What's happening in health care reform and when? The interactive timeline can show you past, present and future health care reform changes.

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All North Carolinians

Restrictions on Annual Dollar Limits

Effective September 23, 2010

Insurers are limited in their ability to use yearly caps to control costs for benefits.

Beginning plan years on or after September 23, 2010, health insurance plans will be restricted in their ability to limit the dollar value of "essential benefits" that each covered person may receive each year.

Exactly what essential benefits includes has not yet been defined by the U.S. Department of Health and Human Services, but some broad categories have been provided, including: prescription drugs, mental health and substance abuse and laboratory services.

Individual grandfathered plans are exempt from this change. Policies that were in effect when health care reform was enacted on March 23, 2010, may be granted grandfather status. This means that they are exempt from many of the law's near-term and long-term requirements, and that other requirements apply to them in different ways.

The following link takes you to the HealthReform.gov, a website managed by the US Department of Health and Human Services: http://www.healthreform.gov/about/grandfathering.html. 

 

Small Business

Small Employer Tax Credits

Effective January 1, 2010

Many companies with fewer than 25 full time equivalent employees can deduct a percentage of their health insurance cost from their taxes.

Between 2010 and 2013, businesses with fewer than 25 full-time equivalent (FTE) employees may qualify for tax credits if they contribute to their employees' health insurance and their employees' wages average less than $50,000. Depending on the size of the company and the average salary, the tax credit is as much as 35% of the employer's cost (25% if the company is tax-exempt), on a sliding scale. This amount will increase to 50% beginning in 2014 but only for coverage that is purchased through the Exchange.

Learn more about tax credits for small businesses. 

 

All North Carolinians

Longer Dependent Coverage

Effective September 23, 2010

Dependents can stay on their parents' plans until age 26

Beginning plan years on or after September 23, 2010, young people will be able to stay on their parents' health plans until age 26, regardless of marital status or whether they are in school. Grandfathered group health plans may exclude these dependents if they become eligible for insurance from another source, such as their own employers.

If you're a customer of Blue Cross and Blue Shield of North Carolina, there is a good chance nothing has changed. We extended dependent coverage to the age of 26 in 2008 for most of our customers.

 

Small Business

Temporary Reinsurance for Early Retirees

Effective June 23, 2010

New program provides financial help for small businesses to continue to provide coverage for early retirees.

For people who retire at age 55 or older but who are not 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 U.S. Department of Health and Human Services. Applications were made available beginning June 29, 2010. UPDATE: As of May 5th, 2011, DHHS is no longer accepting applications for this program due to lack of funding.

The following links go to the US Department of Health and Human Services:

Frequently Asked Questions About the Program 

Program Application  

 

All North Carolinians

Web Portal Launched

Effective July 1, 2010

Beginning July 2010, the government will operate a website to help people learn about health insurance and health care reform. When health insurance exchanges become active in 2014, this website will be part of the system people use to shop for and buy health insurance.

A more comprehensive version will be released in October 2010 to include more expanded content, such as benefit and pricing information. The display of the benefit plans will be driven by interactive functionality, with the order and layering of search results to be based on consumer choice parameters.

Visit HealthCare.gov. 

 

All North Carolinians

Preventive Health Services Without Cost-Sharing

Effective September 23, 2010

No copayments or out-of-pocket costs.

Beginning plan years on or after September 23, 2010, 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.

Individual and group grandfathered plans may be exempt from this change. Policies that were in effect when health care reform was enacted on March 23, 2010, may be granted grandfather status. This means that they may be exempt from many of the law's near-term and long-term requirements, and that other requirements apply to them in different ways.

Learn more about grandfathered plans.  (US Department of Health and Human Services)

Learn more about the importance of preventive care.  (CDC)

Learn more about North Carolina’s Prevention Action Plan. (NCIOM)

 

All North Carolinians

Limits on Pre-Existing Condition Exclusions

Effective September 23, 2010

Access to insurance improves for people under age 19.

Beginning plan years on or after September 23, 2010, people under age 19 can no longer be made to wait for insurance coverage or denied benefits because of a pre-existing health condition.

Individual grandfathered plans may be exempt from this change. Policies that were in effect when health care reform was enacted on March 23, 2010, may be granted grandfather status. This means that they may be exempt from many of the law's near-term and long-term requirements, and that other requirements apply to them in different ways.

The following link takes you to the HealthReform.gov, a website managed by the US Department of Health and Human Services: Learn more about grandfathered plans. 

 

All North Carolinians

No Lifetime Dollar Limits

Effective September 23, 2010

Insurers are limited in their ability to use lifetime caps to control costs for benefits.

Beginning plan years on or after September 23, 2010, health insurance plans can no longer limit the dollar value of essential benefits that each covered person may receive over the course of their lifetime.

Exactly what essential benefits includes has not yet been defined by the U.S. Department of Health and Human Services, but some broad categories have been provided, including:

  • Prescription drugs
  • Mental health and substance abuse
  • Laboratory services

 

All North Carolinians

No Rescissions Except for Fraud or Material Misrepresentation

Effective September 23, 2010

Policies can't be rescinded for unintentional errors made on the application for health insurance.

Beginning plan years on or after September 23, 2010, insurers cannot retroactively terminate (or "rescind") existing policies except in cases of fraud, or where information that the insured individual provided in the policy application is intentionally misstated and that information affected:

  • The insurer's decision to issue coverage in the first place
  • The terms of the coverage issued
  • The premium charged

 

All North Carolinians

Minimum Medical Loss Ratios

Effective January 1, 2011

Insurers must spend a minimum percentage of premiums on health care or pay rebates.

This new rule governs how much of an insurance company's premium dollar actually goes to pay for medical care instead of administrative and other costs – the so-called medical loss ratio.

Beginning in 2011, for large group plans insurers must pay at least 85 percent of the premium dollars on care. For small group and individual plans, insurers must pay at least 80 percent of the premium dollars on care.

Plans that fall short of those requirements will have to pay rebates to enrollees to make up the difference.

 

Small Business

Optional Benefit Disclosure on W-2s

Effective January 1, 2011

Businesses may tell the government the aggregate cost of employer-sponsored health coverage.

 

Small Business

Benefit Disclosure on W-2s

Effective January 1, 2012

Businesses must tell the government the aggregate cost of employer sponsored health coverage.

Regardless of size, employers who offer employer-sponsored health coverage must calculate and report the cost of coverage on each employee's W-2 tax form, regardless of whether the cost is paid by the employer or employee.

 

Large Business

Optional Benefit Disclosure on W-2s

Effective January 1, 2011

Businesses may tell the government the aggregate cost of employer-sponsored health coverage.

 

Large Business

Benefit Disclosure on W-2s

Effective January 1, 2012

Businesses must tell the government the aggregate cost of employer sponsored health coverage.

Regardless of size, employers who offer employer-sponsored health coverage must calculate and report the cost of coverage on each employee's W-2 tax form, regardless of whether the cost is paid by the employer or employee.

 

Large Business

Optional Benefit Disclosure on W-2s

Effective January 1, 2012

Businesses may tell the government the aggregate cost of employer-sponsored health coverage. Disclosure becomes mandatory in January 2012.

 

All North Carolinians

Changes to FSA, HRA and HSA Rules

Effective January 1, 2011

Definition of qualified medical expense excludes over the counter drugs.

Starting in 2011, the new law bars Health Savings Accounts, Health Reimbursement Accounts or Flexible Spending Accounts from reimbursing people for over-the-counter medications unless a doctor prescribes them.

Also, the penalty for non-qualified distributions from HSAs specifically increases from 10% of the inappropriately withdrawn funds to 20%.

 

Large Business

Auto-Enrollment for Large Employers

Effective January 1, 2011

Companies must enroll employees automatically, but individuals can opt out.

For the purposes of listing on a timeline, the auto-enrollment provision is listed as effective on January 1, 2011. However, there will be uncertainty about the implementation date until the U.S. Department of Labor issues the regulations which will govern auto-enrollment.

Once in effect, companies with more than 200 employees must enroll their full-time employees in a health insurance plan automatically, instead of waiting for each employee to sign up for it. Each employee can later opt out of the plan or choose a different one if he or she prefers.

 

Small Business

Small Business Wellness Grants

Effective January 1, 2014

Grant program for small businesses who provide comprehensive workplace wellness programs.

Starting in 2014, small employers who establish wellness programs for employees and their families may qualify for federal grants for up to five years.

The health care reform law includes $200 million over five years to help companies with fewer than 100 employees start wellness programs in areas like nutrition, tobacco cessation, exercise or stress management. Only programs that started after health care reform was signed into law in March 2010 will be eligible. The U.S. Department of Health and Human Services will administer the grant program.

 

Small Business

New Reporting Requirements

Effective January 1, 2014

Small businesses must provide coverage data to employees and government.

Under rules that will be developed by the U.S. Department of Health and Human Services, employers will have to provide reports that detail plan benefits.

 

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Large Business

New Reporting Requirements

Effective January 1, 2014

Large businesses must provide coverage data to employees and government.

Under rules that will be developed by the U.S. Department of Health and Human Services, employers will have to provide reports that detail plan benefits.

 

Small Business

FSA Contributions Capped at $2,500

Effective January 1, 2013

Limits ability of small business employees to set aside pre-tax money for medical expenses

This new limit applies to the amount an individual contributes each year or his or her flexible spending account (FSA) to $2,500. It does not apply to any amount an employer may elect to contribute to an employee's account. But employers have the option of limiting employee FSA contributions to less than the $2,500 maximum. This amount is subject to a cost of living adjustment.

 

Large Business

FSA Contributions Capped at $2,500

Effective January 1, 2013

Limits ability of large business employees to set aside pre-tax money for medical expenses

This new limit applies to the amount an individual contributes each year or his or her flexible spending account (FSA) to $2,500. It does not apply to any amount an employer may elect to contribute to an employee's account. But employers have the option of limiting employee FSA contributions to less than the $2,500 maximum. This amount is subject to a cost of living adjustment.

 

All North Carolinians

Individual Mandate Kicks In

Effective January 1, 2014

Individuals must have insurance coverage or pay a penalty.

The mandate for individuals to buy health insurance is effective January 1, 2014.

This means that most U.S. citizens and legal residents must buy a qualified health insurance plan or pay a penalty instead. People with dependents who do not buy insurance to cover them will have to pay the penalty for the dependents as well as for themselves.

The annual penalty for not buying qualified health insurance will begin at $95 per person (up to $285) or 1% of income, whichever is greater, and will rise over time to a maximum of $695 (up to $2085) or 2.5% of income, whichever is greater, by 2016.

Individuals with incomes up to 133% of the federal poverty level will be eligible for Medicaid coverage.

 

All North Carolinians

Subsidies for Families to Buy Insurance

Effective January 1, 2014

Premium Assistance Credits available for eligible families.

Federal subsidies will help people offset the cost of health insurance premiums as long as their incomes are no more than 400% of the federal poverty level. The amount of the subsidy will vary based on income and other factors. The federal poverty level changes over time, but it is currently $22,050 for a family of four, so a person or family making four times that amount ($88,200) or less would be eligible for the subsidy.

Subsidies will only be available for those purchasing coverage through the new insurance exchange. Employees may apply for subsidies when offered employer coverage that is considered unaffordable (coverage below 60% actuarial value or premiums exceed 9.5 percent of household income).

 

Large Business

Employers Must Provide Insurance

Effective January 1, 2014

Pay-or-play for businesses with 50 or more employees: Offer minimum essential health insurance coverage or face a possible penalty.

Starting in 2014, large groups can actually be penalized whether or not they provide health insurance to their employees. It's confusing but, basically, if employers of 50 or more have at least one full-time employee who receives a premium tax credit, the employer will be assessed a fee.

For employers who do not offer coverage, the penalty can be arrived at by following this equation: (Number of full-time employees – 30) x $2,000.

For employers who offer coverage that costs more than 9.5% of any employee's household income, a penalty will apply if those employees buy coverage on their own instead and qualify for and receive federal subsidy. The penalty will equal the LESSER OF (Number of full-time employees – 30) x $2,000 OR number of employees receiving federal subsidy x $3,000.

Penalties will not be imposed on an employer who offers minimum essential coverage and provides a free choice voucher.

 

States Must Establish Exchanges

Effective January 1, 2014

Open markets for people and groups to buy insurance.

Beginning in 2014, states or the federal government will establish "American Health Benefit Exchanges" as an alternate way for people to shop for health insurance from private companies. People who use exchanges will be offered a choice of health plans at different price levels. Each exchange will set up rules and communication tools to help people make fair, accurate comparisons. Those individuals and small employers who are eligible for subsidies will only be able to claim them by purchasing coverage through an exchange. At first, exchanges will serve individual people and small employers. Later, states will have the option of opening them to larger employers.

Exactly how insurance exchanges will work is unknown at this time, but some people think the experience will be similar to how travel plans can be made on Web sites like Orbitz® or Expedia®.

 

Small Business

States Must Establish Exchanges

Effective January 1, 2014

Open markets for people and groups to buy insurance.

Beginning in 2014, states or the federal government will establish "American Health Benefit Exchanges" as an alternate way for people to shop for health insurance from private companies. Each exchange will set up rules and communication tools to help people make fair, accurate comparisons. Those individuals and small employers who are eligible for subsidies will only be able to claim them by purchasing coverage through an exchange. At first, exchanges will serve individual people and small employers. Later, states will have the option of opening them to larger employers.

Exactly how insurance exchanges will work is unknown at this time, but some people think the experience will be similar to how travel plans can be made on Web sites like Orbitz® or Expedia®.

 

Small Business

Cost-Sharing Limits for Small Businesses

Effective January 1, 2014

Annual out-of-pocket limits can't be more than in HSA plans and deductibles will be capped.

In 2014, group health plans won't be allowed to impose out-of-pocket costs to individual members that are more than the IRS limits for out-of-pocket costs under a Health Savings Account (HSA) for taxable year 2014. These amounts will be adjusted annually. In addition, individual deductibles will be capped at $2,000, and family deductibles will be capped at $4,000. These amounts will also adjust annually.

 

Large Business

Cost-Sharing Limits for Large Businesses

Effective January 1, 2014

Annual out-of-pocket limits can't be more than in HSA plans and deductibles will be capped.

In 2014, group health plans won't be allowed to impose out-of-pocket costs to individual members that are more than the IRS limits for out-of-pocket costs under a Health Savings Account (HSA) for taxable year 2014. These amounts will be adjusted annually. In addition, individual deductibles will be capped at $2,000, and family deductibles will be capped at $4,000. These amounts will also adjust annually.

 

All North Carolinians

Guaranteed Issue of Insurance

Effective January 1, 2014

Insurance companies must accept any eligible applicant.

Permits open and special enrollment periods, during which any person or group who applies for health insurance and is eligible under the insurance company's rules must be sold coverage. Requires special enrollment periods for enrollment of persons who have qualifying events.

 

All North Carolinians

Annual Benefit Maximums Eliminated

Effective January 1, 2014

Insurers can no longer use caps to control costs for benefits.

Beginning plan years on or after January 1, 2014, health insurance plans can no longer limit the dollar value of "essential benefits" that each covered person may receive each year.

Exactly what essential benefits includes has not yet been defined by the U.S. Department of Health and Human Services, but some broad categories have been provided, including:

  • Prescription drugs
  • Mental health and substance abuse
  • Laboratory services

 

Small Business

Employer Free Choice Vouchers

Effective January 1, 2014

Provides more affordable options to employer coverage for certain small business employees.

Beginning in 2014, employers who offer coverage to their employees will be required to give "free choice vouchers" to those employees who:

  • Have incomes less than four times the Federal Poverty Level
  • Pay at least 8% of their health insurance premiums
  • Pay less than 9.8% of their incomes in health insurance premiums
  • If those employees wish to enroll in a health plan through an exchange instead of using a plan the employer offers.

The voucher will have a value equal to what the employer would have paid to provide coverage to the employee under the employer's plan.

Any individual receiving a voucher may not receive a premium credit or cost-sharing subsidy. No employer mandate penalty will be assessed with respect to employees that purchase through the Exchange using this voucher.

 

Large Business

Employer Free Choice Vouchers

Effective January 1, 2014

Provides more affordable options to employer coverage for certain large business employees.

Beginning in 2014, employers who offer coverage to their employees will be required to give "free choice vouchers" to those employees who:

  • Have incomes less than four times the Federal Poverty Level
  • Pay at least 8% of their health insurance premiums
  • Pay less than 9.8% of their incomes in health insurance premiums
  • If those employees wish to enroll in a health plan through an exchange instead of using a plan the employer offers.

The voucher will have a value equal to what the employer would have paid to provide coverage to the employee under the employer's plan.

Any individual receiving a voucher may not receive a premium credit or cost-sharing subsidy. No employer mandate penalty will be assessed with respect to employees that purchase through the Exchange using this voucher.

 

All North Carolinians

All Pre-Existing Condition Exclusions Banned

Effective January 1, 2014

No person can be delayed in getting insurance based on a health condition.

Earlier in the health care reform implementation process (plan years beginning on or after September 23, 2010), people under age 19 could no longer be made to wait for insurance coverage or denied benefits because of a pre-existing health condition.

Beginning in 2014, the new law applies more broadly - requiring that all individuals have coverage, and that insurers offer coverage without imposing any pre-existing condition exclusion.

 

Individuals

Closing the 'doughnut hole'

Effective January 1, 2010

Payments to bridge gap for Medicare Part D prescriptions

Medicare beneficiaries who buy prescription drugs using Medicare Part D will receive additional money this year and reductions in out-of-pocket cost in future years to help narrow a gap that existed before health care reform – the so-called 'doughnut hole.'

Medicare beneficiaries began receiving their $250 checks starting in June 2010 if they had reached the coverage gap in the first quarter of the year.

For more information about the 'doughnut hole', click here: http://answers.hhs.gov/questions/6136 

 

Individuals

High-Risk Pools for Uninsured with Pre-Existing Conditions

Effective June 23, 2010

Immediate access to coverage for people with pre-existing conditions who can't buy insurance under the current system.

Health insurance "high risk pools" are government-based programs that offer an alternative coverage option to individuals who fit certain health criteria, do not have access to group health insurance, and are unable to purchase individual coverage.

Under health care reform, a $5 billion federal program was created to form temporary high risk pools for people who cannot buy health insurance because of a pre-existing condition. The program will make available subsidized coverage until other parts of health care reform take effect to allow individuals to buy insurance.

North Carolina has operated its own state-based high risk pool through Inclusive Health, since 2007. As of July 1, 2010, Inclusive Health is separately operating the federal program as well. You can learn more about either program by visiting their website. 

 

Individuals

Medicare Taxes for High-Income Individuals

Effective January 1, 2013

People who earn more than $200,000 as individuals or $250,000 in the case of a joint return will pay an additional 3.8% Medicare payroll tax on 'unearned income' – not salaries but things like taxable interest income, dividends, capital gains, annuities, and passive rental income.

 

Individuals

Expanded Medicaid Eligibility

Effective January 1, 2014

More people able to use government assistance program.

Part of health care reform is an expansion of Medicaid (a program through which state and federal governments provide health insurance for the poor and disabled). Beginning in 2014, people who make no more than 133% of the federal poverty level can receive Medicaid.

 

Medicare

Medicare Part D Rebates

Effective January 1, 2010

One-time rebate check for eligible beneficiaries.

Medicare beneficiaries who buy prescription drugs using Medicare Part D who fall into the coverage gap (“doughnut hole”) will be eligible for a one-time $250 rebate check. The first round of checks was mailed in June 2010, with rebates to continue throughout the year. There are no forms to fill out; CMS automatically mails the rebate to eligible individuals. Medicare beneficiaries can find out if they are eligible for the rebate by checking their Explanation of Benefits, mailed monthly.

Learn more about the "doughnut hole." 

 

Medicare

Permanent Prescription Assistance

Effective January 1, 2011

The gap in Medicare Part D prescription coverage, which is addressed by the $250 rebate in 2010, will gradually narrow starting in 2011 when pharmaceutical companies begin discounting 50 percent of the cost of a Part D drug. Eventually, Part D members will be responsible for 25 percent of the cost of Part D medicines (generic and brand-name) when they are in the "doughnut hole."

 

Medicare

Income-Based Charges for Medicare Part D

Effective January 1, 2011

Starting in 2011, Social Security will assess a charge to Medicare beneficiaries who are above a certain income level and who choose a Medicare Part D plan. This high-income assessment will work the same way that it currently works for the high-income premium assessment for Part B participants – that is, it will be a percentage of the base premium determined by the government each year. This means the cost of Medicare may rise for beneficiaries with above average incomes or net worth.

 

Medicare

Changes to Medicare Advantage

Effective January 1, 2012

The federal government plans to reduce payments to Medicare Advantage plans starting in 2012, based on the assumption that they are currently over-funded. However, many plans offer richer benefits because of the current payment levels. Members of these plans may see premium increases and/or service reductions as a result.

 

All North Carolinians

Medicare Taxes for High-Income Individuals

Effective January 1, 2013

People who earn more than $200,000 as individuals or $250,000 in the case of a joint return will pay an additional 3.8% Medicare payroll tax on "unearned income" – not salaries but things like taxable interest income, dividends, capital gains, annuities, and passive rental income.

 

Individuals

Individual Mandate Kicks In

Effective January 1, 2014

Individuals must have insurance coverage or pay a penalty.

The mandate for individuals to buy health insurance is effective January 1, 2014.

This means that most U.S. citizens and legal residents must buy a qualified health insurance plan or pay a penalty instead. People with dependents who do not buy insurance to cover them will have to pay the penalty for the dependents as well as for themselves.

The annual penalty for not buying qualified health insurance will begin at $95 per person (up to $285) or 1% of income, whichever is greater, and will rise over time to a maximum of $695 (up to $2085) or 2.5% of income, whichever is greater, by 2016.

Individuals with incomes up to 133% of the federal poverty level will be eligible for Medicaid coverage.

 

Medicare

Original Medicare Preventive Services

Effective January 1, 2011

The reform law eliminates out-of-pocket costs for most preventive services covered by Original Medicare. Starting in 2011, Original Medicare recipients will pay no deductible or copayment for services such as wellness visits and personalized prevention plans.