Health Care Reform: Phase I


Employers, as we’re sure you’ve heard by now, there are many changes that take effect this year under federal and state health care reform. Since the legislation exceeds 2,000 pages, we’ve summarized key points for you.

First, all health insurance plans must provide certain benefits starting on or after September 23, 2010:

  • No lifetime limits on coverage.
  • No canceling coverage when a covered person gets sick.
  • Parent's coverage must be extended to any child under age 26 who is without other coverage. Coverage will be tax-free to the employee. Employers with cafeteria plans may permit employees to make pre-tax contributions for this benefit. As of July 1st, Ohio Law requires insured, HIC/HMO and MEVA plans to extend coverage to children up to age 28, if they are unmarried Ohio residents, and not otherwise eligible for coverage from the child's employer. The child does not have to live with the parent, under either federal or state healthcare reform.
  • New health plans must cover preventive screenings, folic acid supplements and smoking cessation counseling for pregnant women at no additional cost to the patient.

Second, no health plan may make significant benefit reductions or cost increases. Copayment increases may not exceed $5, and employers may not decrease the percentage of premiums they pay by more than 5%.

In addition, a new "Small Business Health Care Tax Credit" will help small businesses and tax-exempt organizations afford the cost of covering low and moderate income employees, if the employer pays at least half the cost of single coverage.

Changes that will affect individuals include:

  • Medicare Part D recipients who are stuck in the “donut hole,” where they do not receive coverage for some of their drug costs, will receive a $250 check, starting in July, to help with non-covered drug costs.
  • After 2010, Medicare will no longer require individuals to pay coinsurance or deductibles for certain preventative services, such as mammograms, prostate screening, diabetes self-management training, glaucoma screening and cardiovascular blood tests.

Watch for future articles. If you have immediate questions about these changes, please contact your Stark & Knoll attorney, at 330-376-3300.