Friday, October 2, 2009

Could This Also Be The Benefit Administrator’s Full Employment Act?

As President Barack Obama noted early this morning in response to the Senate Finance Committee finishing its version of health care reform, America's Healthy Future Act, “We are now closer than ever before to finally passing reform that will offer security to those who have coverage and affordable insurance to those who don’t.”

Closer than ever before stretches at least back to the mid-20th Century efforts of President Harry S. Truman to pass some type of national health legislation.

If the Finance Committee work is any indication, employers will have their work cut out for them once a final piece of legislation is agreed to by the Congress and signed by the President (yes, that seems the most likely outcome now).

We already know that employers think the general effects will be cost increases (see here and here) .

For those benefit managers and administrators who deal with plan details every day, what also will be important is how health reform will affect existing plans and policies. Here are just a few likely possibilities, based on the Finance Committee’ work:

An increase to 30% in the Health Insurance Portability and Accountability Act (HIPAA) cap on the cost of the employer-sponsored coverage a reward for wellness programs that require satisfaction of a standard related to a health factor.

A cap on annual health flexible spending account (FSA) elections, possibly $2,500.

An affordability test for employees in small firms that would allow these employees to receive tax credits to help pay for coverage. If employer-sponsored coverage cost an individual more than eight to 10 percent of his or her income, that person would be eligible to receive a Health Care Affordability Tax Credit in an exchange.

Add in coverage mandates in state or national exchanges, requirements to pay fees for those who are not covered by the employer plan, a host of new reporting and disclosure requirements, and various other effects on employer health plan provisions in ERISA, the Internal Revenue Code, and the Public Health Service Act.

Enough to keep benefits managers and administrators busy for quite some time.


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