents’ plans in the
first quarter of 2011, faster growth than predicted under HHS’s estimate
of 1.2 million by end of 2011. (Source: Kaiser Health News) - 24 percent of young adults 18-26 were uninsured in the first four months
of 2011, compared to 28 percent in 2010. (Source: Gallup)
healthcare facts:
- More than seven of ten adults believe the U.S. health system needs
fundamental change or complete rebuilding. (Source: The Commonwealth
Fund) - Employer health costs increased 14 percent in the last five years:
employee out-of-pocket costs (premiums, co-payments, deductibles) increased
47 percent while wages increased 18 percent percent. (Source: Bureau
of Labor Statistics [BLS]) - Health costs for children: $1,468 annually; cost for children with
diabetes: $9,061 annually—$9,333 with insulin and $5,683 with oral medications.
(Source: Centers for Disease Control and Prevention)
healthcare quotes:
Beyond Health INSURANCE reform to Health CARE reform…
- “Improving the way we deliver care is the right way to make our health
care system sustainable over the long run. The alternative would limit
services and shift onerous burdens to the people who need it the most.”
Don
Berwick, CMS Administrator, “The Right way to Reform Medicare” Wall Street
Journal Editorial April 29, 2011. - “And we have today a 21st-century operating room and a 19th-century
administrative room. Health IT is the best way to bring that administrative
room to the 21st century.”
Senator Tom Daschle (D-ND) Co-Leader, Bipartisan
Policy Center (BPC) Health Project, April 26, 2011, “A Dialogue on Health”.
For more information on creating a customized benefits package for your employees, contact DDI Benefits at 503.206.5654, or via email to dena@ddibenefits.com
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