It’s difficult to turn on the TV or read a news headline lately without coming across a story related to health care, and specifically, health care reform. Ever since the health care reform bill, known as PPACA, became effective as of March 23, 2010, health care is the nation’s new hot topic. The amount of information out there can get overwhelming and it’s hard to know how and if, any of it potentially affects you and your family.
Below are a few of the reform changes that have already gone into effect. Keep in mind that health care reform changes are effective in stages, with some provisions effective immediately and others not being implemented until 2014, or as late as 2018. Also, remember that not all PPACA provisions apply similarly to all plans; for example “grandfathered” plans may not have to comply with certain requirements.
Check with your plan administrator to see how and if these provisions may apply to coverage you receive.
Coverage of children up to age 26
Children may remain covered on their parent’s employer health plan until age 26, regardless of whether they are financially dependent on their parents, married or unmarried, live at home, or are full time students.
This provision has been effective for plan years beginning on or after September 23, 2010. So for example, if your plan year begins on January 1, this provision would have been effective since 2011. Additionally, the value of the coverage that the child is receiving is excluded from the employee’s taxable income through the end of the tax year in which the child turns 26 (i.e. no imputed income to the employee).
Select preventive services for you and your covered dependents may be available at no additional cost to you under PPACA. (Click here for a list of the preventive services that may be covered under your plan.)
The list of covered preventive services includes services for adults and specific services for women and children. This means that you may not be responsible for paying copays, deductibles or coinsurance for these services.
Lifetime and annual limits
Prior to PPACA, many plans set certain lifetime and annual limits for coverage. For example, if your plan had a $2 million lifetime limit or a $750,000 lifetime transplant limit, this meant that you were responsible for any amounts that you incurred on that plan over the limit threshold. PPACA prohibits most lifetime limits.
Similarly, if prior to PPACA your employer plan featured an annual dollar limit of, for example, $500,000, you would be responsible for paying out-of-pocket for any services that you incurred in excess of that amount. For plan years beginning after September 23, 2010, but prior to January 1, 2014, PPACA allowed employers to continue annual dollar limits on essential health benefits as long as the limits were over certain thresholds. After January 1, 2014, plans are generally not allowed to set annual dollar limits on essential health benefits.
What are essential health benefits? These include services within the following ten categories: ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services (including behavioral health treatment), prescription drugs, rehabilitative and habilitative services and devices, laboratory services, preventive and wellness services and chronic disease management, and pediatric services, including oral and vision care.
Keep in mind that PPACA prohibits limits on annual dollar limits, but other types of annual limits may still be permissible. For example, if your plan covers chiropractic visits, the employer can still limit the number of these visits per year that would be covered under your plan. Employers can also keep limits on non-essential health benefits.
Changes in HSA/FSA pre-tax reimbursements
You may be offered a Health Savings Account (HSA), a Health Reimbursement Account (HRA), or a Flexible Spending Account (FSA) through your employer. These are tax-advantaged accounts that reimburse you for certain expenses on a pre-tax basis.
Effective January 1, 2011, unless you have a physician’s prescription, over-the-counter medications are not eligible for reimbursement under these types of accounts. Certain exceptions do exist, such as for insulin. Additionally, in 2013 there is a $2,500 limit on contributions to health care FSAs.
The Department of Health and Human Resources has set up a website dedicated to helping you navigate health care and the new health care law. For additional information about how health care reform may affect you, visit healthcare.gov
Your individual insurance carrier may also have helpful information on their website regarding health care reform changes.
This post was written by Julie Borisov from Colorado PERA.
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