Things you need to know about Ohio Health Care Reform and Federal H.R. 3590 now signed into law.

As you know, there is much to talk about when we start talking about "Health Care Reform." I thought I would use our Spring E-Newsletter to communicate on what I consider to be the pressing parts of the reform. I promise to keep you updated on current events as they continue to unfold. If you have any questions please don’t hesitate to call our office and speak to me or an Ashley Representative. Due to some clarifications yet to come, I felt it better to update you on those parts of the reform when we know more definitive answers on how it will impact you.

Ohio Health Care Reform

1. State Continuation Coverage: The temporary extension to 15 months became effective for policies and contracts issued, delivered or renewed on or after February 25, 2010. This applies to groups with less than 20 FTE employees.

2. Continuation of Coverage for Unmarried Children Age Change: Insurers, health insuring corporations and public employee benefit plans must offer parents the opportunity to purchase coverage for their unmarried children up to age 28.

Contracts issues or renewed and plans established or modified on or after July 1, 2010, must provide for this new benefit.

Federal H.R. 3590

The first 6 months (after date of signature by the President):

1. Between now and September (2010), carriers and self-insured companies are required to redesign their plans to be in compliance with the new regulations. If you are insured, it is up to the carrier to make sure your plan is in compliance. You do not have to do anything at this time.

2. Insurance plans are required to carry married or unmarried dependents up to the age of 26 within 6 months of enactment (Oct 2010).

Note: The Ohio Department of Insurance has not made a determination if the Ohio Dependent law or this federal law will prevail at this time.

After the first 6 months (October 2010):

Six months from the date of legislation the carriers will have made modifications to your plans so that they are in compliance with the new law.

1. Any contracts written between now and 2014 which have restricted annual limits retain them until 2014 as long as no changes are made to the plan. After 2014 there will no longer be any annual limits.

2. Insurance plans are prohibited from imposing lifetime benefit limits.

3. Insurance plans will be prohibited from denying coverage to individuals under the age of 19 based on pre-existing conditions.

4. A temporary high risk pool will be established by ODI for individuals (older than 19) who are denied coverage based on pre-existing conditions.

5. Insurance plans will be required to cover preventive services without cost sharing.

6. Temporary reinsurance program will be created for employers providing coverage to retirees over 55 who are not eligible for Medicare. More details are forthcoming; it will be in the form of a tax credit to employers who already provide this benefit to early retirees.

7. First phase of Small Business Tax Credit begins: Small businesses with less than 25 employees (FTEs) and average annual wages of less than $50,000 are eligible for tax credits of up to 35% of the employer’s contribution toward the employee’s health insurance premium. Employers must subsidize at least 50% of their employees’ premiums in order to be eligible for the tax credit. The credit is retroactive from January 1, 2010 through 2013.

8. Wellness Programs for small groups: 30% premium incentive for employers to provide a beneficial wellness program to employees.

9. The CLASSACT: All employers would be required to enroll employees in a new national public long-term care program, unless the employee opted out. Effective October 1, 2010.

Next year (2011):

1. CLASSACT (Cont.): The aforementioned CLASSACT, a national long-term-care assistance/disability insurance plan, will be in affect and be varied based on the "scale of functional ability" with a $50 - $75 per day cash benefit. All working adults will be automatically enrolled in the program unless they choose to opt-out. The employee would pay into the benefit for 5 years before becoming eligible for the benefit.

2. Insurance plans must comply with the new medical loss ratios: 80% for individual and small group plans and 85% for larger group plans. Companies are required to provide rebates to consumers if they (the insurance carriers) fail to comply with the medical loss ratios.

3. W2s with total cost of employer-sponsored health benefits: All employers must include on all W2s the total cost of employer-sponsored health benefits. If an employee receives health insurance coverage under multiple plans, the employer must disclose the total value of all such health coverage, but exclude all contributions to health savings accounts (HSAs) and Archer MSAs and salary reduction contributions to flexible spending accounts (FSAs). This applies to benefits provided during taxable years after December 31, 2010.

4. Over–the-counter drugs not prescribed by a doctor may not be reimbursed through an FSA nor on a tax free basis through an Archer MSA or HSA.

5. Contributions to FSAs are limited to $2,500 per year.