Part One Highlights
Taken from an email from AOI (Associated Oregon Industries)

The New Law Has Important Provisions That Go into Effect in 2010:

Most of the new Patient Protection and Affordability Act will be implemented over the next four years, but the law has important provisions that go into effect in 2010. These provisions will affect existing health care plans, as well as new plans initiated after the effective date of the law.

Because of the scope of the new law, this article covers only its initial effects in 2010 and 2011. Information about implementation after 2011 will be provided in future articles.

Please note that this information is not intended to be a comprehensive review of the law; rather, it provides highlights of greatest interest to employers.

By October 1, 2010:
No Lifetime Caps:Health plans will no longer be allowed to set lifetime or annual caps on benefit.

No Rescission:Plans will be prohibited from cancelling coverage for plan members who become ill. The law allows for exceptions if a member enters into the plan through fraud or intentional misrepresentation of health conditions.

Children's' Coverage:All plans, including individual plans, will be prohibited from denying coverage to dependent children (up to age 19) based on pre-existing health conditions.

By December 31, 2010:
Dependent Coverage:Children who are not eligible for coverage under another employer's health plan may remain on their parents' insurance plans until they reach the age of 26.

Premium Increase/Rate Review:The Department of Health and Human Services (HHS) is responsible for establishing a process for reviewing increases in health plan premiums and requiring plans to justify those increases. All premium rate increases will be subject to the approval of the Oregon Insurance Division, based on standards set by the Secretary of HHS.

Medical Loss Ratios:Insurers will be required to report their medical loss ratios. The report must include the proportion of premiums collected that is spent on clinical services, quality and other related health care costs. These amounts will be used to calculate a medical/loss ratio. Large health plans (a group health plan for businesses with 101 or more employees) must maintain a medical/loss ratio of at least 85%, and small group plans (under 100 people) must maintain an 80% medical/loss ratio. Beginning in 2011, health plans that do not meet these medical/loss ratio standards will be required to pay premium rebates to policyholders.

Small Employer Tax Credit, Phase I:Employers with no more than 25 employees and average annual wages of less than $50,000 qualify for a tax credit to assist in the purchase of health insurance for employees. Phase I applies to tax years 2010 through 2013, providing a credit of up to 35% of the employer's contribution toward the employee's health insurance premium if the employer contributes at least 50% of the total premium cost or 50% of a benchmark premium.

The full credit will be available to employers with 10 or fewer employees and average annual wages of less than $25,000. The credit phases out as firm size and average wage increases. Tax-exempt small businesses meeting these requirements are eligible for tax credits of up to 25% of the employer's contribution toward the employee's health insurance premium.

Temporary Reinsurance Program for Employers:This reinsurance program is intended to provide health insurance coverage to retirees over age 55 that are not eligible for Medicare. The program will reimburse employers or insurers for 80% of retiree claims between $15,000 and $90,000. This program runs through January 1, 2014.

Preventive Services:Plans are required to remove all cost-sharing obligations for preventive services (those determined as qualified services by the U.S. Preventive Services Task Force), including recommended immunizations, preventive care for infants, children and adolescents, and additional preventive care and screenings for women.

Appeals Process: Requires health plans to offer a mandatory internal and external claims appeal process.

Other Changes/Plan Require-ments:For new plans, eliminates preauthorization requirement for emergency services and OB-GYN services and referrals; provides enrollee choice of primary care physician or pediatrician; imposes annual cost-sharing limits for non-preventive services under all plans to high-deductible plan limits; and prohibits discrimination based on salary.

Collectively Bargained Benefits: For coverage under a Collective Bargaining Agreement, all new coverage and cost-sharing rules will apply upon termination of the agreement as it relates to coverage, as long as the agreement was ratified prior to March 23 (the day the law took effect). Any coverage amendments to comply with the new rules are not viewed as terminating the agreement.

Beginning in 2011: 
New Disclosure Requirements:All U.S. health insurance plans must start to comply with new disclosure requirements, most of which are yet to be determined in regulations from federal agencies.

Some of these requirements are already clear - large employers must report:

Over-the-Counter Drugs:The exclusion for over-the-counter-drugs from flexible spending accounts and health savings accounts takes effect. Drugs not prescribed by a doctor will no longer be reimbursable through an HRA or FSA. Also, they may no longer be reimbursed on a tax-free basis through an HSA or Archer Medical Savings Account. The changes also increase the tax on distributions from an HSA or an Archer MSA that are not used for qualified medical expenses to 20% (from 10% for HSAs and 15% for Archer MSAs) of the disbursed amount.

Small Employer Wellness Grants:Grant funding (up to 5 years) will be available for small employers that establish wellness programs.

Employer W-2 Reporting: Employers are required to begin reporting value of their health benefits on W-2s.

Voluntary Long Term Insurance: The Act establishes a national, voluntary insurance program for the purchase of community living services and supports. Following a five-year vesting period, the program will provide individuals with functional limitations, a cash benefit averaging $50 per day to purchase non-medical services and supports necessary to maintain community residence.

This program is financed through voluntary payroll deductions; however, all working adults are responsible for opting out, as they will be automatically enrolled in the program. Employers will therefore need to institute automatic payroll deductions for their employees for Community Living Assistance Services and Supports (CLASS) coverage.