The Patient Protection and Affordable Care Act (PPACA) includes provisions expected to have an impact in 2010. Visit the "Top 5 Things to Know" for Small Employers and explore Healthcare Reform website for complete information. We have provided a brief description of three important changes below:
Extension of Dependent Coverage:
Effective September 23, 2010, all health plans will need to cover dependent children up to age 26. Please see US Department of Health and Human Services Q & A regarding coverage for additional information. Coverage is available to the members' child regardless of their marital status, financial dependence, residency, or school status. It is important to note that "grandfathered" plans can exclude adult children who have access to other employer-based coverage. This exception expires for plan years beginning on or after January 1, 2014. It is also important to note that dependent coverage is only extended to the child, not the child's dependents (i.e. if the 25-year daughter of a covered employee is married, the insurer is only required to cover the daughter, NOT the son-inlaw). Any applicable state extensions still apply (i.e. NJ covers dependent children until age 31)
Small Employer Tax Credit:
If you have up to 25 employees, pay average annual wages below $50,000, and provide health insurance, you may qualify for a small business tax credit of up to 35% (up to 25% for non-profits) to offset premiums paid. Please see IRS FAQ on Small Business Health Tax Credit. Starting in 2014, the tax credit goes up to 50% (up to 35% for non-profits) for qualifying businesses.
Early Retiree Reinsurance Program:
This program can benefit employers who contribute toward health benefits for early retirees (age 55 and older, but not yet Medicare eligible) and their spouses, surviving spouses and dependents. Please note that this program does have significant requirements, such as having programs and procedures in place likely to generate cost savings for participants with chronic and high-cost conditions (i.e. disease management programs) and having policies and procedures in place to detect fraud, waste and abuse. Please see ERRP website for additional information/requirements.
This information should be considered a summary and is not considered legal or compliance guidance.
Source:
www.healthcare.gov
www.hhs.gov
www.irs.gov
www.errp.gov
