The Patient Protection and Affordable Care Act (PPACA) was signed into law on March 23, 2010, and the related Health Care and Education Reconciliation Act of 2010, which made changes to PPACA, was signed into law on March 30, 2010.
These two statutes — “the health care reform law” — make sweeping changes to existing legislation governing employer-sponsored group health plans, individual health coverage and governmental health programs.
“The health care reform law is the most sweeping employee health care benefits legislation to impact employers, employees and health care vendors since ERISA,” says Sharon Blichfeldt, a vice president and senior health and benefits account executive for Aon Risk Services Central, Inc.
Smart Business spoke with Blichfeldt about the health care reform law and how it will impact employers.
What employee benefits are impacted by the health care reform law?
The new provisions affect insured and self-insured employer health plans; health coverage for employees, spouses and dependents; and retiree health coverage. The health reform provisions generally do not apply to group health plans that have fewer than two participants who are current employees, or to plans that provide ‘excepted’ benefits, such as stand alone dental or vision plans, flexible spending accounts, etc.
Is the law focused on any specific types of benefit coverage?
Yes. The specific types of coverage that are most impacted by the law are those defined as ‘essential health benefits,’ which include ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance abuse disorder services, including behavioral health treatment; prescription drugs; rehabilitative and facilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care.
Why is this the most sweeping legislation to impact employers since ERISA?
This legislation impacts employer health care plans across all levels. For example, the law requires that health plans extend coverage for dependent children until age 26. The child can be married, does not have to be a full-time student, and does not have to otherwise be considered a dependent.
Other high profile requirements of the legislation include removal of plan exclusions and limitations and revision of plan cost-sharing provisions. There are new rules around the health plan’s ability to impose preexisting condition exclusions on new plan participants. Lifetime maximums and annual benefit limitations must be removed for essential health benefits. Other cost-sharing provisions for plan participants, such as deductibles and coinsurance/copayments, must comply with preset limits imposed by the regulations.
