Agenda - 10-12-2010 - Board of Health Meeting

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16 What types of tax changes related to drug coverage costs are in the health reform law? Costs for over-the-counter drugs, unless physician-prescribed, will not be eligible for reimbursement through Flexible Spending Accounts (FSA) or Health Savings Accounts (HSA). This change will occur January 1, 2011. Are there measures in the health reform law that are designed to help prevent large premium increases? Yes-in 2010, the Department of Health and Human Services will develop a review process to assess health plan premium increases. Plans will be required to justify premium increases, and states will be required to report on premium increase trends. Other Chances That Will Affect Employer-Sponsored Health Insurance What other changes in the health reform law affect employee payroll deductions besides the CLASSAct? In 2013, the Medicare Part A tax rate on wages will be increased by 0.9 percent on earnings over $200,000 for individuals and $250,000 for married couples filing jointly (from current rate of 1.45 percent to 2.35 percent) Are there other changes related to Flexible Spending Accounts (FBAs) in the health reform law? Yes-in 2013, the law caps annual FSA contributions at $2,500 per year. Does the health reform law contain changes retating to waiting periods? Yes-in the first plan year beginning in 2014, all health insurance plans will not be permitted to have waiting periods for coverage longer than 90 days. Does the health reform law affect the payroll deduction of health benefit premiums before taxes? For most cases, no; however, begmning in 2018, if health insurance plans have aggregate values that exceed $10,200 for individual coverage and $27,500 for family coverage, then the plan will be subject to the excise tax, which will presumably be passed on to the plan beneficiaries. Does the health reform law require employers to offer affordable health insurance coverage? No, but the law contains fmancial incentives that they do offer affordable coverage to their employees. Beginning in 2014, employers with 50 or more employees that do not offer affordable health coverage to their employees will face a financial penalty if their employees seek coverage on the state-based health insurance exchanges and receive a premium tax credit. What is the amount of the penalty that will be imposed on employers? The penalty amount that would be imposed on employers is based on different factors, as follows: • Employers with 50 or more employees that do not offer coverage and that have at least one full time employee that receives a premium tax credit through the exchange o Assessed $2,000 per full time employee, though the first 30 employees are exempt from the assessment • Employers with more than 50 employees that offer coverage but have at least one full time employee that receives a premium tax credit through the exchange o Assessed the lesser amount. of either: $3,000 for each employee receiving a premium credit or $2,000 for each full time employee, exempting the first 30 employees from the assessment Will employers with less than SO employees face penalties for not providing employees with health insurance coverage? No-employers with less than 50 employees that do not provide health coverage are exempt from these types of penalties. 10