Health Care Reform is Here

Health care reform became law on March 23. There are many questions that have yet to be answered, and IQHSA.com has been hard at work to determine how health care reform will affect you and your business. Many specifics of the different reform provisions remain undefined. Due to how the law was written, there is ambiguity and a need for regulatory agencies to provide clarification. In the months and years ahead, we expect federal agencies to issue regulations and guidance on many aspects of the legislation.

Here are seven key health care reform components effective this year:

1. Small Business Tax Credits – Small businesses up to 25 employees could be eligible for tax credits for the coverage they offer employees.

2. Dependent Coverage – Many health insurance carriers have been early adopters of the law that makes health insurance coverage available to adult children up to age 26. These dependent coverage benefits are now available.

3. Grandfathering of Existing Policies – This is the “keep the plan you’re on” language used during the reform debate. The law provides that grandfathered plans – plans that were in effect at the time the law was signed on March 23, 2010 – do not need to comply with certain reform requirements (although many apply to grandfathered plans as well). Regulations are expected to clarify what changes can be made to plans without jeopardizing grandfathered status.

4. High Risk Pool – The new law requires that health insurers must offer coverage to anyone regardless of health status, and that goes into effect in 2014. High-risk pools are being developed in the interim to insure those who don’t currently qualify for health insurance. While some states already have high-risk pools, Arizona doesn’t. Gov. Jan Brewer has already replied to the Department of Health and Human Services that Arizona – which had the option to create its own high-risk pool or defer to a national pool – cannot afford to create one.

5. Mini Exchange – Now commonly referred to as “The Web portal,” this is a first step in the reform legislation that aims to assist consumers by providing private health insurance coverage information (the full exchange will be activated in 2014). Regulations have been issued that define the information insurers and others are required to submit to HHS and many health insurance carriers are compiling the information necessary to meet the May 21, 2010, submission deadline for Phase I.

6. Reinsurance for Early Retirees – Health care reform legislation provides for the establishment of a temporary reinsurance program to reimburse participating employment based plans for a portion of the cost of providing health insurance coverage to early retirees. Final regulations have recently been issued that provide more details about the program and the application and claims submission processes.

7. Medical Loss Ratios – The affect of the federal law aimed at keeping health insurers’ administrative costs in check is unclear, in part because federal definitions of how carriers will have to calculate medical loss ratios haven’t been determined. We will continue to bring you all the latest on health care reform but in the meantime we invite your comments and questions at IQHSA.com.

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