Though the Patient Protection and Affordable Care Act was signed into law by President Barack Obama March 23, several of the health-care reform bill’s components won’t kick in until the beginning of the year.
“The government is still releasing the final regulations on much of this, and I am currently reviewing everything,” said Laura Miller, director of benefits for The University of Toledo’s Human Resources Department. “We will have full information available during open enrollment (now through Nov. 15 — click here to see dates of information sessions), but it is clear that many of these consequences will affect UT employees in some way.”
According to Miller, some of the changes that directly impact UT will include:
Tax forms disclosure
Employers such as UT now are required to list the annual total cost of vision, dental and health benefits provided by the employer for each employee’s health insurance coverage on the employee’s annual Form W-2.
This will not entail any tax consequences for the employees.
Large employers also will be required to enroll their otherwise uninsured employees into a health insurance plan with the cheapest applicable premium. According to Miller, this particular provision should not affect UT insurance plans, which will be grandfathered in.
Coverage for dependants
The legislation mandates that employer-sponsored plans, as well as self-insured plans, cover the uninsured children of insured adults until the age of 26. The current cut-off age for UT plans is 19 if the dependant is not enrolled in an academic institution and 24 or 25 if he or she is, depending on the health plan.
Miller said the cost of this condition will be relatively small for UT, amounting to a 1 percent increase in costs according to governmental estimates.
Lifetime and annual limits banned
In an effort to protect the insured from health insurance company abuses, the bill also will necessitate that insurers notify their customers of any alterations to their plans 60 days in advance of when the changes take affect.
The establishment of lifetime and annual limits on the dollar value of essential benefits also has been banned. Miller notes, however, that the term “essential benefits” has yet to be defined.
One of the most notable consequences of the bill, of course, is the coverage it aims to offer to millions of presently uninsured Americans. To help pay for the government subsidies needed to assist lower- and middle-class Americans to purchase insurance through state public exchanges or elsewhere, increased tax revenue is being sought.
In this vein, the bill prohibits untaxed, over-the-counter purchases of medicine with flexible spending account, health reimbursement arrangement and health saving account funds that are not prescribed by a physician. All of these funds are pre-taxed monies that can be used for medical purchases.
The bill’s efforts to stem the misuse of insurance funds by the public also will lead to an increased cost penalty on non-medical health saving account distributions of 20 percent, up from 10 percent.