Today, President Obama signed into
law a $940 billion healthcare reform bill that will extend
health insurance coverage to millions of uninsured
Americans. The Senate’s version of the legislation
signed today, which was passed by the House on March 21 by a
vote of 219 to 212, will now undergo reconciliation to amend
certain provisions.
Proponents estimate that the
legislation, which passed the Senate last December, will cut
the federal deficit by an estimated $138 billion over the next
decade. Opponents, however, are concerned that the bill
will result in higher taxes and fees on insurance carriers,
pharmaceutical companies, and medical-device manufacturers
that will ultimately be passed onto consumers in the form of
higher prices.
Highlights of Current
Reform Law
Implementation of the bill's reform
provisions will be phased in over the next couple of
years. Most insurance expansion provisions will not
occur until 2014; however, there are some slated to take
effect this year including the following:
- Individual and group health
plans will be prohibited from placing lifetime limits on the
dollar value of coverage
- Dependent coverage up to age 26
will be required for all individual and group
policies
- The establishment of a temporary
high-risk pool to provide health coverage to individuals
with pre-existing medical conditions who have been uninsured
for six months
- Insurers will be prohibited from
rescinding coverage except in the case of
fraud
For a more detailed reform
timeline, please click here.
Reconciliation: What’s
Next?
In addition to the Senate version of the
healthcare reform bill, the House also passed by a vote of 220
to 211 a reconciliation bill intended to make several changes
to the new healthcare reform law. The core bill
(the Senate’s version of healthcare reform) became law upon
the President’s signature, and any amendments approved in the
reconciliation bill will amend the core bill.
The reconciliation bill contains
several proposed amendments to the new law,
including:
- Changes to the penalties for
individuals who do not purchase health insurance and for
companies that do not provide coverage to employees
- Increasing the threshold for and
delaying the implementation of the “Cadillac tax” on
generous healthcare plans until 2018 (an additional five
years)
The reconciliation bill will now go
back to the Senate for debate and a vote. The use of the
reconciliation process means that the Senate needs only a
simple majority (51 votes) to pass the reconciliation bill
rather than the 60 votes needed to break a filibuster, and
that debate is limited to 20 hours. Reconciliation bills
cannot be filibustered. Analysts expect that the Senate
will begin debating the reconciliation bill Tuesday and could
wrap up the process before their scheduled two-week
recess.
Additional
Information
While HCW has been following
healthcare reform developments over the past year from several
different sources, we have found the Kaiser Family
Foundation to be a constant source of credible
information on the topic. Throughout the reform process,
the Foundation has provided useful tools to better understand
reform, including a side-by-side comparison of the
legislation. As described on their website,
the Foundation serves as “a non-partisan source of facts,
information, and analysis for policymakers, the media, the
healthcare community, and the public.” For further
information, you can visit the Foundation’s website at http://healthreform.kff.org.
You can also view online the text
of the reform bill passed by the House
(H.R. 3590):
or the Reconciliation bill (H.R.
4872):
Practical Application: HCW,
You and Healthcare Reform
With any newly-passed
law, some entity will be responsible for issuing regulations
for implementation, and we expect guidance from the HHS, IRS,
DOL, and others will be forthcoming. As the
reconciliation process continues to develop and the practical
application of reform for employers unfolds, HCW is committed
to keeping you informed and educated about healthcare reform
and its impact on your company and your group health
plan.
Over the coming weeks, you will
continue to receive updates and information from HCW through
Compliance Alerts, webinars, and live, in-person
seminars. In the meantime, if you have any questions
about healthcare reform, the reform process, or what reform
means for your company, please contact our office at (919)
403-1986.
