TouchPoint Recruiting Group

The Health Reform Bill and its Impact on Employers


 

May 24, 2010

In addition to changes expected to be passed by Congress, the health reform bill signed by President Obama on March 23 would have the following impact on employers:

2010

  • Employers can tap a temporary reinsurance program to assist in providing coverage for retirees younger than 65.
  • Employers must provide a summary of health plan coverage to workers. They can no longer discriminate in benefits coverage or premiums based on workers‟ salaries. They must cover dependents until age 26.
  • Employers with fewer than 25 workers and average wages below $40,000 can claim a tax credit for up to 35 percent of their contribution to insurance premiums.

2011

  • Employers must begin reporting the value of health benefits on workers’ W-2 forms. Tax deductions for offering drug coverage to retirees begin to expire.

2014

  • State-based insurance exchanges begin, which will offer federal subsidies to families making up to 400 percent of the federal poverty limit to buy private insurance. Also, businesses with 50 or fewer employers can purchase coverage through the exchanges. Some states could expand exchanges to include firms with up to 100 workers. All employers of all sizes must inform their workers of the existence of the exchanges.
  • Employers with more than 50 workers must provide health insurance or else pay a fine of $2,000 per year for each full-time worker above a threshold of 30 who is not covered. If an uncovered worker buys coverage through the state-based exchange, his or her employer must pay a fee of $3,000 per year.
  • To qualify, an employer’s health plan must pay at least 60 percent of medical expenses and cover all benefits mandated by government regulators. Individuals under 30 can be an exception, being covered for catastrophic losses only.
  • Employers can require only a 60-day wait before allowing new employees to join their health insurance plan. But employers with more than 200 workers must automatically enroll new employees into their health insurance plan.
  • Fees on health insurers, which many expect will be passed on to employers and individuals, will average $6.7 billion a year. Fees on drug makers and medical-device makers, which will total $5.3 billion a year, might also be passed on to health plans.

2017

  • State insurance exchanges can begin to allow employers with more than 100 workers to buy insurance.

2018

  • Employers must pay 40-percent excise tax if they offer “Cadillac” benefit plans. The threshold, which could be set as high as $10,200 for individual coverage and $27,500 for family coverage, would include the value of any health, vision, dental or other supplementary plan, as well as employer contributions to health savings accounts or similar accounts.