Federal Health Reform - Timeline and FAQs

Information regarding the Federal Health Care Reform changes and when they become effective can be found at the links below. Also, included is a section of frequently asked questions and their answers.

Some significant changes will take effect almost immediately; others are phased in over the next several years. Most of the rules and regulations have yet to take effect that will help our state implement the reforms.

We'll continue to update this page as new information becomes available, but the information contained here is what we know so far.

Disclaimer:

The Patient Protection and Affordable Care Act (PPACA) is a federal law which the Office of Insurance Regulation currently does not have the authority to enforce. Enforcement authority will need to be provided by the Florida Legislature. However, some health plans have already revised their contracts to include provisions of the federal law. If your health plan has revised their contract to include federal provisions, the Department of Financial Services should be able to assist you in the event you have a concern about one of those provisions. We can be reached at 1-877-693-5236 or www.myfloridacfo.com.

Consumers with questions or concerns regarding provisions of the PPACA can contact the Health Insurance Assistance Team, U.S. Department of Health and Human Services, at 1-888-393-2789 for assistance.

View Who Will See Changes and When (select a year to display information)

2010
People with health insurance
- Insurers may not arbitrarily cancel your coverage when you get sick, except in cases of fraud. (effective September 23, 2010)
- Insurers may not impose lifetime coverage limits and, until 2014, may only set restricted annual limits for essential health benefits. (effective September 23, 2010)
- Insurers must cover preventive services with no co-payments or deductibles. (effective September 23, 2010)
Children
- Children who don't get health care coverage from their employers may stay on their parents' plans until age 26. (effective September 23, 2010)
- Insurers may not deny coverage to a dependent child under age 19 because of preexisting conditions. The same will be true for adults and dependent children age 19 and older beginning in 2014. (effective September 23, 2010)
Medicare beneficiaries
- Eligible beneficiaries with Part D coverage who enter the "donut hole" in 2010 can receive a one-time $250 rebate to pay for prescription drugs that were purchased while in the donut hole. The rebate will be less for individuals earning more than $85,000 per year and for couples earning more than $170,000. The donut hole is the period of time during which some Medicare prescription drug plans won’t contribute anything toward your prescription costs. (began January 1, 2010)
Uninsured
- Individuals who have been without coverage for at least six months and who have a preexisting conditions may obtain coverage through a high-risk health insurance pool to be run by the state, the federal government, or a nonprofit. The risk pools are temporary until exchanges become effective in 2014. (effective July 2010)
- A website set up by the federal government is scheduled to be available by July 1 to help consumers shop for coverage.
Small businesses
- Businesses with 25 or fewer full-time employees that pay for at least 50 percent of premiums and pay average annual wages below $50,000 may be eligible for a tax credit of up to 35 percent (25 percent for nonprofits) of the premiums the business pays. The credits increase in 2014. (began January 1, 2010)
2011
Insurance companies
- For small group and individual plans, insurers must spend at least 80 percent of revenue from premiums on medical services and programs directly related to improving health care quality. The amount increases to 85 percent for large group plans. Insurers that fail to meet the minimum payment requirements must provide refunds to enrollees.
Medicare beneficiaries
- Seniors with Part D coverage in the donut hole will begin receiving a 50 percent discount on brand-name drugs.
- Co-payments and deductibles for preventive services will be eliminated.
2013
Wealthier individuals and families
- For individuals earning more than $200,000 per year and couples earning more than $250,000 per year, Medicare payroll taxes will increase.
2014
Uninsured
- Health care coverage will be required for U.S. citizens and legal residents. The tax penalty will be $95 or 1 percent of taxable income in 2014; $325 or 2 percent of taxable income in 2015; $695 or 2.5 percent of taxable income in 2016; and adjusted according to income every year after. There are exceptions for religious objectors, those who can't afford coverage, individuals below the tax-filing threshold, and various others.
- States or the federal government will create insurance marketplaces, known as "exchanges," for individuals and small businesses to buy coverage. U.S. citizens and legal residents who are not incarcerated would qualify to buy coverage in an exchange. States can expand their exchanges to provide coverage for large employers in 2017.
- Premium subsidies will be available for individuals and families with incomes between 133 percent ($14,404 for individuals and $29,326 for a family of four) and 400 percent ($43,320 for individual or $88,200 for a family) of the federal poverty level.
- States will be required to expand Medicaid to individuals under age 65 (children, pregnant women, parents, and adults without dependent children) who are up to 133 percent of the federal poverty level. There is an option for states to expand Medicaid in 2011.
People with health insurance
- Insurers may not deny you coverage because of preexisting conditions. Similar provisions prohibiting insurers from denying coverage to children with preexisting conditions begin in 2010.
- Insurers must accept everyone who applies for coverage when they apply during a defined enrollment period.
- Insurers can only base premiums on age, tobacco use, geographic area, and whether coverage is for an individual or a family.
- Insurers may not deny coverage because of a person's health status, medical condition, claims experience, medication history, genetic information, or disability.
Businesses
- Large employers who don't offer employee health care coverage will pay $2,000 for each full-time worker who receives a tax credit for health insurance through a state exchange.
- Tax credits for small employers increase to 50 percent (35 percent for nonprofits) of the health care premiums the business pays.
- Businesses with more than 200 employees must automatically enroll employees in a health insurance plan. Employees can opt out.
2020
Medicare beneficiaries with Part D coverage
- The donut hole is eliminated.

Frequently Asked Questions (select a question to display the answer)

When does the new health care reform take effect?

President Obama signed HR 3590, the Patient Protection and Affordable Care Act into law on March 23, 2010. The President also signed HR 4872, the Health Care and Education Reconciliation Act, into law on March 30, 2010. Together, these acts provide staggered time frames within which many of the changes go into effect. Some of the changes took effect immediately, while others will be phased in through 2020.

When will I be required to buy insurance and what happens if I don't?

Effective January 1, 2014, all U.S. citizens and legal residents will be required to obtain qualifying coverage. Those who do not obtain coverage will pay a tax penalty. The total annual tax penalty will be the greater of either a flat dollar amount or a percentage of taxable income: $95 per person or 1 percent of taxable income in 2014, $326 per person or 2 percent of taxable income in 2015, and $695 per person or 2.5 percent of taxable income in 2016. A person will only pay one-twelfth of the total annual penalty for each month without coverage and will not have to pay more than the national average cost for bronze-level coverage through the state exchanges. After 2016, the tax penalty increase annually based on a cost-of-living adjustment.

The law provides exceptions for: 1) individuals and families below a certain income, 2) people who cannot afford coverage that is available, 3) individuals who have been uninsured for less than three months, 4) members of Indian tribes, and 5) people who do not obtain coverage because of religious objections. The U.S. Department of Health and Human Services (HHS) will provide additional guidance on this topic in the future.

What type of coverage will be offered through the exchanges and when will it be available to purchase?

The new law creates two types of state-based exchanges: the American Health Benefit Exchanges, through which individuals may purchase qualified coverage; and the Small Business Health Options Program (SHOP), through which small businesses with up to 100 employees can purchase qualified coverage. States may choose to create one exchange program that serves both individuals and small businesses. The qualified coverage will be determined by HHS. Beginning in 2017, the states may allow businesses with more than 100 employees to purchase coverage in the SHOP exchanges. Starting January 1, 2014, four categories of plans, plus a separate catastrophic plan for individuals under age 30, will be offered through the exchanges. Each category of plans will offer essential benefits as determined by HHS. Plan benefits, premiums, and enrollee out-of-pocket expenses will vary depending on the plan chosen. Plans will cover 60 to 90 percent of the medical expenses, depending on which plan the enrollee selects.

As an employer, what happens if I don't offer coverage or my employees choose not to join the health plan that I do offer?

The legislation does not require employers to offer coverage. However, beginning January 1, 2014, certain employers must pay penalties if they choose to not offer coverage. Employers with more than 50 full-time employees that do not offer coverage and have at least one full-time employee who receives a premium tax credit for obtaining coverage will be assessed a per month fee of one-twelfth of $2,000 per full-time employee receiving the subsidy. Employers with more than 50 employees that offer coverage but have at least one full-time employee receiving a premium tax credit for obtaining coverage, will pay a per month fee of the lesser of one-twelfth of $3,000 for each employee receiving a premium credit or one-twelfth of $2,000 each for the total number of full-time employees (the penalty that would be charged if the employer did not offer health coverage.) Employers with more than 200 employees will be required to automatically enroll their employees into health insurance plans offered by the employer. However, employees may opt out.

Employers with 50 or fewer employees are exempt from the requirement and penalties.

Is there a provision for an interim federal health risk pool that will provide coverage for preexisting conditions? When does it begin?

No later than 90 days after enactment, the law creates a federal high-risk pool program to provide coverage for people who have been uninsured for six months and have a preexisting condition. This program will provide insurance coverage until 2014, when insurance companies can no longer deny you coverage based on your health. HHS is working with states to create a high risk pool program at the state level, either by entering into a contract with the state or a nonprofit to administer the program. If HHS cannot enter into such a contract, HHS will have to administer the program.

When does free preventive care begin?

Within six months after enactment, all group health plans and individual plans will be required to provide coverage for preventive services. Recommended prevention and vaccination services will be covered without any deductibles or copayments. Seniors enrolled in Medicare will also no longer have to pay for proven preventive services.

Will the healthcare reform help cover my Medicare prescription drug costs that are not currently covered? This coverage gap is also known as the Medicare Part D "donut hole."

Effective for calendar year 2010, the new health care reform provides a $250 rebate to Medicare beneficiaries who have prescription drug costs to reimburse them for prescription drugs that were purchased within the donut hole in 2010. Beginning in 2011, Medicare enrollees will receive a 50 percent discount on prescription drugs in the donut hole, and the discount increases each year until the donut hole is eliminated entirely in 2020.

When does coverage for dependent children, up to age 26, begin?

Within six months of enactment, insurers will be required to permit dependent children to stay on family policies until age 26. Florida law currently allows dependent children up to age 25 to stay on family policies, with an option for the parents to keep them on until age 30. The new federal health care reform applies to all plans in the individual market, new employer plans, and existing employer plans, unless your adult child has an offer of coverage through his or her employer. This requirement will take effect the next time your plan comes up for renewal. Adult children who are on their parents' plan now but who lose that coverage when they graduate from college will have the option of rejoining their parents' policy in the new plan year beginning six months after enactment. Those whose parents work at self-insured companies will also be eligible if they do not have an offer of employer-sponsored insurance. Both married and unmarried dependents qualify for this dependent coverage. Beginning in 2014, dependent children up to age 26 can stay on their parent's employer plan even if they have an offer of coverage through their employer.

What is the reinsurance program for early retirees that is available to employers?

Effective 90 days after enactment until January 1, 2014, the new law creates a reinsurance program to provide financial assistance to employers who provide health insurance coverage to retirees from age 55 to 65 that are not otherwise eligible for Medicare. The program reimburses insurance plans for 80 percent of retiree claims between $15,000 and $90,000. Payments received by the plans must be used to lower the costs for retiree enrollees as well as active workers in the employer plan. Employers must apply to HHS to participate in the program.

Does the new law apply to self-funded plans?
A self-funded plan is a type of group health plan, so some provisions of the legislation will affect them, including the following:
1. - The restriction on preexisting conditions
  - Elimination of annual and lifetime benefit restrictions
  - Prohibition against policy rescissions
  - Coverage of adult dependents to age 26
  - Requirement to provide coverage of preventive care services with no cost sharing
  - Provision of uniform explanation of coverage documents and additional information in plain language as required by the federal HHS Secretary
  - Availability of an external appeals process
  - Prohibition on discrimination against individual participants based on health status
  - Prohibition on plans from discriminating against providers based on their scope of practice
  - Prohibition against requiring women to obtain referrals to see a participating physician for obstetrics or gynecological services
  - Requirement that emergency services must be covered without prior authorization, regardless of whether the provider is in-network or out-of-network. Out-of-network costs for emergency room services must be paid at the same cost sharing level as in-network services.
  - Reports to HHS on how benefits ensure quality of care
  - Prohibition on plans from discriminating against or penalizing individuals or employers based on their eligibility for subsidies
  - Limitations on annual enrollee cost sharing provisions
  - Prohibition on excessive waiting periods for new enrollees
  - For individuals who participate in a clinical trial, the health plan must continue to provide coverage of all services that the individual would normally have received under the terms of the insurance plan

Does the new law apply to Medicare Supplement plans?

The law includes several provisions that will have an impact on Medicare benefits and Medicare supplement plans. However, most of the changes apply to the underlying structure of the program and will not directly impact consumers. As HHS begins to evaluate and implement these provisions, more details will be provided regarding the potential impact on Medicare supplement benefit plans.

What is the CLASS Program? What are the benefits provided? How do I qualify?

By October 12, 2012, the HHS secretary must designate a new national voluntary insurance program for purchasing community living assistance services and support (CLASS). These benefits are intended to help individuals with disabling conditions to remain in their home or a community-based living residence. The program will provide eligible individuals with functional limitations a cash benefit of at least $50 per day to purchase non-medical services and the supports necessary to maintain community residence. The program is financed through voluntary payroll deductions and all working adults will be automatically enrolled in the program unless they choose to opt out.

Will my health care plan still be able to drop or rescind my coverage if I get sick?

Effective six months after enactment, insurance companies will be prohibited from arbitrarily dropping or rescinding your insurance coverage. An insurance company may only rescind coverage for fraud or intentional misrepresentation of material fact as prohibited by the terms of the policy.

Will an insurance company still be able to impose lifetime and/or annual limits on the dollar value of my health care coverage?

Effective within six months of enactment, all new and existing individual and group plans will be prohibited from placing lifetime limits on what they will pay for your medical care. Beginning in January 2014, all new and existing group health plans will be prohibited from using any annual limits. Prior to January 2014, HHS will determine the degree to which existing group health plans may impose annual limits on what they will pay for your medical care.

My insurance company wants to raise my rates. What recourse do I have?

There are several provisions in the new legislation that are designed to make insurance more affordable and provide oversight of rate increases. How those provisions will affect consumers may differ depending on how each state regulates health insurance rates.

The Office of Insurance Regulation (OIR) already reviews and approves or disapproves rates in the individual and small group markets based on actuarial justification. The office presently does not have authority to review rates in the large group and out-of-state group (usually purchased through an association) markets. The federal law does require that all plans pay out a certain percentage of premium on claims and quality. What is unclear is how that will be enforced.

Rates generally go up every year because the cost of insurance is directly tied to the cost of health care, which has risen every year for the last decade, at least. If you receive a rate increase, you can contact the Consumer Services Division of the Department of Financial Services, who can check to see if the rate increase was approved by OIR.

Federal Health Care Reform - Timeline and FAQs

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