Business Insurance December 13, 2010

By: Jerry Geisel

Business Insurance’s top story of 2010—enactment of comprehensive health care reform legislation—will continue to play out in 2011 and beyond.

The March passage of the legislation, President Barack Obama’s signature domestic issue, came after more than a year of legislative maneuvering.

The maneuvering heated up in 2010 when Scott Brown won the seat that Sen. Edward Kennedy, D-Mass., held until his death in August 2009. Until the Republican’s election, Democrats had 60 certain votes, enough to stop a filibuster. With Sen. Brown joining the fold, Republicans had the votes to successfully mount a filibuster.

Stunned, top Senate Democrats pondered their next move. By early March, they decided the health care reform bill would be considered under a legislative procedure known as reconciliation that requires a simple majority to win passage. By contrast, other measures require 60 votes to end debate.

President Obama endorsed the procedure and the measure received final approval from Congress within weeks, which the president then signed into law.

The impact of the new law hardly could be overstated. With its expansion of Medicaid and the creation of federal health insurance premium subsidies, more than 30 million uninsured U.S. residents will gain coverage.

For employers, the law meant a scramble to amend their plans to comply with provisions such as extending coverage to employees’ adult children up to age 26, eliminating lifetime dollar limits and providing full coverage of preventive services, effective Jan. 1, 2011, for calendar-year plans.

Many more changes for employers lie ahead. In 2013, they have to cap contributions to flexible spending accounts at $2,500 per year. Also in 2013, employers that provide prescription drug plans to Medicare-eligible retirees will lose part of a generous tax break.

Some employers already are analyzing what will be their biggest decision: whether it makes sense to drop their health care plans, pay a $2,000 per employee penalty that begins in 2014 and bump up employees’ salaries to partially offset the cost of coverage available to individuals through state insurance exchanges or should they still offer coverage.

However, GOP lawmakers in Congress have said they will try to repeal the law, while courts will rule on suits challenging fines on individuals who do not enroll in a qualified health plan.

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This entry was posted by Adam V. Russo on Wednesday, December 15th, 2010 at 9:47 am and is filed under Health Care Legislation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.