Health-Care Reform -- Six Months Later

Health Care Reform – Six Months Later

September 23, 2010

FEI Summary

Today marks a milestone in the ongoing effort to reform the nation’s health-care system. Six months ago, President Barack Obama signed the Patient Protection and Affordable Care Act (PPACA). PPACA is seen as the most far-reaching and sweeping piece of social legislation since President Lyndon Johnson’s administration in the mid-1960’s. Today is also the date that a number of new rules and regulations related to health coverage and deliverability are implemented.

Since March 23, it has been clear that health-care reform has moved beyond being a public policy or political issue – it is now a business issue. To demonstrate this, gone are the dog days of August 2009 when members of Congress heard loud and clear where public opinion stood on health-care reform. Instead, as of today, businesses are obligated to implement certain provisions that are seen as the building blocks to reach the 2014 goal of covering 32 million individuals who are currently uninsured.

As of now, employers are required to ensure a plan’s “Grandfathered” status, cover dependent children through age 26, require insurance companies justify rate increases and prohibit the exclusion of coverage for children with preexisting conditions and most annual and lifetime benefit limits. These provisions are just the tip of the iceberg, and more complex and costly requirements will continue to impact business decisions and strategies.

Specific provisions implemented today that will impact businesses and their employees include:

• Grandfather status to preserve existing conditions: Today is the day that all health insurance plans – including plans “grandfathered” in on March 23, 2010 – will need to achieve a certain set of consumer protections. The grandfather provision allows individuals to keep their insurance coverage if preferred. This is an attempt for the president to keep his “if you like your health plan, you can keep it” promise to Americans.
• Extension of coverage for young adults: Dependent children under the age of 26 are eligible to be covered under their parents’ plan unless they already receive coverage from their own employer.
• Requirements to increase insurance rates: Insurance companies will now be required to publically disclose and justify an increase in monthly premiums.
• Prohibition on most lifetime and annual benefits limits and rescissions: As of today, health plans are no longer able to set lifetime limits on essential benefits and insurance companies will be restricted from setting annual dollar limits on plans. Moreover, insurers cannot rescind coverage except in the cases of fraud.
• Prohibition of denial of coverage for children with preexisting conditions.

What Will Midterm Elections Mean for PPACA Compliance?

Yesterday, House GOP members released their “Pledge to America” which calls for the “repeal and replacement” of PPACA if they are elected to the majority in November. Currently, many pundits are saying that the Republicans will achieve at least the net gain of 40 House seats needed to reclaim control of the chamber. However, the chances to win the majority in the Senate are less likely, and it is considered impossible for the GOP to obtain the veto-proof majority needed to actually repeal the law. Therefore, many observers continue to advise businesses to communicate to employees the impact and adapt to the new requirements.

FEI will continue to monitor new rules and regulations as they are released and will stand ready to comment to rule-makers to ensure that employers are still able to offer affordable and reliable health coverage to their workers.

Prepared Sept. 23, 2010 by Philip Fakhourie (pfakhourie@financialexecutives.org, legislative aide, Government Affairs and Chris Graham (cgraham@financialexecutives.org), manager, Government Affairs, Financial Executives International (FEI). This summary does not represent FEI opinion specifically noted above.