The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act, enacted March 23, 2010, describe changes in health care coverage to be implemented between now and 2020. This timeline offers a quick overview of the changes that will most directly affect employers and employees.  

Health care reform timeline for employers and employees

The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act, enacted March 23, 2010, describe changes in health care coverage to be implemented between now and 2020. This timeline offers a quick overview of the changes that will most directly affect employers and employees. 

  • Employers covered by the Fair Labor Standards Act (FLSA) must provide reasonable breaks and a private space (not a restroom) for mothers to express milk for their infants who are up to one year old. The requirement does not apply to small employers (fewer than 50 employees) if it would create undue hardship. The requirement is effective on enactment, but enforcement will not begin until Department of Labor issues guidance defining terms and enforcement procedures.
  • Employers who employ more than 200 employees must automatically enroll new full-time employees in coverage. Employers must also provide employees with an opportunity to opt out of coverage. Clarification on the effective date of this provision is forthcoming.

Effective 90 days after enactment 

  • Temporary, national high-risk pool created to provide health coverage for individuals with pre-existing medical conditions.
  • Temporary re-insurance pool created for employer-sponsored plans providing health care coverage to retirees over 55 who are not eligible for Medicare.
  • Ten percent tax on indoor tanning services applied after July 1, 2010.

Effective the first plan year beginning on or after September 23, 2010 

  • Dependent health care coverage extended to adult children up to age 26.
  • Denial of coverage of pre-existing conditions prohibited for children.
  • Limits on lifetime dollar value of health care coverage prohibited.
  • Rescinding health care coverage prohibited, except in case of fraud on part of beneficiary.
  • Health plans required to provide preventive care without cost sharing, including certain immunizations; preventive care for infants, children, and adolescents; and certain preventive care and screenings for women.
  • Prohibition on requiring authorization of the primary care physician before a patient can see an obstetrician or gynecologist.
  • Tax credits provided to small businesses (fewer than 25 employees and average salary less than $50,000) that provide employees health care coverage. The employer must pay at least 50 percent of the cost of coverage to qualify.

2010: other effective dates 

  • $250 rebate to Medicare Part D beneficiaries who reach the "donut hole" coverage gap in 2010 ($2,830 in total drug costs). Rebates expected to begin in July.
  • Health plans required to report percentage of premium dollars spent on clinical services, quality, and other activities, and (effective January 1, 2011) to pay rebates to consumers if spending on clinical services and quality is below a target level (85 percent for large group plans, 80 percent for small group and individual plans).
  • Adoption tax credit and adoptions assistance exclusion increased by $1000. Effective for taxable years after 12/31/2009.
  • Employers required to report value of employer-provided health coverage on employees' W-2 forms.
  • Grants provided to small businesses to establish wellness programs.
  • Pharmaceutical manufacturers required to provide 50 percent discount on brand-name drugs purchased by Medicare Part D beneficiaries within the "donut hole" gap in coverage.
  • Over-the-counter medications no longer eligible for purchase through HSA or FSA plans unless prescribed by a physician (to make consistent with rules used for itemized deduction of medical expenses).
  • Tax on early withdrawal from HSA (before age 65 for non-medical expenses) increased from 10 to 20 percent.
  • Long-term insurance program, financed by voluntary payroll deductions, created to provide benefits to adults who become disabled.
  • $2,500 cap set on health FSA contributions (to be raised in subsequent years to keep pace with increases in the Consumer Price Index).
  • Deduction eliminated for employers who receive Medicare Part D retiree drug subsidy payments.
  • Begin phase-in of subsidies to eliminate "donut hole" gap in Medicare Part D coverage for prescription drugs by 2020.
  • Threshold for itemized deductions for medical expenses increased from 7.5 to 10 percent. Taxpayers over age 65 can claim itemized deductions at 7.5 percent of adjusted gross income through 2016.
  • Medicare Part A (hospital insurance) tax rate on wages increased from 1.45 to 2.35 percent on earnings over $200,000 for individual taxpayers and $250,000 for married couples filing jointly. Tax of 3.8 percent applied to unearned income for higher-income taxpayers.
  • Excise tax of 2.3 percent on the sale of specified medical devices.
  • States required to establish health benefit exchanges to facilitate the purchase of health insurance by individuals and small groups.
  • Individuals required to have minimum essential health care coverage. Those who cannot demonstrate they have coverage will be required to pay a penalty equal to the greater of $95 or 1 percent of taxable income in 2014 (increases yearly). Individuals, who cannot find a premium that is less than 8 percent of their income, or whose incomes are below the tax filing threshold are exempt.
  • Employers with more than 50 employees penalized for not providing health coverage (if employees without coverage are eligible for a subsidy on insurance exchanges). Penalty is $2,000 per employee, with first 30 employees exempted.
  • Employers that offer coverage and contribute to the cost of coverage are required to offer "free choice vouchers" to employees with incomes below 400 percent of the federal poverty level and for whom the employer coverage costs between 8 and 9.8 percent of the employee's household income to purchase health plans through the exchanges.
  • Insurers must cover all individuals and employers that apply for coverage.
  • Denial of coverage of pre-existing conditions prohibited for adults.
  • Denial of coverage for participation in clinical trials prohibited.
  • Insurance companies limited in charging higher rates for higher-risk beneficiaries. Factors allowed for consideration limited to age, geography, family size, and tobacco use.
  • Annual dollar limits on essential health coverage prohibited.
  • All qualified health plans within an exchange and in the individual and small group markets required to offer the essential health benefits package which includes specified benefits, limits on cost-sharing, and minimum actuarial values in coverage.
  • Increased small business tax credit for health coverage provided to employees through an exchange.
  • States may choose to allow large employers to offer coverage to their employees through the health benefit exchanges.
  • Excise tax applied to high-cost health care plans, those with premiums of more than $10,200 for individuals and $27,500 for families, increased by a factor intended to reflect medical inflation. The 40 percent tax applies to the amount of the premium in excess of the threshold.
  • Elimination of Medicare Part D "donut hole" coverage gap for generic and brand-name drugs.