Regarding the ever changing landscape of Health Care Reform, there is seemingly always news to report. To bring everyone up to speed, here are some pieces of information that have changed since the passage of the bill and are absolutely vital for businesses to understand.
Change number one falls into the, “if you didn’t know about it yet, GOOD” (because it would have driven you crazy) category. Included in the Reform legislation was something called a “Free Choice Voucher” which essentially said to employers, “whether or not a person takes your plans, you have to pay for them.” It was subject to income levels and relationship of earnings to premium cost, but basically it told employees if they decided they didn’t like the group’s coverage, the company would have to kick in a voucher that is equivalent to what they would have spent had the employee taken company coverage. The April 15th bill that repealed the “free choice voucher” also repealed the much maligned 1099 provision. As it stands, companies file a 1099 form anytime they pay contract workers $600 or more. Under PPACA’s original wording, a company would have issued endless 1099’s to Staples, Arrowhead, the landlord or any and all vendors or contractors providing $600 or more in goods or services. The obvious administrative burdens were the driving force behind removing that provision.
The other change pushes back the effective date of one requirement and comes on the heels of American employers’ moans of dissatisfaction upon hearing about discrimination testing’s inclusion in PPACA. For many, it became one of the main reasons to grandfather their health plan. The requirement applied to health insurance plans beginning on or after September 23, 2010. The consequences for failing such non-discrimination requirements included a $100 penalty per person, per day (some exceptions).
Upon further inspection, numerous people began to assert that the law was too unclear as to how the rules applied, and worried that, with such steep penalties, they may accidently cost themselves big bucks. An early holiday gift came on December 22, 2010 from the IRS which issued Notice 2011-1 providing that compliance was not required until after either regulations or other guidance has been issued. The IRS asked the public for comments which were due March 11, 2011 and they are going to issue regulations after sifting through them.
As the bill continues to morph, it is important to keep as up to date as possible. While many good insurance brokers are educating themselves and their clients too, for now, the general consensus is: buckle up, and STAY TUNED!
Tobias Kennedy is the Vice President of Account Sales & Service for Montage Insurance Solutions, a DBA of Danone Simpson Insurance Services LLC. He is a graduate of LMU’s prestigious Political Science Department and a student under the Center for the Study of Los Angeles. For more information, or to contact Tobias, email him at: [email protected]