Small Business Tax Credits (effective tax year 2010)

Applies to: Businesses

What are the small business tax credits?

The small business health care tax credit provides a sliding-scale credit your business can claim starting with the 2010 tax return for qualified small employers who provide health insurance to their employees. Eligible small employers may qualify for a credit worth up to 35 percent of premiums they paid in 2010.

What does it mean to me?

If your small business meets the requirements, you can file for the tax credit beginning with your 2010 tax return.

Grandfathering (effective March 23, 2010)

Applies to: Businesses and Individuals

What is grandfathering?

Individual and group health plans issued on or before March 23, 2010 can be "grandfathered," which means they can keep their current plans intact and do not have to comply with some of the provisions of the new law, such as 100 percent coverage of preventive care. Plans must meet the following criteria to be grandfathered:

  • no changes to insurance carrier, policy, certificate, or contract;
  • benefits to diagnose or treat a particular condition are not terminated;
  • no increases in coinsurance;
  • increases in deductibles or copayments must meet the cost-adjustment test established by the reform law;
  • no decreases in the amount of the employer subsidy towards the total cost of the premium that exceed 5 percent.

What does this mean to me?

Health insurers do not decide the grandfathering status for employers. Since we cannot provide you with professional advice, employers may want to consult with their attorney or tax advisor to determine whether their plan is able to maintain grandfathering status.

Where can I learn more?

Grandfathering frequently-asked questions

Donut Hole Rebates (effective March 23, 2010)

Applies to: Individuals

What is the donut hole rebate?

Effective this year, beneficiaries with Medicare Part D who reach the "donut hole" will receive a one-time, non-taxable $250 rebate. The donut hole is the gap reached when Part D prescription drug costs go over $2,830. At that point, you are responsible for the entire cost of your prescription drugs (versus making copayments) – at least until your out-of-pocket costs reach $4,550.

In January 2011, Part D enrollees who enter the donut hole will receive a 50 percent discount on brand-name and biologic drugs in the coverage gap.

What does it mean to me?

This year: If you’re receiving Medicare benefits and are not already receiving Medicare Extra Help, and your prescription drug coverage reaches the donut hole in 2010, you will automatically be mailed a one-time $250 rebate check. There is nothing you need to do. Checks are being mailed monthly throughout the year as beneficiaries reach the "donut hole. "

Next year: The 50 percent discount will be applied to all brand-name and biologic drugs in the donut hole. This can mean significant out-of-pocket savings for you.

In the future: Over the next ten years, Medicare will phase in more discounts on brand-name and generic drugs until your coinsurance in the donut hole phases down to 25 percent in 2020.

Where can I learn more?

AmeriHealthmedicare.com

Early Retiree Reinsurance (effective June 1, 2010)

Applies to: Businesses

What is the early retiree reinsurance?

The U.S. Department of Health and Human Services (HHS) will reimburse participating employment-based programs for a portion of the cost of providing health coverage to early retirees (age 55 or older, non-active employees, ineligible for Medicare) and eligible spouses, surviving spouses, and dependents.

What does this mean to me?

Eighty percent of retiree claims between $15,000 and $90,000 within employer-based health plans will be reimbursed.

Where can I learn more?

If your company meets the eligibility requirements, you can apply now for the temporary early retiree reinsurance program through the Health and Human Services website where you’ll find the application and fact sheets, FAQs, and instructions. However, keep in mind that there is a limited amount of money available, and thousands of applications have already been submitted.

100 percent coverage for preventive care (effective October 1, 2010)

Applies to: Businesses, Individuals and Providers

What is 100 percent coverage for preventive care?

Individual, group, and self-funded health insurance plans must cover certain preventive care services without member cost-sharing. Grandfathered plans are exempt.

What does this mean to me?

AmeriHealth members will not be charged for certain preventive care services, such as cancer screenings or child immunizations.

What is AmeriHealth doing to help?

All non-grandfathered plans will now include 100 percent coverage for preventive services.

Extension of Coverage for Dependents to age 26 (effective October 1, 2010)

Applies to: Businesses and Individuals

What is the extension for dependents to age 26?

All health plans covering dependents must continue to make that coverage available until the dependent’s 26th birthday, regardless of the dependent’s marital or student status. Policyholders’ grandchildren are not covered. Until 2014, grandfathered group plans are not required to cover adult dependents if they are eligible to enroll in other employer-sponsored group health plans.

What does this mean to me?

If your current plan includes dependent coverage, you will be able to keep/add dependents on your policy until they reach the age of 26.

How to reinstate your child’s coverage.

Individuals whose coverage ended, or who were denied coverage (or were not eligible for coverage), because the availability of dependent coverage of children ended before attainment of age 26 are eligible to re-enroll in their health plan. Individuals may request enrollment for such children for 30 days from the date of notice. Enrollment will be effective retroactively to the first day of the first plan year beginning on or after September 23, 2010. For more information, contact your plan administrator.

What is AmeriHealth doing to help?

AmeriHealth instituted a policy for continuous coverage for existing dependents beginning June 1, 2010, ahead of the government deadline.

Where can I learn more?

If you have dependent children over age 26 in need of health insurance, be sure to visit amerihealth.com or call 1-800-263-1410 for more information about our individual coverage options, or visit Dependent to age 26 FAQs.

Non-discriminatory Plans (effective October 1, 2010)

Applies to: Businesses

What does the law say about non-discriminatory plans?

Fully insured group plans are prohibited from establishing eligibility rules for coverage that favor highly compensated individuals. The benefits under such plans may not discriminate in favor of this group either.Grandfathered plans are exempt.

What does this mean to me?

Employers with non-grandfathered fully insured group health plans will need to make sure that their benefit plans comply with this provision beginning on the first renewal after September 23, 2010.

Rescissions Ban (effective October 1 2010)

Applies to: Businesses and Individuals

What is the ban on rescissions?

A new ban on rescissions prohibits all health plans – even grandfathered plans – from rescinding coverage of subscribers, except in cases involving fraud, nonpayment of premium, or intentional misrepresentation of material facts under the terms of the health plan.

What does this mean to me?

You cannot be retroactively cancelled from your plan unless you provide fraudulent information or do not pay your premiums. Prior notice must be provided at time of cancellation, and any cancellation must not violate the law.

What is AmeriHealth doing to help?

AmeriHealth remains in compliance with the new law, and does not rescind coverage except in cases where a subscriber has committed fraud.

High Risk Pool/NJ Protect (effective July 2010)

Applies to: Individuals

What is the high-risk pool?

The pool provides temporary, transitional health coverage to U.S. citizens and nationals, lawfully present in the United States, who have been uninsured for at least six months, have a pre-existing medical condition, and are unable to afford or access individual coverage in the period before health insurance exchanges are operating in 2014.

What does it mean to me?

NJ Protect is a new health insurance option for uninsured New Jerseyans with pre-existing medical conditions. For more information on who is eligible and how to apply, click here.

Change in Medicare Enrollment Period (effective March 23, 2010)

Applies to: Individuals

What is the change in the Medicare enrollment period?

People with Medicare can enroll in a Medicare Advantage plan or Part D plan during the six-week Annual Election period (AEP), from November 15 through December 31 for 2010, and from October 15 through December 7 for every year after. Previously, you could also switch plans – from one carrier’s plan to another or within the same carrier – during the Open Enrollment Period (OEP), from January 1 through March 31. Beginning in 2010, however, the only time most seniors can enroll in a Medicare Advantage Plan is during AEP. People with Medicare can enroll in a Medicare Advantage plan or Part D plan during the six-week Annual Election period (AEP), from November 15 through December 31 for 2010, and from October 15 through December 7 for every year after. Previously, you could also switch plans – from one carrier’s plan to another or within the same carrier – during the Open Enrollment Period (OEP), from January 1 through March 31. Beginning in 2010, however, the only time most seniors can enroll in a Medicare Advantage Plan is during AEP.

What does this mean to me?

Seniors can no longer switch plans during the OEP (January 1 through March 31), but a new disenrollment period will extend for 45 days at the start of each year, from January 1 through February 15, when Medicare Advantage enrollees may drop their plans for Original Medicare and enroll in a stand-alone Part D plan. But once most seniors leave Medicare Advantage, they cannot re-enroll until the next AEP. Medicare Advantage and Part D carriers post the next year’s plans and benefits online, usually in October of the prior year; at that time, you should talk to your insurance company, conduct your research, and make the best decision given your circumstances.

What is AmeriHealth doing to help?

AmeriHealth helps you navigate the complexities of health care reform’s effect on seniors on our website where you can compare plan options, find a pharmacy, learn more about Medicare, and more.

Where can I learn more?

AmeriHealthmedicare.com
Medicare.gov

Internal Appeals and External Reviews (effective October 1, 2010)

Applies to: Businesses and Individuals

What are the changes to the appeals and reviews process?

Non-grandfathered health insurance plans must have in place a protocol for internal appeals and external review for coverage determinations and claims decisions.

What does this mean to me?

The new law requires that insurers inform you of available internal appeals and external review processes, plus offer claimants assistance with the internal appeals and external review processes concerning decisions made by your insurer. Insurers also must allow you to review your file and present additional evidence during the internal appeals process. Your health plan must provide continued coverage pending the outcome of the internal appeals process. However, these provisions do not apply if your plan is grandfathered.

What is AmeriHealth doing to help?

AmeriHealth will keep its enrollees updated of changes to its internal appeals and external review processes. AmeriHealth intends to comply with the new provisions of health care reform as they pertain to the internal appeals and external review processes, and will provide you with ongoing updates and information as we implement the new regulations.

Elimination of lifetime maximums and restrictions on annual limits (effective October 1, 2010)

Applies to: Businesses and Individuals

What are the changes to lifetime and annual limits on care?

All health plans, including grandfathered plans are prohibited from imposing limits on the dollar value of essential health benefits during your lifetime; they may, however, impose an annual limit on the dollar value of such benefits for plans that go into effect before 2014. For plan years after January 1, 2014, plans will be prohibited from imposing any annual dollar limits on essential health benefits.

What does this mean to me?

A need for costly medical care will not exhaust your health plan coverage going forward, and if your lifetime benefits were exhausted prior to the new law taking effect, you may be able to reinstate your coverage. AmeriHealth is eliminating annual and lifetime limits on all plans effective October 1, 2010, and will not phase these limits in as the law stipulates.

The law defines restricted annual limits as:

  • $750,000 for plan years beginning on or after September 23, 2010, but before September 23, 2011
  • $1.25 million for plan years beginning on or after September 23, 2011, but before September 23, 2012
  • $2 million for plan years beginning on or after September 23, 2012, but before January 1, 2014.
The limits are applied to individuals, so each covered person has his or her own limit. Flexible Spending Accounts (FSA) Health Savings Accounts (HSA) Medical Savings Accounts (MSA) and Health Reimbursement Accounts (HRA) are not subject to the restrictions on annual limits.

What is AmeriHealth doing to help?

AmeriHealth is eliminating annual and lifetime limits on all plans effective October 1, 2010, and will not phase these limits in as the law stipulates.

Prohibition of pre-existing condition exclusions for children under 19 (effective October 1, 2010)

Applies to: Businesses and Indviduals

What is it?

Most health plans, even grandfathered ones, may not deny coverage of or benefits to children under age 19 who have a preexisting condition. New rules issued by HHS allow for insurers to set specific enrollment times for the coverage. Prohibition of pre-existing condition exclusions will extend to adults in 2014. Currently, this prohibition does not apply to grandfathered individual health insurance coverage.

What does this mean to me?

If you are the parent or guardian of a child under 19, your health plan cannot deny your child coverage or benefits based on a preexisting condition. If such coverage was previously denied, contact your health plan to reapply for coverage once the provision goes into effect.

Coverage for Emergency Services (effective October 1 2010)

Applies to: Businesses, Individuals and Providers

What is it?

The law provides that individual plans, group health insurance plans, and self-funded plans that cover hospital emergency services must do so without prior authorization, whether the provider participates in the health plan’s network or not. A subscriber’s cost sharing requirements for out-of-network emergency services must be the same as those applied to in-network services. Grandfathered plans are exempt.

What does this mean to me?

You will be paying the same level of cost-sharing for emergency services regardless of whether you stay in-network or go out of the network for the emergency services. Out-of-network providers may, however, also balance bill payments for the difference between the providers’ charges and the amount collected from the plan and from your copayment or coinsurance amount.

What is AmeriHealth doing to help?

AmeriHealth currently complies with this provision.

Quality of Care Reporting (effective MONTH 2012)

Applies to: Businesses

What is the Quality of Care Reporting requirement?

The quality of care reporting requirement provides that all individual, group, and self-funded plans – with the exception of grandfathered plans – must submit an annual report to the U.S. Department of Health and Human Services (HHS), and to enrollees during the open enrollment period, to describe how the health plan’s benefits and provider reimbursement policies improve quality of care, including wellness and health promotion activities.

What does this mean to me?

You will receive information on your plan’s quality and wellness programs during the open enrollment period.

What is AmeriHealth doing to help?

AmeriHealth is an industry leader in offering you high-quality preventive and wellness programs, and you can count on us to continue to lead by providing full disclosure on the quality and effectiveness of these services.

Choosing doctors

Applies to: Businesses, Individuals and Providers

What changes are there to a member’s ability to choose their primary care physicians?

All health plans – except those that are grandfathered – must allow members to designate any participating primary care physician (PCP) or pediatrician (for a child) who is available to accept the member, when that designation is required by the plan. All health plans – except those that are grandfathered – must allow members to designate any participating primary care physician (PCP) or pediatrician (for a child) who is available to accept the member, when that designation is required by the plan.

What does this mean to me?

You may choose an OB/GYN as your primary care physician, and you do not need a referral to see that doctor. Also, you may select a pediatrician or OB/GYN specialist as your PCP.

What is AmeriHealth doing to help?

AmeriHealth currently complies with this provision.

Tax changes to health care savings and spending accounts

Applies to: Businesses and Individuals

This provision changes how you can use distributions from Health Savings Accounts (HSAs), Flexible Spending Accounts (FSAs), Archer Medical Spending Accounts (MSAs), and Health Reimbursement Accounts (HRAs). You may no longer use this money tax free to pay for over-the-counter medications and drugs, excluding insulin and doctor-prescribed medications.

What does it mean to me?

You will not be able to use any of these accounts for almost all over-the-counter drugs. A tax penalty on distributions from HSAs that are not used for qualified medical expenses increases from 10 percent to 20 percent; for MSAs it increases from 15 percent to 20 percent of the amount includable in gross income.

Where can I learn more?

IRS.gov

Medical loss ratio rebates

Applies to: Businesses

The law requires that at least 80 percent of premiums that health insurers collect must be applied to medical care for subscribers covered by individual health insurance plans and small employers and at least 85 percent of premiums must be applied to medical care for subscribers covered by large employer-based health plans. This amount is known as the medical loss ratio (MLR).

Insurers that don’t meet these requirements may be required to issue customer rebates. The Department of Health and Human Services (HHS) will determine whether any rebate would be issued to the group or directly to the individual member. This provision applies to all plans except self-funded plans.

What does this mean to me?

AmeriHealth is a growing group of health care plans with its base in the states of New Jersey, Delaware, and Pennsylvania, which has grown to more than 265,000 members since its inception in 1995.

W-2 disclosure of health plan value

Applies to: Businesses and Individuals

The provision requires employers to disclose the aggregate value of an employee’s employer-sponsored coverage for the year on the employee’s 2011 W-2 Form, which will first be distributed in early 2012.

Medicare payroll tax

Applies to: Businesses and Individuals

The Medicare payroll tax will increase by 0.9 percent on individuals making more than $200,000 and couples making more than $250,000. Unearned income, which has been exempt from the payroll tax, will be subject to a 3.8 percent tax.

Flexible spending account (FSA) limits

Applies to: Businesses and Individuals

The law says FSAs may not allow employees to annually defer salary in excess of $2,500 into a health care FSA. Employers have the option to limit their employees’ annual elections further.

What does it mean to me?

Effective for tax years beginning after December 31, 2012, your maximum pretax contribution is $2,500. Further salary deferrals are not allowed.

Where can I learn more?

Check with your employer’s health benefits administrator if you have questions regarding FSA limits.

Medical device sales tax

Applies to: Businesses and Individuals

Medical device manufacturers will pay a 2.9% sales tax on products sold, excluding eyeglasses, contact lenses, and hearing aids. If you require a medical device, such as a heart pacemaker or other device included in the sales tax, the manufacturer’s increased cost may be passed on to you.

Mandatory insurance for individuals

Applies to: Individuals

The law requires everyone to purchase health care coverage by 2014 or pay a penalty.

What does it mean to me?

If you are not covered, and do not purchase insurance as of January 1, 2014, the federal government will charge you a penalty of $95, or 1 percent of your income. The penalties increase each year to a total of 2.5 percent of income or $695, whichever is greater by 2016.

Mandatory insurance for employers

Applies to: Businesses

Employers with more than 50 employees who do not offer health benefits and whose workers get subsidized coverage through an exchange, will be charged a $2,000 fee for each uninsured employee. The first 30 employees are exempt from the penalty.

Federal subsidies to buy insurance

Applies to: Individuals

Consumers who purchase coverage on their own may qualify for federal subsidies to help offset premiums. The Congressional Budget Office estimates that about 20 million American households will be eligible for subsidies. Federal agencies will determine how subsidies will be paid.

State-based Health Exchanges

Applies to: Businesses and Individuals

New state-based exchanged will be set up in 2014 where consumers and small businesses can simply and quickly shop for health insurance and compare products and prices. Exchanges will work with state insurance departments to set and enforce insurance reforms and protections.

Essential benefits requirement

The law defines an essential health benefits package that all qualified health plans offered through the exchange must cover, at a minimum.

What does it mean to me?

Your qualified health plan, will be required to provide a range of benefits determined as “essential.” Some preventive care services will be included as well, as recommended by the Centers for Disease Control and Prevention. In addition, the plans must cover pediatric services, including vision and oral care.

Exclusion prohibition for pre-existing conditions

Applies to: Individuals

Health plans, even grandfathered ones, may not deny coverage of or benefits to individuals who wish to purchase health insurance. In 2010, exclusion due to a preexisting condition was prohibited for individuals under 19, and that prohibition now includes adults in 2014.

Expansion of Medicaid

Applies to: Businesses and Individuals

From 2014 to 2016, the federal government will pay all costs for covering newly eligible Medicaid beneficiaries. The income allowance for Medicaid will increase to 133 percent of the federal poverty level. If you are among the 15 million uninsured and Medicaid-eligible individuals during this two-year period, you may want to consider applying for this federal-state program.

Where can I learn more?

HHS Centers for Medicare and Medicaid Services

Penalty increases for not purchasing insurance

Applies to: Individuals

The law requires everyone to purchase health care coverage by 2014 or pay a penalty. In 2015, the $95 or 1 percent penalty increases to $325 or 2 percent of income, whichever is greater.

Penalty increases for not purchasing insurance

Applies to: Individuals

The law requires everyone to purchase health care coverage by 2014 or pay a penalty. In 2016, the $325 or 2 percent penalty increases to $695 or 2.5 percent of income, whichever is greater.

Coverage across state lines

Applies to: Individuals

This allows consumers to purchase health insurance from insurers outside of their state. The theory holds that competition will foster lower prices for health coverage. If you are considering purchasing health coverage for you, your family, or your business, you would be able to consider coverage options outside of the state in which you reside or operate your business.

Large company exchange participation

Applies to: Businesses

Companies with over 100 employees may be allowed to participate in state-based health exchanges. An exchange is a national or state-by-state marketplace where consumers and small businesses can simply and quickly shop for health insurance and compare products and prices. Exchanges would work with state insurance departments to set and enforce insurance reforms and protections.

Effective in 2018

Excise tax on "Cadillac Plans"

Applies to: Businesses and Individuals

This provision adds a 40 percent nondeductible excise or "Cadillac" tax on generous health plans ($27,500 for a family plan and $10,200 for an individual plan). If you are covered by a comprehensive health plan with no deductible or otherwise have a plan that would be considered a "Cadillac" plan, the amount you spend on that plan will be taxed at the rate of 40 percent beginning in 2018.

Elimination of "donut hole" coverage

Applies to: Individuals

The donut hole coverage gap for Medicare prescription benefits is fully phased out. People who are eligible for Part D coverage will continue to pay the standard 25 percent of their drug costs until reaching the threshold for Medicare catastrophic coverage.