HEALTH CARE REFORM TIMELINE OF EVENTS

As the debate over the Affordable Care Act1 (the “Act) continues, several components of the law have been enacted over the last year and will continue to be implemented in coming years.

Components enacted in 2010 and 2011:

• Dependents are eligible for coverage provided by a parent’s plan up to age 26; however, plans that maintain grandfathered status may choose to limit eligibility if the dependent is eligible for other employer-sponsored coverage.
• Pre-existing condition exclusions removed for children under age 19.
• Plans may not impose a lifetime limit on essential health benefits; annual limits that meet certain thresholds are allowed.
• Plans may not terminate coverage retroactively (i.e., rescind coverage) except in the case of fraud or an intentional misrepresentation of material fact.
• Over-the-counter medications are not eligible for reimbursement under a Health FSA, HSA or HRA unless prescribed by a doctor or is insulin.
• Penalty for non-qualified HSA or Archer MSA distributions increased to 20%.
• Employers must provide Medicare Part D Creditable Coverage Disclosure Notice to certain individuals by October 14 of each year (previously November 14).
• Non-grandfathered plans must provide coverage for certain preventive care services, immunizations and screenings without any employee cost-sharing.
• Non-grandfathered plans must include certain patient protections.
• Non-grandfathered plans must implement certain processes for internal claims appeals and external reviews

Components eliminated in 2011:

• Free Choice Voucher program
• CLASS (Community Living Assistance Support and Services) Act long-term care benefit

Components expected in 2012:

• Employers must distribute a uniform summary of benefits and coverage to participants.
• Form W-2 reporting of health coverage for employers issuing 250 or more Form W-2’s (optional for employers filing less than 250 Form W-2’s).
• Health plan fee to fund clinical effectiveness begins ($1/covered life/year for first year; $2 for second year and indexed thereafter).
• Expanded definition of women’s preventive services (effective for plan years occurring on or after August 1, 2012)

Components expected in 2013:

• Health FSA salary reductions capped at $2,500 per year beginning January 1, 2013; will be indexed to inflation beginning in 2014.
• Form W-2 reporting for health coverage for employers issuing less than 250 Form W-2’s may apply (initially effective in 2013, this provision has been delayed until further guidance is provided).
• Change in Medicare retiree drug subsidy tax treatment takes effect.
• Employers must provide notice to employees that includes information on health insurance Exchanges, premium subsidies and employer contributions.

Components expected in 2014:

• Health insurance Exchanges open
• Insurance market reforms take effect; Pre-existing condition exclusions cannot be applied to any individual; Health insurance guaranteed availability and renewability.
• Waiting periods for health plans cannot exceed 90 days.
• Automatic enrollment of employees into group health plan for employers with more than 200 employees (effective date unknown).
• Individual mandate takes effect
• Employer “Play or Pay” penalties may apply to employers that do not provide coverage to full-time employees, that offer minimum essential coverage that is unaffordable or that offer coverage under which the plan’s shares of the total allowed cost of benefits is not at least 60%.
• Additional employer reporting and disclosure.
• HIPAA wellness limit increases to 30%.

Components expected in 2018:

• Excise tax on high-cost “Cadillac Plans”