Health Care Changes
Health Care Changes: Some health care changes are already here
President Obama and Congress made sweeping changes to America’s health care system in March. After reviewing the complex legislation and its potential effects on those who make their living in agriculture, representatives of Western Growers Association held a webinar in May, where they presented their findings.
The webinar panelists included Tom Nassif, president and CEO of Western Growers, and Sheldon Blumling, a partner at Fisher & Phillips law firm.
Many of the health care changes will take place in ensuing years, but this story will focus on the reforms taking place this year.
Some changes were scheduled to take effect June 30, such as the Small Business Tax Credit. If they meet certain requirements, small employers that provide health care coverage for their employees are eligible for a federal income tax credit for some of the insurance premiums they pay. In order to qualify, the employer must have 25 full-time equivalent employees for the tax year and the average annual wages of those employees must be less than $50,000, according to the panelists.
For tax years 2010 through 2013, the maximum tax credit is 35 percent of the employer’s eligible expenses. The credit is limited to two consecutive taxable years, according to the panelists.
Seasonal workers (those who work less than 120 days during the tax year) aren’t considered full-time employees. Neither are owners or their family members. Employers can’t split their companies into smaller entities to take greater advantage of the tax credit. Even if a business has more than one branch, it’s treated as a single employer for the purposes of the tax credit.
Other changes going into effect this year include the formation of state high-risk insurance pools, which are to be established for individuals with pre-existing conditions who don’t have creditable coverage. The pools will continue through Jan. 1, 2014, until state-sponsored insurance exchanges are created.
There’s also the early retiree reinsurance subsidy program, a temporary program established to reimburse the claims of retirees 55 years and older who are not Medicare-eligible. The reinsurance program would pay 80 percent of eligible claims between $15,000 and $90,000. That program also ends Jan. 1, 2014, or when the $5 billion set aside for it is exhausted.
Some reforms will go into effect after Sept. 30, such as the removal of lifetime and annual “essential benefit” limits on insurance plans. “Essential” health benefits include ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services, prescription drugs, rehabilitative services and devices, laboratory services, preventive and wellness services, chronic disease management and pediatric services, including oral and vision care, according to the panelists.
Other changes scheduled to go into effect after Sept. 30: Dependent children will be covered by a parent’s insurance plan until age 26, regardless of the child’s marital or student status. Insurance plans cannot limit coverage for pre-existing conditions for children under age 19, regardless of whether the child has a gap in coverage. Employer plans must provide preventive care without cost sharing, and must cover certain child preventive services. They also must allow participants to choose their own providers.
Employer plans cannot discriminate in favor of highly paid employees. Employers’ self-funded health plans must provide covered individuals with the right to seek external independent medical review of certain claims, such as claims that are denied based upon medical necessity. Also, uniform explanations of coverage with standard definitions must be developed, according to the panelists.