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  • PPACA Mandates Refresher

    There have been a great deal of news coverage regarding the Patient Protection and Affordable Care Act (PPACA) and possible changes to the law.  We dont know yet how the laws  yet to be implemented will be effected,  we will keep you posted.  Below are some of the key mandates and provisions of the laws that have alreadybeen implementedfor employers and employees thus far:

     Grandfathered Health Plans

    The term “grandfathered plan” means an employer-sponsored health plan that was in existence on March 23, 2010. Grandfathered plans are exempt from some, but not all, of PPACA’s requirements. Employers can lose this grandfathered status if they make plan changes that significantly cut benefits or increase costs for employees. Employers with group health plans may change insurance carriers and still maintain their grandfathered status.

     Breaks for Nursing Mothers

    Employers are to provide nursing mothers with reasonable breaks to express breast milk for their nursing children. Employers are required to provide these breaks for up to one year after a child’s birth and the breaks need not be paid. Employers are also required to provide a private space for expressing milk, other than a bathroom. 

     Age-26 Mandate and Pre-existing Conditions for Children

    Effective with the first plan year beginning on or after September 23, 2010, employers providing dependent coverage are required to cover their employees’ adult children up to age 26, regardless of whether the child is a student, resides with the participant or is declared as a dependent on a parent’s income tax return. This provision does not apply to dependents that are eligible under another group plan. In addition, group health plans are not allowed to deny coverage to children under age 19 with pre-existing conditions.


    Employer health plans are now prohibited from retroactively rescinding or canceling health care coverage, except in the case of fraud or intentional misrepresentation.

     Preventive Care Changes

    Beginning in 2011, health plans are required to provide certain preventive care services without cost sharing, including some immunizations and annual or preventive exams for adults, infants, children and teens. In addition, patients can no longer be required to obtain authorization from a primary care physician before seeing an obstetrician or gynecologist.

     Lifetime and Annual Limits

    Employer-provided coverage is now required to eliminate lifetime limits on essential benefits coverage, and may only place “restricted” annual limits on essential benefits for the time being.

     Over-the-Counter Medications

    Beginning January 2011, individuals may no longer use funds from their Flexible Spending Accounts (FSAs), Health Savings Accounts (HSAs) or Health Reimbursement Arrangements (HRAs) for over-the-counter (OTC) medications unless prescribed. 

     HSA Penalty Increased

    Effective January 2011, PPACA increases the penalty for withdrawing pretax funds from an HSA for non-eligible expenses from 10% to 20% in an effort to discourage unauthorized use.

    Small Business Tax Credit

    Health care reform provides for a tax credit for small businesses (those with fewer than 25 full-time employees and average wages less than $50,000) that provide employer-sponsored health insurance to their employees. Employers were able to apply for this credit beginning in 2010.

     Medical Loss Ratios

    Beginning January 2011, health insurance companies are required to spend at least 80% to 85% (depending on the plan’s size) of premiums on medical care and quality improvements for patients.

     Health Insurance Exchanges

    While exchanges are not required to be in operation until 2014, state health insurance exchanges have already received much attention. Many states have started to implement a state-wide insurance exchange system.

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