Wednesday, August 8, 2012

Making Sense of Health Care Reform for Your Nonprofit

NYCON's insurance subsidiary Council Services Plus (CS Plus) offers info, resources and direct insurance assistance to nonprofits across NYS. CS Plus only works with nonprofits, and has brought over $1 million in savings to nonprofit clients. Visit for more info or e-mail.
Health Care Reform: Are You Prepared?
The United States Supreme Court largely upheld President Obama's health care law, the Affordable Care Act in a mixed decision. The court's ruling, seen as one of the most significant in decade, is a crucial milestone for the law, allowing almost all of its far-reaching changes to roll forward. The decision did significantly restrict one major portion of the law: the expansion of Medicaid, the government health-insurance program for low-income and sick people. The ruling gives states more flexibility not to expand their Medicaid programs, without paying the same financial penalties that the law called for.
The legislation for the Patient Protection and Affordable Care Act (PPACA) will impose significant new responsibilities on employers, some of which are already effective. While further guidance is expected on the application of these requirements, the following provides a summary and timeline of key provisions of the PPACA. As employers look ahead to the implementation of the PPACA, CS Plus will be providing additional updates to provide clients with compliance strategies in connection with various components of the new law.
Summary of the Affordable Care Act
The Affordable Care Act (umbrella term for the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010) was passed by Congress in March 2010 to overhaul the health care system, expand affordable coverage, change insurance rules and create an online marketplace (exchange) in each state for the individual and small group markets.

Most U.S. citizens and legal residents will be required to have health insurance in 2014. Those without coverage would pay a tax penalty based on household income to be phased-in starting in 2014. Federal subsidies will be available to assist those who cannot afford to purchase coverage.

Large employers (50 or more full-time employees) will be required to "pay or play" starting in 2014.

Qualifying small employers (no more than 25 employees) are eligible for a tax credit for offering coverage beginning in 2010. The tax credit increases in 2014 if employers buy from the exchange, and then phases out in 2016.

How Health Reform will Impact Businesses
The Patient Protection and Affordable Care Act (PPACA) impacts businesses in several ways - from the types of benefits offered under insurance plans, to the ways employers conduct their businesses. Some provisions are already in effect and more will be implemented over the next several years.

General Impacts on Employer-Provided Coverage
There are several mandates from the Patient Protection and Affordable Care Act (PPACA) already in effect. View the Timeline below for more information on timing of provisions.

Some of the key mandates are below.
Grandfathering - "Grandfathering" allowed some plans to be exempt from some Health Care Reform provisions.
Lifetime Limits and Annual Limits - Law prohibits imposing annual limits on Essential Health Benefits and any lifetime dollar limits.
Medical Loss Ratio (MLR) Reporting - A Medical Loss Ratio or MLR is the percentage of premium dollars insurers spend to provide covered medical services and improve the quality of health care for their members.
No Pre-Existing Conditions Exclusions - As of September 2010 there are no pre-existing exclusions for children under age 19. Beginning in 2014, this provision applies to everyone, including adults.
Patient-centered Outcomes Research Fee - The Patient-Centered Outcomes Research Tax, also known as the Comparative Effectiveness Research Fee, is a fee paid to the government to fund Patient-Centered Outcomes Research Institute (PCORI) research.
Preventive Services - The Patient Protection and Affordable Care Act of 2010 (PPACA) requires health plans to cover designated preventive services without any member cost sharing.
Summary of Benefits Coverage - The Departments of Health and Human Services, Labor and Treasury recently issued final regulations requiring health plans to provide a SBC and Uniform Glossary that clearly explain benefits and coverage within a standardized template with uniform language.
W-2 reporting - PPACA contains a requirement for employers to report the cost of health coverage under an employer sponsored group health plan on an employees W-2 form. The cost includes both the cost paid by the employer and contributions from the employee.
Women's Preventive Services - The Patient Protection and Affordable Care Act (PPACA) requires health plans to cover designated women's preventive services without cost sharing for the member. Cost-sharing includes deductibles, copayments and coinsurance. Some of the benefits and services outlined in the women's preventive guidelines are already included within the existing PPACA preventive services requirements.
Establishment of Health Insurance Exchanges
On April 12, 2012 Governor Andrew M. Cuomo issued an Executive Order to establish a statewide Health Exchange. State-established health insurance exchanges must begin to operate on January 1, 2014. The Exchanges are virtual marketplaces that allow individuals and eligible employers to purchase health insurance. Initially in 2014, only employers with up to100 employees can purchase insurance for their employees through the Exchange. Prior to 2016, states can limit the size to businesses with up to 50 employees. Beginning in 2017, states can allow employers with more than 100 employees to purchase health insurance for their employees through the Exchange.

How Does Health Care Reform Affect Small Businesses?
In addition to the key provisions outlined, it's important to know that small businesses already have an opportunity to qualify for:
Small business tax credits - In an effort to help small employers offer affordable coverage to their employees, the Patient Protection and Affordable Care Act provides for tax credits for qualified small employers. These credits began in 2010. The credits increase in 2014, but are only available for coverage purchased on an Exchange. The small group tax credit sunsets in 2016.

It will take several years for changes to be enacted and regulations written. However it's important to begin to understand what will be happening in the near future versus long term changes.
HC Reform Timeline
To view a larger image of the timeline, CLICK HERE.

If you have any questions regarding this update, please contact Anthony DeCicco, Account Executive, Group Benefits at;
or by phone at (877) 501-4277, ext 123.