New Health Care Bill: Changes Happening in 2010
- Children age 26 and younger will be able to remain covered under their parents health insurance plans (this is increased from past age limits which were anywhere from age 22-25).
- Medicare recipients will receive a $250 rebate to help in closing the “doughnut hole” (with the goal being to close the doughnut hole completely by 2020).
- Health insurance companies will be banned from excluding coverage for pre-existing conditions for children.
- Adults with pre-existing conditions will be eligible for coverage into high risk health insurance pools until future health care exchanges are up and running.
- Health insurance companies will be prohibited from levying annual limits and lifetime limits on coverage.
- All new health insurance plans must provide coverage for preventative services with no out of pocket cost (all health plans will be forced to comply by 2018).
- Those companies that offer health benefits for early retirees ages 55 to 64 will receive assistance from a temporary reinsurance program.
- All new health insurance plans will have to comply with new regulations that lay out an appeals process for when health insurance claims are denied.
- Small businesses that employ less than 50 people are eligible for a tax credit equal to 35% of their health insurance premiums (this increases to 50% by 2014).
- Medicare will offer wellness visits for free one a year and personalized prevention plans. All new Medicare plans will offer preventative services with no out of pocket cost.
- Seniors enrolled in Medicare Advantage or the Prescription Drug Plan will receive a 50% discount on brand name drugs immediately with additional prescription drug discounts to follow.
- The current penalty tax of 10% on all distributions from a Health Savings Account before the age of 65 on nonqualified medical expenses will increase to 20%.
- A small business alternative to a cafeteria plan will be presented so that small businesses can offer tax free benefits without having to deal with the administrative costs of a cafeteria plan.
- Everyone earning more than $200,000 as an individual or $250,000 for those who file married filing jointly will have their Medicare payroll tax increased from the current 1.45% to 2.35%.
- A $2,500 annual cap will be placed on all contributions to flexible spending accounts (amount indexed for inflation each subsequent year).
- The current tax deduction that employers receive for subsidizing the prescription drug costs of their employees who are eligible for Medicare Part D will be done away with.
- A 2.9% excise tax on the sale of medical devices will be put into place. Certain common items like glasses, hearing aids, etc. are exempted from this tax.
- The hospital insurance tax will increase .09% for those who earn more than $200,000 ($250,000 for those married filing jointly).
- Additional requirements on health insurance companies to implement uniform standards for exchanging health care information, electronic communication, and other measures to reduce insurance company administrative costs.
- The minimum threshold for being able to claim an itemized deduction for health care expenses increased from 7.5% to 10% of AGI although those over the age of 65 can stay at the 7.5% threshold through 2016.
- All US citizens will be forced to have health insurance coverage considered acceptable by the US Government or else pay a fine of $95 in 2014, $325 in 2015, $695 in 2016 (capped at 2.5% of AGI). All of the fines are per person per year except for families have a cap on the total fine of $2,250 and the fine amount for children is half of the adult fine.
- Eligibility standards are implemented for newly formed health care exchanges.
- Businesses with 50 or more employees will face a fine of either $2,000 or $3,000 per employee for not offering health insurance coverage.
- Group health insurance plans have a maximum waiting period of 90 days.
- Health insurance companies are prohibited from using an individual’s health status to issue a policy or renew a policy. All pre-existing conditions must be covered and higher health insurance rates cannot be levied because of health, gender, etc.
- The eligibility standards for Medicaid will be changed to 133% of poverty for those who are not considered elderly.
- New annual fees will be levied on all health insurance providers based on an insurance companies market share and whose total premiums exceed $25 million.
- The “Cadillac” health insurance plan tax will kick in. An excise tax will be levied on all employer provided health insurance plans costing more than $27,500 for families and $10,200 for individuals (with increased limits for those considered to be in “high risk” professions).
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