New health-care law provisions start to kick in
But employers have until 2014 before they need to act.
Fruit growers and agribusinesses who hire workers and are concerned about what they need to do to comply with the Patient Protection and Affordable Health Care Act that became law on March 23 can rest easy for some time yet.
While some provisions of the new national health care law came into effect in late September—and those provisions may affect them and their families as ordinary citizens—not much has yet come into effect that affects them as employers.
“There’s no incentive to do much until 2014,” says Scott Dahlman, a policy analyst for the Washington State Farm Bureau.
One provision that came into effect this year is a tax credit for small employers. Employers having fewer than 25 employees are eligible for a tax credit of up to 35 percent of their contribution to the health insurance premium if they provide insurance for their employees. After 2014, that tax credit goes up to 50 percent.
But not until 2014 will they be required to either provide health insurance or face possible fees. Even then, employers with fewer than 50 full-time-equivalent employees will not have to provide insurance. Seasonal workers—no matter how many—are not counted as employees requiring employer-provided health insurance.
Earlier this year, Dahlman put together a Web-based seminar—a Webinar—explaining provisions of the new law. It can be viewed at the Washington State Farm Bureau Web site, www.wsfb.com/reform.
In September, several provisions of the new law became effective that restrict what insurance companies may do or mandating what they must do. These provisions include:
- Providing dependent coverage for children up to age 26. Children under 26 will be able to stay on their parents' insurance plans for all individual and group policies.
- Requiring guaranteed access to insurance and renewability, without regard to preexisting conditions, for dependents. That provision will be extended to everybody in 2014. In the meantime, states are to create high-risk pools for people who are denied health insurance because of preexisting conditions.
- Requiring that policies have an “essential health benefits package” with a comprehensive set of covered services.
- Prohibiting lifetime benefit limits and regulating annual limits as well.
- Prohibiting insurers from canceling coverage except in cases of fraud.
- Limiting deductibles for health plans to $2,000 for individuals and $4,000 for families.
- Limiting waiting periods to 90 days.
- There are literally thousands of new provisions that were packaged in the 2,200-page bill. Provisions become effective along a timeline covering the next eight years.
Several congressional committees prepared a document—seven pages long—that shows the timeline for implementation of the many health insurance changes brought about by the new health care law. To read or download a copy, go to http://energycommerce.house.gov and find it under publications.
By 2014, all U.S. citizens and legal residents must have qualifying health insurance coverage, and those without it will pay penalties that will be phased in. That will affect an estimated 32 million Americans who don’t currently have health insurance. But by then, people should have many more choices of where and how they get health insurance.
One key provision of the new law—in fact, its major innovation—mandates the creation, by 2014, of insurance exchanges. These organized marketplaces—one-stop shopping centers for insurance—allow anyone uninsured or self-employed to buy a health insurance policy. The exchanges are supposed to make the health care market more competitive by giving people more choices and providing transparency so consumers can make wise choices.
In addition, the government will provide cost-sharing subsidies to low-income people who buy insurance through the exchanges.
States are required to help in creating exchanges, but aren’t exactly required to run their own exchanges, Dahlman said. They can use a possible federal exchange, and regional multistate exchanges are allowed as well. Most states are moving forward with creating an exchange, but some have expressed interest in using a federal alternative, and states such as Washington are still undecided, he said.
In 2014, employers that have more than 50 full-time-equivalent employees and do not offer coverage will have to pay an assessment if any of their employees go to an exchange to buy insurance and receive a credit to buy it.
The fee, Dahlman said, is $2,000 per full-time employee—excluding the first 30 employees. If no employees purchase subsidized insurance through an exchange, there is no assessment. •