CBIZ Matrix Rev 101811v2reduced

A TOOL FOR UNDERSTANDING THE IMPACT OF HEALTH CARE REFORM
Patient Protection and Affordable Care Act (Public Law 111-148, Enacted March 23, 2010) and the Health Care and Education Reconciliation Act (Public Law 111-152, enacted March 30, 2010)
CBIZ HEALTH REFORM MATRIX
The following health reform provisions matrix is divided into six categories:
EMPLOYER/PLAN SPONSOR ISSUES ......................................................................................................................................... 2 REPORTING AND DISCLOSURE ISSUES ................................................................................................................................... 15 TAX ISSUES ............................................................................................................................................................................... 23 INSURANCE ISSUES .................................................................................................................................................................. 31 INDIVIDUAL RESPONSIBILITY ................................................................................................................................................... 41 MEDICARE ISSUES .................................................................................................................................................................... 45
Copyright 2011 CBIZ, Inc. NYSE listed: CBZ. All rights reserved.
10/18/2011
ALSO SEE REPORTING AND DISCLOSURE ISSUES, TAX ISSUES & INSURANCE ISSUES
EMPLOYER/PLAN SPONSOR ISSUES
10/18/2011
(also see Reporting and Disclosure, Tax Issues & Insurance Issues)
Provision
Unless otherwise noted, these provisions apply to both insured and self-funded plans
Temporary Early Retiree Reinsurance Program. The Early Retiree Reinsurance Program (ERRP) began June 1, 2010, and is designed to encourage employers to establish or maintain health coverage for their early retirees (aged 55-64), and their eligible spouses and dependents. The purpose of the program is to provide reimbursement of certain expenses to plan sponsors of group health plans that provide retiree coverage. Application Process. To be eligible to participate in the program, an application must be filed with HHS. HHS will only accept applications submitted on its official application form. Reimbursement Process Once a plans application has been approved (certified), the ERRP reimburses up to 80% of the cost of benefits in excess of $15k and below $90k. The reimbursement must be used to lower plan costs, or to reduce participant premiums, copayments, deductibles, coinsurance, or other out-of-pocket expenses. Notification Requirement. Certified plans must provide notice to all plan participants, including covered family members, explaining that the plan has been approved to receive ERRP reimbursement, and that the resulting reimbursement monies may impact the participants coverage under the plan. Application Deadline. In April 2011, HHS announced that the $5B funding allocated to ERRP is running out; and thus, applications must be submitted no later than 5:00 PM (ET) on May 5, 2011. No applications for ERRP will be accepted after May 5, 2011. The ERRP application, model notice, FAQs and additional information is available via its website: http://www.errp.gov. The Program expires January 1, 2014.

Impact
Note: The IRC control group rules apply for determining employer size
All-sized employers
Effective Date 2010

Program began 6/1/10
Related CBIZ Health Reform Bulletin

Early Retiree Reinsurance Program (5/5/10) Early Retiree Subsidy Initial Application Date is Approaching (6/11/10) Early Retiree Reinsurance Program Application Process Opened (6/29/10) Update: Early Retiree Reinsurance Program (9/1/10) Early Retiree Reimbursement Program Updates (10/5/10) Grandfathered Status and ERRP Updates (04/04/11) ACA Updates: CLASS Act Suspended, Increase in ERRP Cost Thresholds and Amounts, and What Are Essential Benefits? (10/17/11)
10/18/2011
Provision
Extension of Dependent Coverage Group health plans that provide dependent coverage must continue to make such coverage available to an adult child up to age 26. For this purpose, a dependent includes a biological child, a step child, an adopted child or a foster child. Coverage must be available without regard to the childs marital status, or whether the child can be claimed as a dependent. Older-aged dependents cannot be subject to a surcharge, premium penalty, or any other plan differential, unless the differential is imposed on all dependents under the plan. An insurer is allowed to charge a differential for tiers of coverage (self, self + one, self + two, etc.). An older-aged dependents enrollment must be effective as of the first day of the first plan year beginning on or after 9/23/10.

Impact
All-sized employers
Effective Date 2010

Plan years beginning on or after 9/23/10

Health Reforms Coverage for Dependent Children Explained (5/10/10) Grandfathered Health Plan Rules (6/17/10) New Model Notices Issued (7/12/10) Agencies Issue PPACA Clarifications (10/12/10) Agencies Issue Additional PPACA Clarifications (12/23/10)
Important Notes: The extension of dependent coverage does not apply to HIPAA-exempt programs, limited scope dental and vision plans, and stand alone retiree-only plans. Grandfathered Plan Exception: Older-aged dependent coverage must be available to an adult child up to age 26, unless he/she has access to other employer-provided coverage; this exception expires for plan years beginning on or after January 1, 2014.
Ban on Preexisting Condition Exclusions. Group health plans, including grandfathered plans, are prohibited from imposing preexisting condition exclusions on enrollees under 19. Plan exclusions can still be imposed; however, the imposition of a new exclusion may cause a plan to lose grandfathered status. Beginning 1/1/14, preexisting condition exclusions cannot be imposed on anyone.
(N/A to HIPAA-exempt programs, limited scope dental and vision plans, and stand alone retiree-only plans.)
All-sized employers
Patients Bill of Rights (6/23/10)
10/18/2011
Provision
Unless otherwise noted, these provisions apply To both insured and self-funded plans
Ban on Rescissions. Group health plans, including grandfathered plans, cannot rescind such plan or coverage once an enrollee is covered under the plan, except in the event of fraud or intentional misrepresentation of material fact. Cancellation can be retroactive for the failure to pay premium. Plans must provide 30 days advance written notice to each participant who would be affected before coverage may be rescinded.

Impact
All-sized employers
Effective Date 2010


Patients Bill of Rights (6/23/10) Agencies Issue PPACA Clarifications (10/12/10)
Ban on Annual and Lifetime Limits. Group health plans, including grandfathered plans, are prohibited from establishing lifetime limits and unreasonable annual limits on the dollar value of essential benefits (to be defined by regulations) for a participant or beneficiary. Plans are allowed to impose limits on non-essential benefits. A change in annual or lifetime limits can cause a plan to lose grandfathered status. Special Enrollment Period A special enrollment opportunity must be made available to individuals whose coverage has dropped due to reaching the plans lifetime limit. The impacted individual must be allowed to enroll in any of the benefit packages offered by the employer, as long as the eligibility criteria are met. The enrollment period must be for a minimum of 30 days. Mini-Med Plan Waivers. Mini-med plans in existence prior to 9/23/10 may apply for a waiver of the annual limits. The waivers will not be allowed after 1/2/14. The waiver is only granted for one plan year at a time and plans must request a waiver for each subsequent plan year.
All-sized employers
Patients Bill of Rights (6/23/10) New Model Notices Issued (7/12/10) Mini-Med Plan Relief from Annual Limit Restriction Offered (9/21/10) Relief for Stand-Alone Health Reimbursement Arrangements (8/23/11) Update: Mini-Med Plan Waivers (6/22/11) ACA Updates: CLASS Act Suspended, Increase in ERRP Cost Thresholds and Amounts, and What Are Essential Benefits? (10/17/11)
10/18/2011
Provision
Coverage for Preventive Health Services. Group health plans must provide coverage for certain maternal and preventive health services, as well as evidence-based items or services recommended by the U.S. Preventive Services Task Force, the Advisory Committee on Immunization Practices as adopted by the Director of the CDCP and guidelines supported by the HRSA, without imposing any cost sharing requirements when the services are delivered by in-network providers. Independent Claims and Appeals, and External Review Process. Insured and self-funded group health plans must provide for an internal claim and appeals process, as well as an external review process, for coverage determinations and claims.

Impact
All-sized employers
(N/A to grandfathered plans, HIPAA-exempt programs, limited scope dental and vision plans, and stand alone retiree-only plans.)
Effective Date 2010


Preventive Health Services (7/15/10) Preventive Care Coverage Expanded to Include Womens Health Services (8/3/11)
All-sized employers
(N/A to grandfathered plans)
Plan years beginning on or after 9/23/10 Note: Enforcement delayed in certain aspects of these rules see Delay in Claims
and Appeals Enforcement
Internal Claims and Appeals, and External Review Process (7/26/10) Federal External Claims Review: Interim Procedures and Model Notices (8/30/10) Agencies Issue PPACA Clarifications (10/12/10) Delay in Claims and Appeals Enforcement (3/22/11) Modifications to Claims and Appeals, and External Review Processes (7/11/11) Salary-based Discrimination Rules Applicable to Fully Insured Group Health Plans (8/24/10) Agencies Issue PPACA Clarifications (10/12/10) Implementation of Salary-based Discrimination Rules Delayed (12/23/10)
Salary-based Discrimination Rules Applicable to Insured Group Health Plans. Insured group health plans must comply with the nondiscrimination rules (IRC 105(h)) currently applicable to selffunded plans. Plans cannot discriminate in favor of highly compensated individuals as to eligibility and benefits. The consequence of a discriminatory insured plan is an excise tax equaling $100 a day, per affected employee, with a maximum penalty of $500,000.
All-sized employers
Plan years beginning on or after 9/23/10; However, IRS Notice 2011-01 delays the effective date of these rules; no penalties will be imposed until after implementing regulations are issued.
10/18/2011
Provision
Choice of Primary Care Provider. If a group health plan requires designation of a primary care provider (PCP), a participant must be allowed to designate a participating in-network PCP, who is available to accept him/her. A pediatrician can be designated as a childs PCP.

Impact
All-sized employers
Effective Date 2010


Patient's Bill of Rights (6/23/10) New Model Notices Issued (7/12/10)
Direct Access to OB/GYN Services. Group health plans must provide direct access to OB/GYN providers, without prior authorization or a referral from the individuals primary care physician. Plans may require the OB/GYN provider to agree or adhere to the plans policies and procedures relating to referrals, obtaining prior authorization, and providing services, pursuant to a treatment plan.
All-sized employers
(N/A to grandfathered plans, HIPAA-exempt programs, limited scope dental and vision plans, and stand alone retiree-only plans)
Access to Emergency Room Services. Group health plans that provide coverage for hospital emergency room services must also cover emergency services without prior authorization, even if the emergency services are provided on an out-of-network basis. Plans cannot impose limitations on coverage or greater cost sharing requirements for out-ofnetwork emergency services than those that apply to in-network services. 60-day Advanced Notice of Material Modification of Benefits. A notice of any material modification of benefits must be provided to plan participants no later than 60 days prior to the effective date of the change.
Note: In addition to this requirement, plans subject to ERISA, presumably, will have to continue complying with all existing ERISA disclosure requirements; this may be clarified in future regulations. Plans exempt from ERISA are subject to this new requirement. (N/A to HIPAA-exempt programs, limited scope dental and vision plans, and stand alone retiree-only plans.)
All-sized employers
Patient's Bill of Rights (6/23/10)
All-sized employers
Effective 3/23/10, but plans not obligated to comply until implementing regulations are issued by HHS/DOL/IRS
Agencies Issue Additional PPACA Clarifications (12/23/10)
10/18/2011
Provision
OTC Medications Are Not Qualified Expenses. FSAs, HRAs, Archer MSAs, and HSAs can no longer reimburse the cost of over-the-counter (OTC) medications, except for insulin or prescribed OTC medications. Debit cards for FSAs and HRAs can only be used for prescribed OTC medications, if certain conditions met. Medical Loss Ratio. Insurers in the individual and group markets, including grandfathered plans, are required to provide an annual rebate to each enrollee if the ratio of the amount of premium revenue expended on costs related to reimbursement for clinical services and activities that improve health care quality versus the total amount of premium revenue is less than: 85% for insurers in the large group market 80% for insurers in the small group or individual markets Beginning January 1, 2014 the rebate amount will be based on averages for each of the previous 3 years for the plan. Simple Cafeteria Plans. An eligible small employer can establish a simple cafeteria plan that includes a safe harbor from the nondiscrimination requirements applicable to cafeteria plans and certain qualified benefits. These simple cafeteria plans must meet the following requirements: 1. Eligible Employer. To be eligible to sponsor a simple cafeteria plan, the employer must have employed an average of 100 or fewer employees on business days during either of the 2 preceding years.

Impact
Individuals
Effective Date
2011
1/1/11

Over-the-Counter Medication Prohibition Clarified (9/7/10) Limited Relief for Debit Card Purchases of OTC Medications (1/10/11)
Plans in the large group, small group and individual markets, including grandfathered plans. These restrictions do not apply to self-insured plans.
1/1/11
Employers with 100 or fewer employees
Simple Cafeteria Plans (9/1/10)
10/18/2011
Provision
Simple Cafeteria Plans continued 2. Minimum eligibility and participation requirements. All employees who had at least 1,000 hours of service for the preceding plan year are eligible to participate in the plan and may, subject to terms and conditions applicable to all participants, elect any benefit available under the plan. 3. Contribution requirement. The employer is required, without regard to whether a qualified employee makes any salary reduction contribution, to make a contribution to provide qualified benefits under the plan, on behalf of each qualified employee. CLASS Act: Voluntary, Self-Funded Long-Term Insurance Program. HHS will establish a voluntary long term care insurance program for purchasing community living assistance services and supports (CLASS program). An individual would be required to contribute to the program for 5 years (vesting period) before benefits (up to $50/day cash benefit) are available. The payments can be used to purchase non-medical services and support necessary to maintain community residence, including, home modifications, assistive technology, accessible transportation, homemaker services, respite care, personal assistance services, home care aides, and nursing support. The program is financed entirely through voluntary payroll deductions. All working adults will be automatically enrolled in the program, unless they choose to opt-out. Employers can voluntarily choose to provide enrollment tools and process the premiums for the program. All-sized employers

Impact
Effective Date
2011
This provision has been suspended
ACA Updates: CLASS Act Suspended, Increase in ERRP Cost Thresholds and Amounts, and What Are Essential Benefits? (10/17/11)
10/18/2011
Provision
Uniform Summary of Plan Benefits and Coverage. Plans must provide applicants and enrollees an additional disclosure document, explaining certain aspects of the health benefit coverage. The document must meet uniform standards, such as format, appearance, language, and content.

Impact
All-sized employers
Effective Date
2012
3/23/12 (or, 12 months after model forms issued)

Proposals on Exchanges, Premium Assistance and Uniform Benefit Summary (8/18/11)
Note: In addition to this requirement, plans subject to ERISA, presumably, will have to continue complying with all existing ERISA disclosure requirements; this may be clarified in future regulations. Plans exempt from ERISA will be subject to this new requirement.
Patient-Centered Outcomes Research Fee. Group health plans must pay a fee of $2 ($1 for policy years ending during fiscal year 2013) multiplied by the average number of lives covered under the policy. The fee must be paid by insurers of fully-insured plans, and employers of self-funded plans. The fees will be used to measure patient-centered outcomes.
Insurers of fully-insured plans and All-sized employers of self-funded plans
Plan years beginning 9/30/12
Effective Date 2013

FSA Cap. The maximum amount of salary contributions to a flexible medical spending account is capped at $2,500. Retiree Prescription Drug Coverage. An employers deduction for retiree prescription drug expenses is reduced by the amount of the Medicare Part D tax-free subsidy. Automatic Enrollment in Health Plan. Employers who offer their employees enrollment in one or more health benefit plans, are required to automatically enroll new full-time employees in one of the plans offered, subject to any waiting period. All-sized employers with FSA plan All-sized employer sponsored health plans claiming Medicare Part D retiree drug subsidy Employers with 200+ full-time employees 1/1/13 1/1/13
Notice due 3/1/13 Requirement for automatically enrolling is to be clarified.
10
10/18/2011
Provision
Shared Responsibility for Employers regarding Health Coverage. A (tax) penalty could be imposed against employers who: Fail to Offer Coverage to full-time employees; or Offer coverage to employees qualified for premium tax credits or cost-sharing reductions. Reporting Requirement. Employers subject to the penalty for noncompliance are required to file an IRS return and furnish information statements to employees. The return and information statement must include: 1. Identifying information of the employer and covered employees; 2. Certification as to whether the employer offers minimum essential coverage; 3. Length of any waiting period; 4. The months during the calendar year for which coverage was available; 5. The monthly premium for the lowest cost option in each enrollment category; 6. The employers share of the total costs of benefits, and 7. The number of full-time employees.

Impact
Employers with 50+ fulltime equivalent employees (FTEE). A FTEE is determined by dividing the aggregate number of hours worked by part-time employees in a month by 120. The number of FTEEs is reduced by 30 and parttime employees are not counted for penalty assessment purposes.
Effective Date
2014
1/1/14
11
10/18/2011
Provision
Free Choice Vouchers. Employers who offer minimum essential coverage to employees and pay any portion of the cost would have been required to provide free choice vouchers to certain qualifying employees (those exempt from the individual mandate, but do not qualify for premium subsidies). Ban on Discriminatory Premium Rates. Group health plans may only vary premium rates based upon: Individual or family coverage; The rating area; Age (rates cant vary by more than 3 to 1); and Tobacco use (rates cant vary by more than 1.5 to 1). Ban on Excessive Waiting Periods. Group health plans cannot require enrollment waiting periods in excess 90 days.

Impact
All-sized employers
Effective Date
2014
This provision has been repealed.

Repeal of 1099 and Voucher (4/19/11)
Employers with 100 or fewer employees. May be applicable to large employer plans (100+ employees) offered through Exchange. All-sized employers
12
10/18/2011
Provision
Ban on Discrimination Based on Health Status. Group health plans and insurers are prohibited from imposing discriminatory eligibility rules based on any of the following health status-related factors, relating to the covered individual or his/her dependent: Health status; Medical condition (including both physical and mental illnesses); Claims experience; Receipt of health care; Medical history; Genetic information; Evidence of insurability (including conditions arising out of acts of domestic violence). Disability; or Any other health status-related factor determined discriminatory by HHS. Reward for Participation in Wellness Program. The reward under a standard-based wellness program can be up to 30% (currently 20%) of the cost of coverage (this amount could increase up to 50%, if deemed appropriate by the Agencies). Wellness premium discounts will not cause loss of grandfathered status. Coverage for Individuals Participating in Approved Clinical Trials. Individual and group health plans cannot deny individual participation in approved clinical trials and must cover routine costs in approved clinical trials. Insurers are not required to cover: The investigational item, device or service; Items and services that are provided solely to satisfy data collection and analysis needs that are not used in the direct clinical management of the patient; or A service that is clearly inconsistent with widely accepted and established standards of care for a particular diagnosis.

Impact
All-sized employers
Effective Date
2014
All-sized employers
All-sized employers
13
10/18/2011
Provision
Excise Tax on High Cost Employer-Sponsored Health Coverage. A 40% excise tax will be imposed on the value of high cost employer sponsored health coverage (Cadillac health plans) exceeding certain threshold limits ($10,200/individual; $27,500/family) [indexed]. The employer calculates the excise tax and provides it to the insurer or third party administrator, who then pays the tax.

Impact
All-sized employers
Effective Date
2018
1/1/18
14
10/18/2011
ALSO SEE EMPLOYER/PLAN SPONSOR ISSUES, TAX ISSUES & INSURANCE ISSUES
REPORTING AND DISCLOSURE ISSUES
15
10/18/2011
(also see Employer/Plan Sponsor Issues, Tax Issues & Insurance Issues)
Provision
Notice of Special Enrollment: Extension of Dependent Coverage to Age 26. Dependents who age off a group health plan must be given a special enrollment opportunity of 30 days. The 30-day enrollment opportunity must be provided to: Dependents who were not eligible when the parent first became covered under the plan; Dependents who have lost eligibility; and Dependents currently on COBRA, due to loss of eligibility. Dependent children who become newly eligible by virtue of this law must be given a special enrollment opportunity to enroll in any of the benefit packages offered by the employer. Notice Requirement. A written notice explaining the special enrollment opportunity, and the 30-day enrollment period, must be provided no later than the first day of the first plan year beginning on or after 9/23/10. The notice must include a statement that children whose coverage ended, or who were denied coverage (or were not eligible for coverage), because the availability of dependent coverage of children ended before attainment of age 26 are eligible to enroll in the plan or coverage. The notice may be provided to an employee on behalf of the employees child. In addition, the notice may be included with other enrollment materials that a plan distributes to employees, provided the statement is prominent. Enrollment must be effective as of the first day of the first plan year beginning on or after 9/23/10.

Impact
All-sized employers
Effective Date
2010

16
10/18/2011
Provision
Dependent Coverage (Continued) Important Notes:
The extension of dependent coverage does not apply to HIPAA-exempt programs, limited scope dental and vision plans, and stand alone retireeonly plans Grandfathered Plan Exception: Older-aged dependent coverage must be available to an adult child up to age 26, unless he/she has access to other employer-provided coverage; this exception expires for plan years beginning on or after January 1, 2014.

Impact
Effective Date
2010
Notice of Rescission of Coverage. Individual and group health plans, including grandfathered plans, must provide 30 day-advanced written notice of a rescission of coverage to each affected individual, prior to rescinding coverage. Lifetime Limit Notifications. Group health plans must provide written notice to individuals when the lifetime limit on the dollar value of all benefits is no longer applicable and that an individual, if covered, is once again eligible for benefits under the plan. Special Enrollment Period. For those individuals whose coverage has dropped due to reaching the plans lifetime limit, a special enrollment opportunity must be made available. The individual must be given notice of the enrollment opportunity. The notice may be included with other enrollment materials as long as the statement is prominent. The notice and enrollment opportunity must be provided beginning no later than the first day of the first plan year beginning on or after 9/23/10 and coverage must take effect no later than the first day of the first plan year beginning on or after 9/23/10.
All-sized employers
Patients Bill of Rights (6/23/10) Agencies Issue PPACA Clarifications (10/12/10) Patients Bill of Rights (6/23/10) New Model Notices Issued (7/12/10) Mini-Med Plan Relief from Annual Limit Restriction Offered (9/21/10)
All-sized employers
17
10/18/2011
Provision
Notice of Grandfathered Health Plan Status. All grandfathered health plans, whether insured or self-funded, are required to provide a Notice to covered individuals of the plans grandfathered status. The Notice may be included in any plan materials provided to participants and beneficiaries and must include the plans contact information for questions and complaints.

Impact
Grandfathered plans, whether insured or self-funded
Effective Date
2010
No later than the first day of the first plan year beginning on or after 9/23/10

Grandfathered Health Plans Rules (6/16/10) New Model Notices Issued (7/12/10) Agencies Issue PPACA Clarifications (10/12/10) Grandfathered Status & ERRP Update (04/04/11) Patient's Bill of Rights (6/23/10) New Model Notices Issued (7/12/10)
Notice of Choice of Primary Care Provider. if a group health plan requires designation of a primary care provider (PCP), a participant must be allowed to designate a participating in-network PCP, who is available to accept him/her. A pediatrician can be designated as a childs PCP.
All-sized employers
Notice of Right to Direct Access to OB/GYN Services. Group health plans must provide direct access to OB/GYN providers, without prior authorization or a referral from the individuals primary care physician. Plans may require the OB/GYN provider to agree or adhere to the plans policies and procedures relating to referrals, obtaining prior authorization, and providing services, pursuant to a treatment plan.
All-sized employers
18
10/18/2011
Provision
60-day Advanced Notice of Material Modification of Benefits. A notice of any material modification of benefits must be provided to plan participants no later than 60 days prior to the effective date of the change. Note: In addition to this requirement, plans subject to ERISA, presumably, will

Impact
All-sized employers
Effective Date
2010
Effective 3/23/10, but plans not obligated to comply until implementing regulations are issued by HHS/DOL/IRS

Agencies Issue Additional PPACA Clarifications (12/23/10)
have to continue complying with all existing ERISA disclosure requirements; this may be clarified in future regulations. Plans exempt from ERISA are subject to this new requirement. N/A to HIPAA-exempt programs, limited scope dental and vision plans, and stand alone retiree-only plans.
Notice of Participation in Early Retiree Reimbursement Program. Group health plans participating in the ERRP and have received certification, must provide notice to all plan participants, including covered family members, explaining that the plan has been approved to receive ERRP reimbursement, and that the resulting reimbursement monies may impact the participants coverage under the plan. The notice may be hand delivered to the participant, as long as it is addressed to all family members. Employees may be provided with the notice electronically; however, a statement that the employee is responsible for providing the notice to covered family members should be included with the notice. The ERRP model notice and additional information is available via its website: http://www.errp.gov.
Group health plans that are participating in the ERRP, whether insured or self-funded
Immediately after the first reimbursement is received, but it may be provided in advance
Early Retiree Reinsurance Program (5/5/10) Early Retiree Subsidy Initial Application Date is Approaching (6/11/10) Early Retiree Reinsurance Program Application Process Opened (6/29/10) Update: Early Retiree Reinsurance Program (9/1/10) Early Retiree Reimbursement Program Updates (10/5/10)
19
10/18/2011
Provision
Independent Claims and Appeals, and External Review Process. As part of the requirements applicable to independent claims and appeals, and external review process, the plan or insurer must provide claimants with the following document(s), in writing, to the affected individual(s): Notice of Adverse Benefit Determination Notice of Final Internal Adverse Benefit Determination Notice of Final External Review Decision. There are specific content and timeframes for providing these notices, depending on whether the issue relates to an urgent care or lifethreatening matter, or whether it relates to a non-urgent matter. In addition, there are specific methods of distribution of the various notices in urgent and non-urgent instances. In addition to these notice requirements, plans subject to ERISA must to continue to comply with all existing ERISA claims and appeal disclosure requirements.

Impact
Non-grandfathered group health plans and plans that lose grandfathered status. These rules apply to ERISA plans and non-ERISA plans, such as governmental plans and church plans.
Effective Date
2010

Internal Claims and Appeals, and External Review Process (7/26/10) Federal External Claims Review: Interim Procedures and Model Notices (8/30/10) Agencies Issue PPACA Clarifications (10/12/10) Delay in Claims and Appeals Enforcement (3/22/11) Modifications to Claims and Appeals, and External Review Processes (7/11/11)
delayed in certain aspects of these rules see Delay in Claims
Note: Enforcement
and Appeals Enforcement
Effective Date 2011

New Form W-2 Reporting Rules. Employers are required to disclose the aggregate cost of any employer-sponsored health insurance coverage on the Form W-2, including both the employers and employees share. Plans excluded include LTC plans; on-site medical clinics; stand-alone, non-integrated dental or vision plans; contributions to HSAs, Archer MSA, HRAs, or salary reduction contributions to FSA; or multiemployer plans. The aggregate cost can be calculated in one of several ways: the insurance premium method, the COBRA method, or, a modified COBRA method. All-sized employers required to file a Form W-2.
N/A to Self-funded plans exempt from federal COBRA; governmentsponsored plans maintained for military members and their families; or Federally-recognized Indian tribal government plans.
Beginning 2011 Tax Year; however, the reporting is voluntary for the 2011 plan year. Employers issuing fewer than 250 Form W-2s per year are exempt until 2013
See IRS Pronouncements in Agencies Issue Additional PPACA Clarifications (12/23/10) IRS Issues Interim Guidance on W-2 Reporting (3/30/11)
20
10/18/2011
Provision
Expanded 1099 Reporting Requirements. Businesses that pay $600 or more for goods and/or services to a single payee, whether a corporation or otherwise, would have been required to file an informational return reporting the payments.

Impact
All-sized employers
Effective Date
2012

Expanded 1099 Reporting Requirements for 2012 and Call for Public Comment (8/3/10) Repeal of 1099 and Voucher (4/19/11)
Uniform Summary of Plan Benefits and Coverage. Plans must provide applicants and enrollees an additional disclosure document, explaining certain aspects of the health benefit coverage. The document must meet uniform standards, such as format, appearance, language, and content.
Note: In addition to this requirement, plans subject to ERISA, presumably, will have to continue complying with all existing ERISA disclosure requirements; this may be clarified in future regulations. Plans exempt from ERISA will be subject to this new requirement.
All-sized employers
3/23/12 (or, 12 months after model forms issued)
Quality of Care Reporting Requirement. Plans and insurers are required to submit a quality of care report to HHS. The type of information included in the report are details about coverage benefits, health care provider reimbursement structures, any improvement of health outcomes, and implementation of any wellness or prevention activities. Notice of Exchange Coverage. Employers are required to provide each employee at the time of hiring, as well as current employees, a written notice informing the employee of the existence of an Exchange, including a description of the services provided by such Exchange, and the manner in which the employee may contact the Exchange to request assistance.
All-sized employers
3/23/12
Effective Date 2013 All-sized employers 3/1/13
21
10/18/2011
Provision
Employer Health Insurance Reporting Requirement. Reports to IRS. Employers must satisfy an IRS reporting requirement relating to its health insurance coverage as to access, eligibility, waiting periods, costs, number of employees, and other coverage details. Reporting Requirement. Employers subject to the penalty for noncompliance are required to file an IRS return and furnish information statements to employees. The return and information statement must include: 1. Identifying information for the employer and covered employees; 2. Certification as to whether the employer offers minimum essential coverage; 3. Length of any waiting period; 4. The months during the calendar year for which coverage was available; 5. The monthly premium for the lowest cost option in each enrollment category; 6. The employers share of the total costs of benefits, and 7. The number of full-time employees. Benefit Statements to Employees. The employees listed in the IRS report, above, must be furnished a written statement relating to information contained in the employers report, applicable to the employee.

Impact
Employers with 50+ full-time employees
Effective Date
2014
1/1/14
22
10/18/2011
ALSO SEE EMPLOYER/PLAN SPONSOR ISSUES, REPORTING AND DISCLOSURE ISSUES & INSURANCE ISSUES
TAX ISSUES
23
10/18/2011
(also see Employer/Plan Sponsor Issues, Reporting and Disclosure Issues & Insurance Issues)
Provision
Small Business Tax Credit. Small businesses and tax-exempt employers that provide health care coverage to their employees under a qualified health care arrangement are entitled to a credit for taxable years beginning 1/1/10. To be eligible, the business must: 1. Employ 25 or fewer full-time equivalent employees ("FTEs") for the tax year; 2. Pay average annual wages of less than $50,000 per employee; and 3. Maintain a qualifying arrangement, i.e., employer pays premiums for each employee enrolled in health insurance coverage offered by the employer in an amount equal to a uniform percentage (minimum 50%) of the premium cost of the coverage. Credit is only available for insured plans; it is not available for self-funded plans, including employer contributions to FSAs, HRAs, HSAs, or other similar account-based plans. Eligible tax exempt employers receive a credit of 25%. After 2013, the credit increases to 50% for employers (35% for tax exempt) purchasing coverage through an insurance exchange, subject to a 2 consecutive-year limit. The entire amount of premiums can be claimed as a credit by employers with 10 or fewer employees whose annual wages are $25,000 or less. Increase of Adoption Credit. Increase of the maximum amount of qualified adoption expenses eligible for tax credit from $12,170 (indexed for 2010) to $13,170 (indexed for inflation). The credit is fully refundable in year claimed.
TAX ISSUES
Impact
Employers who employ 25 or fewer full-time employees and pay average annual wages between a maximum of $25,000 (10 or fewer employees) and $50,000 (25 or fewer employees). Employers who employ 25 or more employees could qualify for the credit if some of its employees work part-time.
Effective Date
2010
1/1/10 Special credit carry back rules apply 1/1/11

The Small Business Health Care Tax Credit (5/20/10) Additional Guidelines to the Small Business Tax Credit (12/22/10)
Individuals
1/1/10 Sunset Date: 12/31/11
24
10/18/2011
Provision
Adult Dependent Children Coverage. The cost of employer-provided health coverage of dependent children under the age of 27 (as of the end of the tax year) is excluded from employees gross income, and is not included in employment taxes. Self-employed individuals may deduct premiums paid on dependent coverage. The exclusion of health expenses from the employees taxable income extends to reimbursements and premiums paid by employers. Economic Substance Doctrine. The economic substance judicial doctrine has been codified. Transactions are treated as having economic substance, and therefore, respected for tax purposes, only if the transaction results in a meaningful change to a taxpayers economic position, and the taxpayer has a substantial purpose for entering into the transaction (apart from Federal income tax effects). Significant penalties apply to transactions that fail these requirements. Excise Tax on Indoor Tanning Services. A 10% tax is imposed on the cost of indoor tanning services. Increased Penalty for Nonqualified HSA or Archer MSA Distributions. Penalties on nonqualified HSA distributions increase from 10% to 20%. The penalty for nonqualified distributions from Archer MSAs increases from 15% to 20%.
TAX ISSUES
Impact
All-sized employers
Effective Date
2010
3/30/10

IRS Guidance: Tax-Favored Status of Dependent Coverage (4/28/10) State Tax Treatment of Olderaged Dependent Coverage (12/16/10)
All-sized employers
Transactions entered into after 3/30/10
Individuals
7/1/10
Effective Date 2011

Individuals 1/1/11
25
10/18/2011
Provision
New Form W-2 Reporting Rules. Employers are required to disclose the aggregate cost of any employer-sponsored health insurance coverage on the Form W-2, including both the employers and employees share. Plans excluded include LTC plans; on-site medical clinics; stand-alone, non-integrated dental or vision plans; contributions to HSAs, Archer MSA, HRAs, or salary reduction contributions to FSA; or multiemployer plans. The aggregate cost can be calculated in one of several ways: the insurance premium method, the COBRA method, or, a modified COBRA method.
TAX ISSUES
Impact
All-sized employers required to file a Form W-2
N/A to Self-funded plans exempt from federal COBRA; governmentsponsored plans maintained for military members and their families; or Federally-recognized Indian tribal government plans.
Effective Date
2011
Beginning 2011 Tax Year; however, the reporting is voluntary for the 2011 plan year. Employers issuing fewer than 250 Form W-2s per year are exempt until 2013

See IRS Pronouncements in Agencies Issue Additional PPACA Clarifications (12/23/10) IRS Issues Interim Guidance on W-2 Reporting (3/30/11)
Effective Date 2012

Expanded 1099 Reporting Requirements. Businesses that pay $600 or more for goods and/or services to a single payee, whether a corporation or otherwise, will have to file an informational return reporting the payments. Certain business purchases made with credit or debit cards are exempted from the reporting requirement. All-sized employers
Expanded 1099 Reporting Requirements for 2012 and Call for Public Comment (8/3/10) Repeal of 1099 and Voucher (4/19/11)
Effective Date 2013

FSA Cap. The maximum amount of salary contributions to a flexible medical spending account is capped at $2,500. All-sized employer sponsored FSA plans 1/1/13
26
10/18/2011
Provision
Increased Medicare (Hospital Insurance) Tax on High-Income Individuals. The Medicare portion of an individuals FICA tax is increased (by 0.9%), from 1.45% to 2.35%, to the extent an individuals wages exceed $250,000 for married filing jointly, $200,000 for single taxpayers, or $125,000 for married filing separately. Employer must withhold on all wages >$200,000 Employee liable regardless of employer withholding Counted for estimated tax payments Unearned Income Medicare Contribution. A Medicare tax is imposed on high income individuals, equal to 3.8% of the lesser of an individuals: Net investment income (capital gains, interest, dividends, annuities, rent and gross income from passive activities); or Modified AGI in excess of $250,000 for married filing jointly, $200,000 for single taxpayers, or $125,000 for married filing separately. No employer withholding requirement Counted for estimated tax payments Net investment income excludes income from a qualified retirement plan and amounts subject to self-employment taxes. Retiree Prescription Drug Coverage. An employer's deduction for retiree prescription drug expenses is reduced by the amount of the Medicare Part D tax-free subsidy.
TAX ISSUES
Impact
Individuals with wages of $250,000 (married filing jointly), $200,000 (single), or $125,000 (married filing separately)
Effective Date
2013
1/1/13
Individuals with net investment income and modified AGI of $250,000 (married filing jointly), $200,000 (single), or $125,000 (married filing separately)
1/1/13
All-sized employer sponsored health plans claiming Medicare Part D retiree drug subsidy
1/1/13
27
10/18/2011
Provision
Modification of Itemized Deduction for Medical Expenses. The threshold for deductibility of unreimbursed medical expenses is increased from 7.5% to 10% of AGI. The 7.5% threshold is retained through 2016 for individuals who are at least 65 years old by year end. Shared Responsibility for Employers for Health Coverage. Covered employers may be subject to monthly nondeductible penalties: For failure to offer minimum essential coverage (including, in an employer-sponsored plan, employer payment of at least 60% of the benefit costs) at an affordable rate (employees contribution, including salary reduction amounts, cannot exceed 9.5% of household income): Monthly Penalty in 2014: (Number of full-time employees 30) x 166.67. After 2014 the amount of the penalty is indexed for inflation. Offering minimum essential coverage at an affordable rate, but at least one full time employee is eligible for or receives a premium tax credit or cost sharing assistance for buying insurance from a State exchange plan. Monthly Penalty in 2014: Number of credit employees x $250 (subject to cap in the amount described in the first penalty, above). After 2014, the amount of the penalty is indexed for inflation.
TAX ISSUES
Impact
Individuals
Effective Date
2013
1/1/13
Effective Date 2014

Employers with 50+ full-time equivalent employees (FTEE). A FTEE is determined by dividing the aggregate number of hours worked by part-time employees in a month by 120. The number of FTEEs is reduced by 30 and part-time employees are not counted for penalty assessment purposes. 1/1/14
28
10/18/2011
Provision
Free Choice Vouchers. Employers who offer minimum essential coverage to employees and pay any portion of the cost must provide free choice vouchers to certain qualifying employees (those exempt from the individual mandate, but do not qualify for premium subsidies). Qualified employees include any employee: 1. Whose required contribution for minimum essential coverage is between 8 and 9.8% of household income; 2. Whose household income does not exceed 400% of the FPL; and 3. Who does not participate in the employers health plan. The amount of the voucher includes what the employer would have paid to cover the employee in its plan. The employer pays these amounts to the Exchange plan in which the employee is enrolled. The entire cost of the voucher is deductible by the employer. Any excess over the cost of the premium for coverage through the Exchange is paid to the employee as taxable compensation. Premium Assistance Tax Credit. Taxpayers with family income of 400% of the federal poverty level (FPL) or less, and whose employers fail to offer minimum essential coverage at an affordable rate (see above), are entitled to a tax credit for coverage purchased through a State exchange. The amount of the credit is based upon premium cost and family income, but starts at the amount by which premiums exceed 2% of family income if the income is at or below 100% of FPL. At 400% of FPL the credit is the amount by which premiums exceed 9.5% of income. The credit is refundable, payable in advance, and remitted directly to the insurer.
TAX ISSUES
Impact
All qualifying employers
Effective Date
2014
1/1/14
Individuals with family income at or below 400% of the Federal Poverty Level
1/1/14
29
10/18/2011
Provision
Excise Tax on High Cost Employer-Sponsored Health Coverage. A 40% excise tax will be imposed on the amount paid for high cost employer-sponsored health insurance coverage exceeding certain threshold levels ($10,200/individuals; $27,500/family)[indexed]. The tax is imposed on health insurance issuers, plan administrators (for self-insured plans), or employers making contributions (HSAs and MSAs). The tax is calculated using overall cost of insurance, including premium costs and employer/employee contributions, but excludes stand-alone dental and vision plan coverage.
TAX ISSUES
Impact
All-sized employers
Effective Date
2018
1/1/18
30
10/18/2011
(ALSO SEE EMPLOYER/PLAN SPONSOR ISSUES, TAX ISSUES & INDIVIDUAL RESPONSIBILITY)
INSURANCE ISSUES
31
10/18/2011
(also see Employer/Plan Sponsor Issues, Tax Issues and Individual Responsibility)
Provision
Extension of Dependent Coverage Health plans that provide dependent coverage must continue to make such coverage available to an adult child up to age 26. For this purpose, a dependent includes a biological child, a step child, an adopted child or a foster child. Coverage must be available without regard to the childs marital status, or whether the child can be claimed as a dependent. Older-aged dependents cannot be subject to a surcharge, premium penalty, or any other plan differential, unless the differential is imposed on all dependents under the plan. An insurer is allowed to charge a differential for tiers of coverage (self, self + one, self + two, etc.). An older-aged dependents enrollment must be effective as of the first day of the first plan year beginning on or after 9/23/10.
INSURANCE ISSUES
Impact
Individual and Group Plans
The extension of dependent coverage does not apply to HIPAA-exempt programs, limited scope dental and vision plans, and stand alone retiree-only plans. Grandfathered Plan Exception: Older-aged dependent coverage must be available to an adult child up to age 26, unless he/she has access to other employer-provided coverage; this exception expires for plan years beginning on or after January 1, 2014
Effective Date
2010

Coverage for Preventive Health Services. Health plans must provide coverage for certain maternal and preventive health services, as well as evidence-based items or services recommended by the U.S. Preventive Services Task Force, the Advisory Committee on Immunization Practices as adopted by the Director of the CDCP and guidelines supported by the HRSA, without imposing any cost sharing requirements when the services are delivered by in-network providers. Choice of Primary Care Provider. If a health plan requires designation of a primary care provider (PCP), a participant must be allowed to designate a participating in-network PCP, who is available to accept him/her. A pediatrician can be designated as a childs PCP.

Preventive Health Services (7/15/10) Preventive Care Coverage Expanded to Include Womens Health Services (8/3/11) Patient's Bill of Rights (6/23/10) New Model Notices Issued (7/12/10)
Individual and Group plans
32
10/18/2011
Provision
Direct Access to OB/GYN Services. Health plans must provide direct access to OB/GYN providers, without prior authorization or a referral from the individuals primary care physician. Plans may require the OB/GYN provider to agree or adhere to the plans policies and procedures relating to referrals, obtaining prior authorization, and providing services, pursuant to a treatment plan. Access to Emergency Room Services. Health plans that provide coverage for hospital emergency room services must also cover emergency services without prior authorization, even if the emergency services are provided on an out-of-network basis. Plans cannot impose limitations on coverage or greater cost sharing requirements for out-of-network emergency services than those that apply to in-network services. Ban on Annual and Lifetime Limits. Health plans, including grandfathered plans, are prohibited from establishing lifetime limits and unreasonable annual limits on the dollar value of essential benefits (to be defined by regulations) for a participant or beneficiary. Plans are allowed to impose limits on non-essential benefits. A change in annual or lifetime limits can cause a plan to lose grandfathered status. Special Enrollment Period. A special enrollment opportunity must be made available to individuals whose coverage has dropped due to reaching the plans lifetime limit. The impacted individual must be allowed to enroll in any of the benefit packages offered by the employer, as long as the eligibility criteria are met. The enrollment period must be for a minimum of 30 days.
INSURANCE ISSUES
Impact
Effective Date
2010


Patient's Bill of Rights (6/23/10)

Patients Bill of Rights (6/23/10) New Model Notices Issued (7/12/10) Mini-Med Plan Relief from Annual Limit Restriction Offered (9/21/10) Relief for Stand-Alone Health Reimbursement Arrangements (8/23/11) Update: Mini-Med Plan Waivers (6/22/11) ACA Updates: CLASS Act Suspended, Increase in ERRP Cost Thresholds and Amounts, and What Are Essential Benefits? (10/17/11)
33
10/18/2011
Provision
Lifetime Limits (continued)
Mini-Med Plan Waivers. Mini-med plans in existence prior to 9/23/10 may apply for a waiver of the annual limits. The waivers will not be allowed after 1/2/14. The waiver is only granted for one plan year at a time and plans must request a waiver for each subsequent plan year. Ban on Rescissions. Health plans, including grandfathered group plans, cannot rescind such plan or coverage once an enrollee is covered under the plan, except in the event of fraud or intentional misrepresentation of material fact. Cancellation can be retroactive for the failure to pay premium. Plans must provide 30 days advance written notice to each participant who would be affected before coverage may be rescinded. Ban on Preexisting Condition Exclusions. Health plans, including grandfathered plans, are prohibited from imposing preexisting condition exclusions on enrollees under 19. Plan exclusions can still be imposed; however, the imposition of a new exclusion may cause a plan to lose grandfathered status. Beginning 1/1/14, preexisting condition exclusions cannot be imposed on anyone. Individual and Group Plans
(N/A to HIPAA-exempt programs, limited scope dental and vision plans, and stand alone retiree-only plans)
INSURANCE ISSUES
Impact
Effective Date
2010
Patients Bill of Rights (6/23/10) Agencies Issue PPACA Clarifications (10/12/10) Patients Bill of Rights (6/23/10)

34
10/18/2011
Provision
Medical Loss Ratio. Insurers in the individual and group markets, including grandfathered plans, are required to provide an annual rebate to each enrollee if the ratio of the amount of premium revenue expended on costs related to reimbursement for clinical services and activities that improve health care quality versus the total amount of premium revenue is less than: 85% for insurers in the large group market 80% for insurers in the small group or individual markets Beginning January 1, 2014 the rebate amount will be based on averages for each of the previous 3 years for the plan. CLASS Act: Voluntary, Self-Funded Long-Term Insurance Program. HHS will establish a voluntary long term care insurance program for purchasing community living assistance services and supports (CLASS program). An individual would be required to contribute to the program for 5 years (vesting period) before benefits (up to $50/day cash benefit) are available. The payments can be used to purchase non-medical services and support necessary to maintain community residence, including, home modifications, assistive technology, accessible transportation, homemaker services, respite care, personal assistance services, home care aides, and nursing support. The program is financed entirely through voluntary payroll deductions. All working adults will be automatically enrolled in the program, unless they choose to opt-out. Employers can voluntarily choose to provide enrollment tools and process the premiums for the program.
INSURANCE ISSUES
Impact
Plans in the large group, small group and individual markets, including grandfathered plans. These restrictions do not apply to self-insured plans.
Effective Date
2011
1/1/11
All-sized employers
This provision has been suspended
ACA Updates: CLASS Act Suspended, Increase in ERRP Cost Thresholds and Amounts, and What Are Essential Benefits? (10/17/11)
35
10/18/2011
Provision
Patient-Centered Outcomes Research Fee. Insurers must pay a fee of $2 ($1 for policy years ending during fiscal year 2013) multiplied by the average number of lives covered under the policy. The fee must be paid by insurers of fully-insured plans and employers of self-funded plans. The fees will be used to measure patient-centered outcomes. Rating Restrictions. Insurers in the individual and small group markets may only vary premium rates based upon: 1. Individual or family coverage; 2. The rating area; 3. Age (rates cant vary by more than 3 to 1); and 4. Tobacco use (rates cant vary by more than 1.5 to 1). If a State offers large group coverage through the Exchange, insurers in the large group market are also required to comply with the rating restrictions. Coverage for Individuals Participating in Approved Clinical Trials. Individual and group health plans cannot deny individual participation in approved clinical trials and must cover routine costs in approved clinical trials. Insurers are not required to cover: The investigational item, device or service; Items and services that are provided solely to satisfy data collection and analysis needs that are not used in the direct clinical management of the patient; or A service that is clearly inconsistent with widely accepted and established standards of care for a particular diagnosis.
INSURANCE ISSUES
Impact
Insurers of fully-insured plans and Employers of self-funded plans.
Effective Date
2012
Plan years ending after 9/30/12
Effective Date 2014

Insurers in the Individual and Small Group (<100 lives) Markets Insurers in the Large Group Market (100+ lives), if the State allows Large Group coverage through the Exchange. These restrictions N/A to self-insured plans. Individual and Group Plans
36
10/18/2011
Provision
Ban on Excessive Waiting Periods. Individual and group health plans cannot require enrollment waiting periods in excess 90 days.
INSURANCE ISSUES
Impact
Effective Date
2014
Ban on Discrimination Based on Health Status. Insurers are prohibited from imposing discriminatory eligibility rules based on any of the following health status-related factors, relating to the covered individual or his/her dependent: Health status; Medical condition (including both physical and mental illnesses); Claims experience; Receipt of health care; Medical history; Genetic information; Evidence of insurability (including conditions arising out of acts of domestic violence). Disability; or Any other health status-related factor determined discriminatory by HHS. Health Insurance Exchange. Health Insurance Exchanges will be established by the individual states to facilitate the purchase of qualified health plans by individuals and assist small employers in facilitating the enrollment of their employees (SHOP Exchange). A state may choose to combine the Individual and HSOP Exchanges if the Exchange has adequate resources. Limited Scope dental benefit plans may be offered through the Exchange if the plan provides pediatric dental benefits.
Insurers in the Individual and Small Group Markets Beginning in 2017, Large Groups may be allowed to participate in the Exchange
1/1/14 for Individual and Small Group Plans 2017 for Large Group Plans
37
10/18/2011
Provision
Health Insurance Exchange, (continued)
Participating Insurer Requirements Plans seeking to participate in the Exchange are required to submit justification for any premium increases to the Exchange prior to implementing the change and prominently post the information on their websites. Plans are required to provide information in a timely manner to individuals regarding the amount of cost-sharing under the plan or coverage the individual would be responsible for paying with respect to the furnishing of a specific item or service by a participating provider. Plans are required to make this information available on their websites. Plans are also required to disclose the following information in plain language: 1. Claims payment policies and practices; 2. Periodic financial disclosures; 3. Data on enrollment; 4. Data on disenrollment; 5. Data on the number of claims that are denied; 6. Data on rating practices; 7. Information on cost-sharing and payments with respect to any out-of network coverage; and 8. Information on enrollee and participant rights Rating Requirements Individual Market: Insurers are required to consider all enrollees in all health plans (other than grandfathered health plans) offered in the individual market, including those who do not enroll in individual plans through the Exchange to be members of a single risk pool.
INSURANCE ISSUES
Impact
Effective Date
2014
38
10/18/2011
Provision
Health Insurance Exchange, (continued)
Small Group Market: Insurers are required to consider all enrollees in all health plans (other than grandfathered health plans) offered in the small group market, including those who do not enroll in small group plans through the Exchange to be members of a single risk pool. Beginning in 2017, individual States may allow large groups to participate in the Exchange. Insurers are not required to offer large group plans through the Exchange.
INSURANCE ISSUES
Impact
Effective Date
2014
Employer Size Defined
Small Employers: Those with at least 1 but not more than 100 employees. Large Employers: Those with at least 101 employees. For plan years starting before 1/1/16, States may elect to define Small Employers as one with 1-50 employees; Large Employers as one with 51+ employees. Insurers are allowed to offer plans to qualified individuals and qualified employers outside of the Exchange.
Effective Date 2016

Health Care Choice Compacts. Insurers are permitted to sell insurance in states participating in health care choice compacts, provided the insurer is licensed in each state in which it offers the plan under the compact. Individual plans 1/1/16
39
10/18/2011
Provision
Excise Tax on High Cost Employer-Sponsored Health Coverage. A 40% excise tax will be imposed on the value of high cost employer sponsored health coverage (Cadillac health plans) exceeding certain threshold limits ($10,200/individual; $27,500/family) [indexed]. The employer calculates the excise tax and provides to the insurer or third party administrator, who then pays the tax.
INSURANCE ISSUES
Impact
Employer sponsored group health plans
Effective Date
2018
1/1/18
40
10/18/2011
(ALSO SEE TAX ISSUES, INSURANCE ISSUES & MEDICARE ISSUES)
INDIVIDUAL RESPONSIBILITY
41
10/18/2011
(also see Tax Issues, insurance Issues and Medicare Issues)

Provision
Temporary High Risk Pool. HHS established a Pre-existing Condition Insurance Plan (PCIP) to assist individuals who have been denied insurance coverage due to a preexisting condition. Generally, to be eligible for the pool, the individual must: 1. Be a US citizen; 2. Be a resident of the State that falls within the service area of a PCIP; 3. Not been covered under creditable coverage (generally defined as most individual or group health plan coverage) during the 6month period, prior to the date on which the individual is applying for PCIP coverage; and 4. Have a pre-existing condition. The HHS website provides an in-depth overview of what PCIPs are available to individuals, including details relating to eligibility, federal and state-run programs, benefits and premium rates, and FAQs. Sunset date. The PCIP program is scheduled to sunset on January 1, 2014. OTC Medications Are Not Qualified Expenses. FSAs, HRAs, Archer MSAs, and HSAs can no longer reimburse the cost of over-the-counter (OTC) medications, except for insulin or prescribed OTC medications. Debit cards for FSAs and HRAs can only be used for prescribed OTC medications, if certain conditions met.
Impact
Individuals
Effective Date
2010
6/21/10

Pre-existing Condition Insurance Plan (PCIP) (8/19/10)
Effective Date 2011

Individuals 1/1/11
Over-the-Counter Medication Prohibition Clarified (9/7/10) Limited Relief for Debit Card Purchases of OTC Medications (1/10/11)
42
10/18/2011

Provision
Increased Penalty for Nonqualified HSA or Archer MSA Distributions. Penalties on nonqualified HSA distributions increase from 10% to 20%. The penalty for nonqualified distributions from Archer MSAs increases from 15% to 20%. FSA Cap. The maximum amount of salary contributions to a flexible medical spending account is capped at $2,500. Increased Medicare (Hospital Insurance) Tax on High-Income Individuals. The Medicare portion of an individuals FICA tax is increased (by 0.9%), from 1.45% to 2.35%, to the extent an individuals wages exceed $250,000 for married filing jointly, $200,000 for single taxpayers, or $125,000 for married filing separately. Employer must withhold on all wages >$200,000 Employee liable regardless of employer withholding Counted for estimated tax payments Unearned Income Medicare Contribution. A Medicare tax is imposed on high income individuals equal to 3.8% of the lesser of an individuals (1) net investment income (capital gains, interest, dividends, annuities, rent and gross income from passive activities) or (2) modified adjusted gross income in excess of $250,000 for married filing jointly, $200,000 for single taxpayers, or $125,000 for married filing separately. No employer withholding requirement Counted for estimated tax payments Net investment income excludes income from a qualified retirement plan and amounts subject to self-employment taxes.
Impact
Individuals
Effective Date
2011
1/1/11
Effective Date 2013

Individuals participating in an employer-sponsored FSA plan Individuals with wages of $250,000 (married filing jointly), $200,000 (single), or $125,000 (married filing separately) 1/1/13 1/1/13
1/1/13
43
10/18/2011

Provision
Modification of Itemized Deduction for Medical Expenses. The threshold for deductibility of unreimbursed medical expenses is increased from 7.5% to 10% of AGI. The 7.5% threshold is retained through 2016 for individuals who are at least 65 years old by year end. Individual Mandate. Individuals are required to maintain minimum essential health coverage for themselves and their dependents. Options for Coverage: Individuals with household income <133% of FPL may be eligible for minimum essential coverage through Medicaid. Individuals who are between 134%-400% of FPL may be eligible for premium assistance or cost sharing possibilities. Individuals with household income <400% of FPL would be entitled to a Free Choice Voucher, if their employer offers coverage with a cost of between 8% to 9.5% of the individuals household income and the individual does not participate in the employers plan. See Employer/Plan Sponsor chart for details about the Free Choice Voucher.
Impact
Individuals
Effective Date
2013
1/1/13
Effective Date 2014

All U.S. citizens, nationals and lawfully present aliens, except individuals meeting certain religious or immigration exemptions, and incarcerated individuals. Exceptions: Members of Indian Tribes; Individuals with short coverage gaps; Individuals suffering a hardship; Individuals with household modified AGI below the filing threshold. Taxpayers whose income equals or exceeds 100% but does not exceed 400% of the FPL for the size of family involved. 1/1/14
Exchange Subsidy. Qualified taxpayers who get health insurance coverage by enrolling in a qualified health plan are eligible for a refundable tax credit.
1/1/14
44
10/18/2011
MEDICARE ISSUES
45
10/18/2011
MEDICARE ISSUES
Provision
Medicare Coverage Gap Discount Program Coverage Gap Rebate for 2010. Retirees who enter the coverage gap or donut hole will receive a one-time $250 rebate from the Medicare Prescription Drug Account no later than the 15th day of the third month following the end of the quarter when they enter the donut hole. Medicare Coverage Gap Discount Program. In order to have their drugs covered by Medicare Part D, pharmaceutical manufacturers must provide a 50% discount off the negotiated price for brand name drugs under plan formularies for beneficiaries who enter the coverage gap. Beneficiaries would be eligible for the discount if they dont qualify for low-income subsidies, do not have employer-sponsored coverage, or do not pay higher, income-related Medicare premiums under Parts B or D. Increased Medicare (Hospital Insurance) Tax on High-Income Individuals. The Medicare portion of an individuals FICA tax is increased (by 0.9%), from 1.45% to 2.35%, to the extent an individuals wages exceed $250,000 for married filing jointly, $200,000 for single taxpayers, or $125,000 for married filing separately. Employer must withhold on all wages >$200,000 Employee liable regardless of employer withholding Counted for estimated tax payments
Impact
Medicare Part D Enrollees
Effective Date
2010
3/23/10
Effective Date 2011

Medicare Part D Enrollees 1/1/11
Effective Date 2013

Individuals with wages of $250,000 (married filing jointly), $200,000 (single), or $125,000 (married filing separately) 1/1/13
46
10/18/2011
MEDICARE ISSUES
Provision
Unearned Income Medicare Contribution. A Medicare tax is imposed on high income individuals, equal to 3.8% of the lesser of an individuals: Net investment income (capital gains, interest, dividends, annuities, rent and gross income from passive activities); or Modified AGI in excess of $250,000 for married filing jointly, $200,000 for single taxpayers, or $125,000 for married filing separately. No employer withholding requirement Counted for estimated tax payments Net investment income excludes income from a qualified retirement plan and amounts subject to self-employment taxes.
Impact
Effective Date
2013
1/1/13
The information contained herein is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. The information contained herein is provided as general guidance and may be affected by changes in law or regulation. This information is not intended to replace or substitute for accounting or other professional advice. You must consult your own attorney or tax advisor for assistance in specific situations. This information is provided as-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein. As required by U.S. Treasury rules, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained herein is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any penalties that may be imposed by the Internal Revenue Service.
47
10/18/2011

CBIZ Matrix Rev 101811v2reduced

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A TOOL FOR UNDERSTANDING THE IMPACT OF HEALTH CARE REFORM

CBIZ HEALTH REFORM MATRIX

EMPLOYER/PLAN SPONSOR ISSUES

EMPLOYER/PLAN SPONSOR ISSUES

Effective Date 2010

Related CBIZ Health Reform Bulletin

EMPLOYER/PLAN SPONSOR ISSUES

Effective Date 2010

Related CBIZ Health Reform Bulletin

Plan years beginning on or after 9/23/10

Patients Bill of Rights (6/23/10)

EMPLOYER/PLAN SPONSOR ISSUES

Effective Date 2010

Related CBIZ Health Reform Bulletin

Plan years beginning on or after 9/23/10

EMPLOYER/PLAN SPONSOR ISSUES

Effective Date 2010

Related CBIZ Health Reform Bulletin

and Appeals Enforcement

EMPLOYER/PLAN SPONSOR ISSUES

Effective Date 2010

Related CBIZ Health Reform Bulletin

Plan years beginning on or after 9/23/10

Patient's Bill of Rights (6/23/10) New Model Notices Issued (7/12/10)

Plan years beginning on or after 9/23/10

Patient's Bill of Rights (6/23/10)

Agencies Issue Additional PPACA Clarifications (12/23/10)

EMPLOYER/PLAN SPONSOR ISSUES

Related CBIZ Health Reform Bulletin

Employers with 100 or fewer employees

Plan years beginning on or after 1/1/11

Simple Cafeteria Plans (9/1/10)

EMPLOYER/PLAN SPONSOR ISSUES

Related CBIZ Health Reform Bulletin

This provision has been suspended

EMPLOYER/PLAN SPONSOR ISSUES

Related CBIZ Health Reform Bulletin

Insurers of fully-insured plans and All-sized employers of self-funded plans

Plan years beginning 9/30/12

Effective Date 2013

Notice due 3/1/13 Requirement for automatically enrolling is to be clarified.

EMPLOYER/PLAN SPONSOR ISSUES

Related CBIZ Health Reform Bulletin

EMPLOYER/PLAN SPONSOR ISSUES

Related CBIZ Health Reform Bulletin

Plan years beginning on or after 1/1/14

Plan years beginning on or after 1/1/14

EMPLOYER/PLAN SPONSOR ISSUES

Related CBIZ Health Reform Bulletin

Plan years beginning on or after 1/1/14

Plan years beginning on or after 1/1/14

EMPLOYER/PLAN SPONSOR ISSUES

Related CBIZ Health Reform Bulletin

REPORTING AND DISCLOSURE ISSUES

REPORTING AND DISCLOSURE ISSUES

Related CBIZ Health Reform Bulletin

REPORTING AND DISCLOSURE ISSUES

Related CBIZ Health Reform Bulletin

Plan years beginning on or after 9/23/10

Plan years beginning on or after 9/23/10

REPORTING AND DISCLOSURE ISSUES

Related CBIZ Health Reform Bulletin

Plan years beginning on or after 9/23/10