Saturday, January 04, 2014
Federal health reform became law in March 2010 followed by the issuing of numerous regulations on details on how the new legislation will all be implemented. These requirements apply to plans at the end of their current policy year in 2014. Some of the new requirements are highlighted here:
● The new Advance Premium Tax Credit (APTC) for those who qualified based on their income and who enrolled for coverage through Access Health CT. The way this works:
+ the person pays a certain amount for their share of the premium, which is based on a percent of their income.
+ The APTC is the amount after the persons share of the premium is subtracted from the actual premium which is based on their age.
+ The APTC amount is sent each month to the health insurance company the person selected. They then bill the person each month for their share.
● Penalty for not having medical insurance: Individuals who do not enroll in a qualified individual or employer plan will have to pay a penalty at the end of 2014. It equals 1% of their income. It will increase to 2.5% in a couple years.
● Plan design requirements: Medical insurance plans can no longer have a lifetime limit and the maximum out of pocket expenses now follow the health savings account annual limits.
● How premiums are determined: The premium for a 62 year old can be no more than three times the rate for a 22 year old. Rate bands have been eliminated. The premium now goes up for each age. Rates for males and females are the same when the age is the same. The rate for a child from birth to age 20 is now .635 of the age 21 rates for the plan.
● MedicAID expansion: Connecticut has been very generous in providing medical coverage for children through the state’s Husky program. Adults whose income was around 70% of the federal poverty level (FPL) were also eligible for MedicAID coverage. Health reform increased the eligibility for adults to 138% of FPL.
● Small Business Tax Credit: Certain small businesses can quality for this tax credit if the coverage is purchased through the employer part of Access Health CT. The credit increases to 50% of the premium for 2014. An employer can qualify for the maximum credit if they have 10 or fewer employees, excluding the owner, and average salary for these employees is $25,000 or lower. Employers with up to 25 employees and whose average salary is $50,000 or lower can qualify for a lesser credit. The amount does not slope down from 25k to 50k but falls off rapidly. Many employers will not qualify for the max credit because they do not offer medical insurance.
● Taxes on medical insurance: When an person receives a quote for an individual medical plan three taxes, included in the premium are shown. A Health Insurance tax, a tax to support Access Health CT, and a reinsurance tax.
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● New employee waiting period. The maximum waiting period is now 90 days.
Questions on these new requirements? Call my Google voice line (860) 451-9793 for a free consultation on how federal health reform will work here in Conn.