The ongoing implementation of federal health care reform legislation in the workplace naturally prompts questions from employees. Here are some of the common questions likely to arise, along with the answers:
When do health care reforms become effective? The federal health care reform law was enacted in March 2010. Changes will continue to go into effect over a period of years. Some changes are already in effect, such as the prohibition on pre-existing condition exclusions for children under age 19. Other changes will go into effect in coming years, such as the mandate for individuals to buy health insurance or pay a penalty.
Will people be allowed to keep their current health coverage? Yes. Nothing in the law requires a person to terminate coverage they had in place on the date the law was passed. Due to new requirements, however, coverage could change, and employers aren’t required to offer the same coverage in the future. If an employer’s health plan was in place on March 23, 2010 and the employer hasn’t made certain changes to the plan, the plan could be considered grandfathered. Grandfathered plans aren’t subject to many, but not all, of the provisions of the health care reform law.
Are individuals required to have health coverage? Not yet. In 2014, though, most U.S. citizens will be required to obtain health insurance coverage or face a penalty. There are some exceptions for low-income individuals and those unable to obtain affordable coverage.
What are the penalties for individuals who don’t have health coverage? Starting in 2014, the penalties for individuals who aren’t enrolled in health coverage will be the greater of a flat dollar amount or a percentage of income. For 2014, the minimum flat dollar penalty is $95 and percentage of income is 1 percent. The penalties increase to $395 or 2 percent of income in 2015 and $695 or 2.5 percent of income in 2016. The penalty subsequently will be indexed for inflation. The penalty for children is half of that for an adult. A family’s total penalty generally can’t exceed 300 percent of the adult flat dollar penalty or national average annual premium for the “bronze” level of coverage through an insurance exchange.
Does health care reform affect dependent care spending accounts and health flexible spending accounts? Dependent daycare spending accounts are capped at $5,000 annually. For 2013, the annual limit for health flexible spending account contributions is capped at $2,500.
How long can my adult child remain covered on my health plan? Health plans are required to permit children to stay on family coverage until they turn 26. This applies to all plans in the individual market and non-grandfathered employer plans. It also applies to grandfathered employer plans. However, the plan sponsor could decide to exclude adult children from coverage when the adult child has access to other group coverage. Beginning in 2014, grandfathered plans must allow coverage for adult children up to age 26 even if they have access to other coverage through their employer. State requirements might differ.
Is coverage for my adult dependent taxable? The value of health plan coverage isn’t subject to federal tax for the employee or dependent. The health care reform law revised IRS code to clarify the cost of coverage for a taxpayer’s child is excluded from income through the end of the year in which the child turns 26. State requirements could differ.
Can I obtain coverage for my child who has a pre-existing condition? Both grandfathered and non-grandfathered health plans that cover children can’t deny coverage to your child under 19 years old based on a pre-existing condition.
What consumer protections will I get if I obtain insurance at work? Health plans may no longer place lifetime limits on what they’ll pay for your medical care and can only apply restricted annual benefit limits. Insurance companies may no longer arbitrarily cancel your policy when you get sick except in the cases of fraud or misrepresentation. Plans also must offer a straightforward and independent appeals process so you’re able to appeal decisions made by your health insurance company.
I have a pre-existing condition. How can I get coverage this year? If you’ve been uninsured for at least six months and have a pre-existing condition, you could obtain coverage through the high-risk pool program called Getting Us Covered (www.gettinguscovered.org). In Colorado, you also could be eligible for Cover Colorado (www.covercolorado.org).
When does free preventive care start and will it affect my plan? All non-grandfathered group health plans and plans in the individual market are required to provide coverage for preventive services. Recommended prevention and vaccination services must be covered without any deductibles or copayments. Seniors enrolled in Medicare no longer have to pay for proven preventive services. For plan years beginning on or after Aug. 1, 2012, non-grandfathered plans must offer additional preventive services for well-woman visits, breast-feeding support and contraception. There are exceptions to the contraceptive coverage requirements that apply to religious employers.