ACA News & Publications

Healthcare Reform Legislation

March 23, 2010

House Passes Health Reform Legislation

As always Burnham Benefits strives to keep our clients informed of pertinent legislative updates. However, as healthcare reform is one of the largest legislative changes to hit our country, we anticipate there will be updates on a daily basis. We commit to keeping you informed without inundating you with information.

After intense negotiations that included a budget reconciliation process, the House of Representatives passed healthcare reform legislation. The House passed both H.R. 3590, the Patient Protection and Affordable Care Act (the Affordable Care Act), and H.R. 4872, the Health Care and Education Reconciliation Act of 2010 (the Reconciliation Act) on Sunday, March 21, 2010. President Obama signed the Affordable Care Act this morning, Tuesday, March 23, 2010.

Some of the most notable items that go into effect in the first year if unchanged through the Reconciliation Act would:

  • Provide a $250 rebate this year to Medicare prescription drug beneficiaries whose initial benefits run out.
  • Provide immediate access to high‐risk pools for people with no insurance because of pre‐existing conditions.
  • Bar insurers from denying people coverage when they get sick.
  • Bar insurers from denying coverage to children with pre‐existing conditions.
  • Bar insurers from imposing lifetime caps on coverage.
  • Require insurers to allow people to stay on their parents' policies until they turn 26.

The proposed long‐term timeline for the health reform legislation beyond 2010 if unchanged through the Reconciliation Act includes:

2011 – Would require individual and small group market plans to spend 80 percent of premium dollars on medical services; large group plans would have to spend at least 85 percent.

2011 – Flexible Spending Account limit for medical reimbursement will be capped at $2,500 per year; currently limits are set by employers and are limited to 100% of compensation.

2013 – Would increase the Medicare payroll tax and expand it to dividend, interest and other unearned income for singles earning more than $200,000 and joint filers making more than $250,000.

2014 – Would provide subsidies for families earning up to 400 percent of poverty level (currently about $88,000 a year) to purchase health insurance. Would require most employers to provide coverage or face penalties. Would require most people to obtain coverage or face penalties.

2018 – Would impose a 40 percent excise tax on high‐end insurance policies.

2019 – Would expand health insurance coverage to 32 million people.

The Senate is expected to take up the Health Care Reconciliation Act this week, and Senate Democrats have the goal of send‐ ing a final package to the White House before its scheduled April recess begins on March 29. If the Senate makes any changes, the House and the Senate versions will go to a conference of House and Senate negotiators. An agreement by nego‐ tiators will then go back to the House and the Senate for a simple majority final vote by the two chambers under strict rules that set a timetable for action and that prohibit any amendments. Assuming passage of this conference committee agree‐ ment, the Reconciliation Act will be sent to President Obama for his signature.

Burnham Benefits will continue to keep you informed of changes leading up to the final signing of the Reconciliation Act. Please be assured that we are working diligently to keep you updated and provide guidance on how this will affect em‐ ployers, employees and individuals in general.

Should you have additional questions or would like to receive additional information, please contact your Burnham Benefits representative.

Sources: Speaker of the House, Congressional Budget Office, Kaiser Family Foundation, Kaiser Health News and Spencers.

For More Information
For more information about this ACA Pathways or about any other health care reform-related provisions, please contact your Burnham Benefits consultant or Burnham Benefits at:

Burnham Benefits

This ACA Pathways is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.

The information contained in this ACA Pathways includes emerging health care news from a limited perspective and does not encompass all views. The information was selected from a wide range of sources selected on the basis of their potential impact on employers and/or their employee benefit plans. For more information, please contact Burnham Benefits.

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