Despite current Congressional activity and legal challenges surrounding health care reform, the implementation of the PPACA provisions will continue. Employers should be looking ahead and preparing for the major PPACA requirements that will take effect in future years. 

Dates with destiny: Critical dates for health care reform

Despite current Congressional activity and legal challenges surrounding health care reform, the implementation of the PPACA provisions will continue. Employers should be looking ahead and preparing for the major PPACA requirements that will take effect in future years.

 

Effective 2012

W-2 Reporting Requirement
Employers will be required to report the aggregate value of each employee's medical, vision, dental and certain supplemental benefits. This is optional for 2011.

 

Effective 2013

Health Care FSA Contribution Cap
A cap of $2,500 will be placed on the amount of funds an employee can save in a Health Care Flexible Spending Account (FSA). The limit will be adjusted annually in accordance with the U.S. Consumer Price Index.

Medicare Prescription Coverage
Subsidies to eliminate the "donut hole" gap in Medicare Part D coverage for prescription drugs will begin phasing in for completion by 2020.

Health Exchange Notification
Employers will be required to give a notice to their employees if they may be eligible to participate in one of the state-based health insurance exchanges.

 

Effective 2014

State Health Insurance Exchanges
States will be required to establish online health insurance exchanges or marketplaces to facilitate the purchase of coverage by individuals and small groups. If states do not fulfill this requirement, the federal government will create an exchange for them.

Individual Mandate
In what is proving to be one of the most controversial aspects of health care reform, and the basis for states' lawsuits challenging PPACA's constitutionality, individuals will be required to carry minimum essential health care coverage. Those who cannot demonstrate that they have coverage will be required to pay a penalty. However, certain individuals could be exempt.

Automatic Enrollment
Employers with more than 200 employees will be required to automatically enroll new full-time employees in health insurance coverage. Employers must also provide employees with an opportunity to opt out of coverage. The effective date of this requirement will be delayed until the government provides further guidance and regulations, which are expected to come by 2014.

'Play or Pay'
Employers with more than 50 employees will be penalized $2,000 per employee for not providing health coverage if their employees are eligible for a subsidy on insurance exchanges. The first 30 employees would be exempted from the penalty. Employers with insufficient coverage will also be subject to a penalty.

Adult Pre-existing Conditions
Group health plans will be required to eliminate any pre-existing condition exclusions for adults. The plans will also have to eliminate annual limits on essential benefits coverage for adults.

Waiting Period Restrictions
Employers will be required to eliminate waiting periods beyond 90 days when enrolling new employees in a group health plan.

Small Business Tax Credits
The 35% tax credit that went into effect in 2010 for businesses with fewer than 25 employees will increase to up to 50% of the cost of employees' premiums.

 

Effective 2017

State Health Insurance Exchanges
States may choose to allow large employers to offer coverage to their employees through the health insurance exchanges.

 

Effective 2018

Excise Tax
An excise tax will be applied to high-cost health care plans. High-cost health care plans have premiums of more than $10,200 for individuals and $27,500 for families, increased by a factor intended to reflect medical inflation. The 40% tax will apply to the amount of the premium in excess of the threshold.