Health Insurance Articles
How The New Legislation Will Affect Group Health Insurance Plans
2011-04-06
Government health legislation signed into law last year called the Patient Protections and Affordable Care Act (PPACA) mandates affordable insurance for several groups of people previously excluded from the coverage pools. New legislation will affect group health insurance plans. Group health insurance plans no longer will be allowed to set annual and lifetime limits on benefit pay-outs although companies can establish "restricted limits" through 2013. Insurers won't be able to rescind affordable insurance coverage for reasons other than misrepresentation on applications and forms as well as fraud.
Another big change was the mandate all children under age 19, regardless of pre-existing conditions, could be covered under their family's policy. The non-exclusion mandate will be extended to all Americans in 2014 with insurance pools available for special high-risk cases. Affordable insurance will include the ability of families to keep children less than 26 years old enrolled in the family's existing group health insurance plans. Retroactive cancellation of policies by insurance companies will be prohibited.
Flexible Spending Accounts (FSA) will eliminate a previous policy of reimbursements for over-the-counter medications except for insulin. Contributions to FSAs will be limited to $2,500 annually. Some provisions of the new health care legislation will vary from group and plan to plan. Health plans operating on May 23, 2010, the day the main government health legislation passed Congress, will be considered grandfathered and able to retain certain coverages.
The pool of insured Americans will increase greatly providing more customers for group health insurance companies offering affordable insurance plans. Everybody will be required to carry some level of health insurance coverage. Those failing to do so are subject to fines. Employers with more than 50 employees must provide affordable health insurance coverage or be fined. Various formulas and timetables address coverage benefits and penalties. Other employers with fewer than 50, 25, 10 full-time equivalent employees paying less than $50,000 in average annual wages will get tax credits for purchasing health insurance for employees who will spend around 8 to 9 percent of their wages on premiums.
Government health legislation also provides for federal subsidies in the form of tax credits or fee vouchers for people who can't fully purchase affordable insurance. State exchanges will provide half-price coverage for small companies for two years following 2014. Group health insurance plans will be required to offer preventive health care services at no extra charge by 2018. They'll have to cover emergency services, allow participants to choose any in-network doctor as primary care physicians and establish a coverage appeal process. Affordable insurance will be more transparent as group plans will have to provide benefit summaries and coverage explanations during coverage enrollment and re-enrollments.
