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Near-Term Impacts of Health Care Reform

The health care reform law has many provisions that come into effect at different times over the next eight years. Some of the most important ones affecting large businesses - generally those with 50 or more employees - are listed below. Unless otherwise noted, each provision will be effective on new and renewing plan years starting on or after September 23, 2010.

Policies that were in effect when health care reform was enacted on March 23, 2010, may be granted grandfather status. They're exempt from many of the law's near-term and long-term requirements, and other requirements apply to them differently. Learn more about grandfathered plans .

Pre-existing Conditions

Children under the age of 19 can no longer be excluded from health insurance, or made to wait for health insurance because of a pre-existing condition.

Extended Dependent Coverage

Dependents of employees remain eligible for coverage under their parents' plans until they turn age 26, regardless of their marital status or whether they're in school. For grandfathered plans, these dependents can be dropped from coverage if they become eligible for insurance from another source, such as their own employer.

No Salary Discrimination

Employers cannot favor highly compensated employees by offering them different coverage levels or different premium costs.

No Lifetime Limits

The law defines certain health care benefits as essential. Under health care reform, insurance plans are no longer allowed to put a cap on how much of these benefits a person can receive during his or her lifetime.

Restricted Annual Limits

From now until 2014, health insurance plans are allowed - with some restrictions - to limit the dollar value of essential benefits that each covered person may receive each year. From 2014 on, there can be no annual limit on essential benefits. Plans may continue to limit other benefits, however.

Preventive Care

The new law requires health insurance plans to cover 100% of the costs of certain preventive care and health screenings which are intended to help people stay healthy and avoid more serious and costly treatments later in life.

Temporary Reinsurance

For people who retire at age 55 or older, but aren't yet eligible for Medicare, the federal government will offer a temporary reinsurance program to help employers continue their coverage. The funds for this $5 billion program are likely to be exhausted quickly. Eligible employers can apply for the program through the US Department of Health and Human Services. 

UPDATE: As of May 5th 2011, DHHS is no longer accepting applications for this program due to lack of funding.

Tax Form Disclosures

Starting in 2012 for 2011 benefits, employers will be required to report the dollar value each year for employees' health benefits on their W-2 form.

Long-Term Care Insurance

The new law establishes a voluntary federal program known as Community Living Assistance Services and Supports, or CLASS, beginning in 2011. Employees who elect to participate will have the cost deducted from their paychecks and premiums will vary by age. CLASS will provide limited benefits to people who have difficulty with daily activities because of health problems.