The American Hospital Association created a document highlighting how the Patient Protection and Affordable Care Act will impact hospitals and other employers. The four key areas employers will see significant changes in are:
1) Changes requiring employers to amend their employer health plans or the way they operate or administer their plans
Included in the Patient Protection and Affordable Care Act are some employer health plan amendments which could significantly change employer health plans and change the cost to provide coverage. New provisions may cause some employers to re-structure their employer health plans. The changes include a ban on annual and life-time benefit limits and pre-existing condition limitations for children under 19. Employers must also provide a number of preventative care benefits in the health care plan, including benefits for mental health and substance abuse. Lastly, there will be new regulations banning executive-only health insurance arrangements, and a new excise tax on Cadillac, or high premium, plans that will become effective in 2018. Generally no distinction is drawn between insured and self-insured plans.
2) Changes affecting the availability and cost of health insurance
Insurance market reforms bring changes affecting insurance companies. These reforms hope to make it easier for employers to obtain and afford a health plan for their employees. Two temporary insurance programs were implemented, a reinsurance program for early retirees and a high-risk insurance program for those with pre-existing conditions. It is not known how helpful these changes will be, as some are only available to small employers (no more than 25 full-time equivalent employees) or those that provide retiree health coverage.
3) The employer health insurance mandate
The employer mandate does not require employers to provide coverage to all employees or provide a minimum level of coverage. The employer health insurance mandate allows employers to receive financial incentives to provide coverage to at least lower-income full-time employees. Health insurance exchanges will be developed to allow employers and employees easy access to the coverage available.
4) Revenue provisions and other tax changes affecting employers
The provisions in the Patient Protection and Affordable Care Act allow employers to increase revenue, but they will also require time, effort, and other related expenses on behalf of the employer. Employers will be required to report the cost of all health coverage provided to an employee on their W-2 form. This will help to enforce the excise tax on “Cadillac” health plans.
For further information, including implementation dates see the AHA Legislative Advisory: Summary of the most Significant Health Reform Changes Affecting Hospitals and other Employers
AHA Health Care Reform Implementation Timeline