Health Care Reform Timeline
Stay informed and up-to-date with this interactive timeline – listing health care reform rules as they take effect and change year-over-year.
2010 - U.S. health care reform begins with several consumer-focused provisions
- Grandfathered plans
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Summary:
The PPACA includes a provision that considers health plans that existed on March 23, 2010, as “grandfathered.” Grandfathered plans are not required to comply with some of the PPACA provisions. Grandfathered plans can make routine changes to plan designs without losing grandfathered status. However, plans will lose their grandfathered status if they make changes that significantly cut benefits, increase out-of-pocket spending for individuals or reduce the employer contribution toward the cost of the plan.
A November 2010 amendment allows employers to keep grandfathered status if:- An insured plan changes insurance policies (to a new carrier) and the new policy was effective on or after November 17, 2010
- A self insured plan changes to an insured plan and the policy was effective on or after November 17, 2010
- Early Retiree Reinsurance Program
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Summary:
The federal program will pay employers for part of the cost of health benefits they pay for retired employees age 55 and over, their spouses, surviving spouses and dependents. The program started June 1, 2010 and ends January 1, 2014 or when its $5 billion budget is used.
The Early Retiree Reinsurance Program refunds employers for up to 80 percent of claims that cost between $15,000 and $90,000. Employers must use the early retiree reinsurance program funds on health care programs that help to control employee costs.
Read our Early Retiree Reinsurance Program FAQ - Online resources
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Summary:
Health insurance companies must post health plan options online for consumers. This provision applies only to fully insured individual policies and small group plans.
- Appeals and external review
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Summary:
Important: Grandfathering applies to this provision differently for individual and group plans. See details below.All non-grandfathered individual and group health plans must have an effective appeals process for coverage determinations and claim decisions for plan years beginning on or after September 23, 2010. The PPACA requires plans and issuers to offer an external review process that meets minimum requirements.
Plans must:
Follow Employee Retirement Income Security Act (ERISA) rules pertaining to claims and appeals.- Consider a rescission (retroactive cancellation) of coverage to be an adverse benefit determination
- Provide to the claimant any new or additional evidence or rationale considered, relied upon or generated in connection with the claim prior to giving a final adverse determination
- Address urgent pre-service initial determinations within 72 hours
- Meet additional adverse determination notice requirements, including:
- Providing information sufficient to identify the claim
- Providing a description of the available internal appeals and external review processes
- Disclosing information about any applicable office of health insurance consumer assistance or ombudsman
There is a foreign language requirement for notices under certain circumstances.
Grandfathered group plans are exempt from this requirement.
Read our news alert to learn about reform’s claims and appeals process - Cancellation of coverage (rescissions)
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Summary:
Insurers and plans cannot retroactively cancel coverage except in cases of fraud or intentional misrepresentation. If coverage is cancelled, the PPACA requires 30 days advance notice to all enrollees.
Note: Cigna voluntarily complied with this provision on May 1, 2010. - Dependent coverage to age 26
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Summary:
The PPACA requires dependents under age 26 be covered regardless of marital, student, residency or financial status. The Department of Health and Human Services requires plans to cover those:
- Currently enrolled on the plan
- Previously terminated from the plan
- Never enrolled on the plan
Spouses and children of dependents are not eligible unless the plan already covers these individuals.
Until 2014, grandfathered plans are not required to cover dependents that have access to another employer-sponsored plan.
Additional notes:- Funds from Health Reimbursement Accounts (HRAs) and Flexible Spending Accounts (FSAs) may be used for dependents up to age 26.
- Plans may also offer retroactive FSA reimbursement for expenses incurred by a dependent up to age 26 – as far back as March 30, 2010. The IRS Ruling (2010-38) allows for this exception as long as you amended your cafeteria plan documents by December 31, 2010.*
- Health Savings Account (HSA) funds may not be used to pay the expenses of covered dependents who are not claimed as dependents for tax purposes.
*Under certain circumstances, extending FSA coverage to dependents up to age 26 may be optional. Please speak to your own legal counsel to determine if your FSA plan is required to provide this extension of coverage.
- Doctor choice
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Summary:
Enrollees must be allowed to select the primary care physician (PCP), including a pediatrician, of their choice. Enrollees must be able to visit an OB/GYN without a referral from the PCP. This rule does not apply to grandfathered plans.
- Dollar limits on essential health benefits
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Summary:
Important: Grandfathering applies to annual dollar limits differently for individual and group plans. See details below.
- Plans are restricted from having lifetime limits on coverage defined as Essential Health Benefits. Health care reform allows an annual limit on Essential Health Benefits until January 1, 2014. Final government definitions of essential benefits remain outstanding. However, plans and insurers are expected to make a good faith effort to comply with the lifetime and annual guidance provided so far.
The following minimum annual limits are allowed for plan years beginning on or after these dates:
- September 23, 2010: not less than $750,000
- September 23, 2011: not less than $1.25 million
- September 23, 2012: not less than $2 million
- 2014: No annual dollar limits allowed
Plans and insurers must offer a one-time, 30-day special enrollment period to any individual whose coverage previously ended due to reaching the lifetime dollar limit. This applies if that individual would otherwise still be eligible for coverage.
The PPACA provides an annual limits waiver program for limited benefit plans, which are typically for part-time or seasonal employees, that were in effect prior to September 23, 2010. The waivers are generally granted if compliance would significantly increase premiums or decrease access to coverage for current enrollees.
In June 2011, the Department of Health and Human Services extended the waiver program through 2014. To obtain a waiver, an extension request must have been received by September 22, 2011. Annual limit updates must then be sent by December 31, 2012 and December 31, 2013 to extend the waiver through 2014.
The PPACA has disclosure requirements for plans that receive waivers. They must clearly communicate limits of the coverage so plan participants understand them.
When state insurance exchanges open and other coverage options become available, waivers and annual limits will no longer be allowed.
For individual plans, annual dollar limits do not apply to grandfathered plans.Read our extending annual limits waiver alert
- Emergency care
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Summary:
The PPACA requires insurers to cover all emergency services* as in-network benefits even if the emergency services are received out-of-network. Also, the PPACA does not allow insurers to require prior authorization for out-of-network emergency care.
Doctors and hospitals may balance bill participants once their benefit plan or insurer pays an amount equal to the greatest of the:- Amount negotiated with in-network providers (median cost, if more than one amount is negotiated)
- Amount of the in-network, cost-sharing (without reduction for out-of-network cost-sharing, i.e. the Usual and Customary Rate or “UCR”)
- Sum generally paid by Medicare
These requirements do not apply to grandfathered plans.
*Plans must adopt a standard the “prudent layperson” definition for emergency services. - Prohibition in favor of highly compensated individuals
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Summary:
Health care reform does not allow plans to discriminate by giving highly compensated employees better benefits. Employers may be fined $100 per day multiplied by the number of employees denied participation in the plan. The Department of Treasury has delayed enforcement of this rule until the Department of Health and Human Services issues additional rules.
Distinction based on a job factor, such as hours, salary or location may be acceptable.
Grandfathered plans do not have to follow this rule. A similar rule already exists for self-funded plans. - No pre-existing condition limitations for enrollees under 19
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Summary:
Important: Grandfathering applies to this provision differently for individual and group plans. See details below.
Plans cannot deny benefits and coverage for people age 19 or under, whether they are an employee, spouse or dependent, because they have a pre-existing condition.
Beginning January 1, 2014 no one can be denied coverage based on pre-existing conditions.
Grandfathered individual plans are exempt from this requirement. - Preventive services/immunizations without cost share
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Summary:
Plans must cover preventive care services and immunizations with no cost-sharing, such as deductibles, coinsurance, copayments or any other payment. However, cost sharing does not include premiums, balance billing amounts for out-of-network services or costs for non-covered services.
Grandfathered plans do not have to follow this rule.
The PPACA does not require preventive care to be covered for services received out-of-network. If a grandfathered or non-grandfathered plan includes out-of-network coverage, then cost-sharing, such as deductibles and coinsurance, are allowed. The preventive care services are covered in full under the in-network coverage.
Dollar limits on out-of-network preventive services and immunizations are not allowed.
Preventive care services and immunizations include:- Recommended evidence-based preventive services from the United States Preventive Services Task Force with a rating of A or B.
- Immunizations recommended by the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention.
- Preventive care guidelines developed by the Health Resources and Services Administration and the American Academy of Pediatrics.
- On August 1, 2011, HHS adopted additional Guidelines for Women’s Preventive Services – including well-woman visits, support for breastfeeding equipment, contraception and domestic violence screening – that will be covered without cost sharing in new health plans starting in August 2012. The guidelines were recommended by the independent Institute of Medicine (IOM) and based on scientific evidence.
- These additional guidelines apply to new non-grandfathered plans (new or renewing) beginning with the first plan year on and after August 1, 2011.
- Please visit hrsa.gov/womensguidelines to read the Guidelines for Women’s Preventive Services.
Visit hhs.gov to read a list of covered preventive services.
- Temporary high risk pools
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Summary:
Temporary high-risk pools give health insurance to people with pre-existing conditions who have not had insurance for at least six months. These pools will be available until state exchanges begin operating and selling insurance in 2014.
If insurers and employers encourage individuals to leave their current plan to join a high-risk pool they will be held responsible for the health care expenses paid by the high-risk pool. - No unreasonable premium increases
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Summary:
Every year the federal government will review plan premium increases. Health and Human Services is establishing a process to review unreasonable increases. This provision applies only to fully insured individual policies and small group plans.
2011 - After a year of new reform regulations, focus shifted to preparation for the future.
- Health savings account distribution tax penalty
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Summary:
If a person uses Health Savings Account funds for items not listed as medical expenses under the federal tax code, the Internal Revenue Service may impose a 20 percent tax penalty on the amount.
All plans were required to follow this rule regardless of status as of January 1, 2011.
Read our health savings accounts FAQ
Read our over-the-counter drugs fact sheet to learn moreRead our over-the-counter medicines update to review changes in using health spending accounts - Eliminate the Medicare Part D coverage "Donut Hole"
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Summary:
- Under the ACA, the Part D coverage gap gradually closes between 2011 and 2020. The Bipartisan Budget Act of 2018 accelerates the timeline by one year and requires the gap to be closed by 2019.
- In 2010, enrollees received a $250 rebate from the government if they entered the Part D coverage gap.
- Starting in 2011, there was progressively lower beneficiary coinsurance for generic drugs and coverage for brand name drugs (with discounts from drug companies) in the gap.
- By 2019, the donut hole will be reduced to 25 percent coinsurance, instead of 100 percent.
The ACA keeps the federal Medicare Part D 28 percent drug subsidy as is.
Read our Medicare Part D subsidy FAQ - Medical loss ratio
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Summary:
Insurers must provide an annual rebate to policyholders if they do not spend a certain percent of premiums on claims and other medical services. Called the medical loss ratio, this amount is based on a "cell" of business to which the individual or group belongs. A rebate would be issued if the cell's medical loss ratio is less than 85 percent for large groups or 80 percent for small groups or individuals.
This provision applies to fully insured plans, including shared returns. Special calculation rules apply to limited medical plans, making them unlikely to generate rebates. International expatriate plans are excluded from rebates for plan years through December 31, 2015.
Read our medical loss ratio FAQ
Learn about medical loss ratio - Over-the-counter drugs
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Summary:
As of January 1, 2011, purchases of most OTC drugs and medicines were no longer reimbursable from health spending accounts (HRA, HSA and FSA) unless the individual had a doctor’s prescription for the drug.
Certain products, such as contact lens solutions, insulin and diabetic supplies and first aid items can still be purchased with health spending and savings account funds without a prescription.
Health care reform affects flexible spending account debit cards, too. They may no longer be used to purchase over-the-counter drugs or medicines. However, the cost will be reimbursed with a prescription and store receipt. If a pharmacy processes the over-the-counter drug as a prescription (as defined by Internal Revenue Service notice 2011-05), then the flexible spending account debit card may allow the charge to go through.
For Health Savings Accounts, copies of prescriptions and receipts must be kept in the event of a federal income tax audit.
Read about over-the-counter changes in our FAQsView our fact sheet to learn about rules for over-the-counter drugsRead our over-the-counter medicines update to review changes in using health spending accounts
2012 - The PPACA will create administrative standards in United States health care.
- Encouraging integrated health systems
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Summary:
The PPACA improves quality of care by creating incentives for doctors to form accountable care organizations (ACOs). These organizations allow doctors and other health care professionals to better coordinate patient care. They could help prevent disease and illness and reduce unnecessary hospital admissions or re-admissions.
Incentives will be paid by the Centers for Medicare & Medicaid Services (CMS) for Medicare patients, but many ACOs will also contract for other patients. - Summary of Benefits and Coverage
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Summary:
The Summary of Benefits and Coverage (SBC) provision applies to employees and dependents of domestic group and individual health plans. It applies to all fully insured and self-insured plans, regardless of grandfathered status. It does not apply to Medicare plans or U.S.-issued expatriate plans.
Effective September 23, 2012, health insurers and self-insured group health plans were required to provide a standard Summary of Benefits and Coverage (SBC) document to all individuals enrolling in medical coverage. This includes mid-year enrollment for new employees and those experiencing a special enrollment event, and 'upon request' by other enrollees.
The current SBC includes:
- A four-page benefits and coverage summary describing plan benefits, cost sharing and limitations
- Consumer costs examples based on the specific plan’s benefits for two common medical scenarios: maternity and diabetes management
- Customer service phone number and a website to review or obtain a copy of their full policy or certificate
- A glossary of standard medical and insurance terms
- Quality of care reporting
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Summary:
The Department of Health and Human Services is developing rules for how plans report on benefits and how they pay health care providers. The goal is to improve health outcomes through:
- Reporting
- Case management
- Care coordination
- Chronic disease management
- Medication and care initiatives, including the medical homes model for treatment or services
New rules are aimed at reducing hospital readmissions. A comprehensive program for hospital discharge could include:
- Patient education and counseling
- Thorough discharge planning
- Post-discharge follow-up by a health care professional
To improve patient safety and reduce medical errors, health care reform requires use of:
- Best clinical practices
- Evidence-based medicine
- Health information technology
The PPACA also supports widespread wellness and health promotion programs.
Grandfathered plans are not required to participate. - Reducing paperwork and administrative costs
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Summary:
Many changes will make billing practices uniform to improve the quality of care. The PPACA requires health plans to adopt rules for the secure, confidential and electronic sending of health information. Standard documents could reduce paperwork and administrative duties, lower costs and decrease medical errors.
Grandfathered plans are not required to participate. - Comparative Effectiveness Research Fee
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Summary:
Reform creates a Comparative Effectiveness Research Fee (CERF), and revenue from this fee will fund research that determines the effectiveness of various forms of medical services that treat, manage, diagnose or prevent illness or injury.
Effective for plan years that began on and after October 2, 2011, insurers and self-insured group health plans must pay an annual fee that initially begins at $1 per participant, including dependents. The fee increases to $2 per participant in 2013, then to an amount indexed to national health expenditures for future years. CERF continues through September 30, 2019 with the last payment due July 31, 2020 for some plans.
Read our CERF Fact Sheet - Women's Health Amendment
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Summary:
On August 1, 2011, HHS adopted additional Guidelines for Women's Preventive Services – including well-woman visits, support for breastfeeding equipment, contraception and domestic violence screening – that will be covered without cost sharing in new health plans starting in August 2012. The guidelines were recommended by the independent Institute of Medicine (IOM) and based on scientific evidence.
- These additional guidelines apply to new non-grandfathered plans (new or renewing) beginning with the first plan year on and after August 1, 2011.
- Please visit hrsa.gov/womensguidelines to read the Guidelines for Women’s Preventive Services.
See 2010 for the Preventive Services/Immunizations without Cost Share provision synopsis.
- W-2 Reporting
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Summary:
Starting with the 2012 tax year, employers who distribute 250 or more* Form W-2s for the tax year are required to include the value of applicable employer-sponsored coverage on each employee's W-2 Form. This is not considered taxable income and is for information purposes only. Employee premiums may still be made on a pre-tax basis.
IRS Notice released October 12, 2010, made this reporting requirement for the 2011 tax-year voluntary. Employers that choose not to report the aggregate cost of employer-sponsored coverage for the 2012 tax year and beyond will be subject to tax penalties. While the Form W-2 has not changed, the IRS added a code "DD" that employers should put in box 12 to report the value.
See the IRS sample W-2 form* It is important to note that this requirement applies to employers who distribute 250 or more W-2s, not simply to employers with 250 or more employees. A high-turnover employer with 200 employees may send out more than 250 W-2s.
2013 - Final preparations heading into reform's pinnacle in 2014.
- Flexible spending account limits
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Summary:
Individuals can save up to $2,500 per year (the Department of Health and Human Services will adjust the amount to inflation) in their flexible spending accounts.
Read our flexible spending account contribution cap FAQs
Read our flexible spending account FAQRead our fact sheet to view changes in using health spending accounts - Expanded authority to bundle payments
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Summary:
Establishes a national pilot program to encourage hospitals, doctors and other health care professionals to work together to improve the coordination and quality of patient care.
- Increased Medicare Part A tax on wages and investment income
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Summary:
Starting January 1, 2013, there will be additional Medicare taxes for high-income earners. Employees earning up to $200,000 will continue to pay the same 1.45% Medicare tax. Employees earning more will be taxed an additional .9% on all earnings over the $200,000. Employers are liable for this added tax if they do not begin withholding the additional .9% once earnings reach $200,000.
For married couples filing jointly, the tax is assessed on a total household income of $250,000. In this case, a single employee's income may be below $200,000, so the employee is liable for the additional Medicare tax.
There is also an additional 3.8% Medicare tax on investment income (interest, dividends, and capital gains). The amount of investment income to be taxed is determined by the lesser of:
* The Modified Adjusted Gross Income above the threshold of
* $200,000 for an individual
* $250,000 for married or joint income* Total investment earnings
Individuals who believe they may be assessed this new tax should consult their tax advisor or Certified Public Accountant (CPA) for guidance.
2014 - The year several key health reform provisions take effect
- Health Insurance Marketplaces/Exchanges
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Summary:
On January 1, 2014, states are required to establish health care exchanges where individuals and small employers can evaluate and purchase health insurance. In 2017, states may allow large employers (more than 100 employees) to purchase insurance through exchanges.
Health care reform establishes exchanges to offer affordable health insurance and makes it easy for people to purchase.
A state may defer to the federal government to establish an exchange for its citizens. Or, a state may develop an exchange in partnership with the federal government and take advantage of processes and systems being developed for the federal exchange.
There are many details for the states and the Department of Health and Human Services to work on before 2014.
Read our exchanges FAQ - Individual mandate
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Summary:
The ACA requires all U.S. citizens and legal residents to have minimum essential coverage. This requirement is effective Jan. 1, 2014 through Dec. 31, 2018. People who do not have coverage will be subject to IRS taxes for every month they do not have coverage. The penalties will be zeroed out in 2019. There are a few exceptions to the penalty.
Read our individual mandate FAQ
Read rule for U.S. territories in our FAQs
More information about the Individual Mandate - Essential health benefits
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Summary:
Health care reform requires fully insured small group and individual health plans to cover essential health benefits with no annual dollar limits or lifetime maximums starting in 2014.
The U.S. Department of Health and Human Services is working on the definition of essential health benefits, but the law will require plans cover:- 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 habilitative services and devices
- Laboratory services
- Preventive and wellness services and chronic disease management
- Pediatric services, including oral and vision care
Plans that stay grandfathered are not required to follow this rule. Large group plans will be affected if they offer any essential health benefits.
Read our annual limits FAQ
Learn if your plan qualifies for a waiver with our FAQ
Read our Essential Health Benefits fact sheet
Understand grandfathered status - No pre-existing conditions for all ages
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Summary:
Important: Grandfathering applies to this provision differently for individual and group plans. See details below.
Beginning January 1, 2014 all individual and group health insurance plans are not allowed to deny coverage to enrollees based on a pre-existing condition. The ban includes benefit limitations and coverage denials.
Grandfathered plans for individuals are exempt from this rule.
Read our Grandfathered Plan Fact Sheet - Clinical trials
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Summary:
With health care reform, plans can’t deny people from participating in clinical trials. They can’t limit coverage of routine patient costs for items and services in connection with the trial. The PPACA says that they must not discriminate against a policyholder because of a clinical trial.
Approved clinical trials are phase I, II, III or IV clinical trials that are for prevention, detection or treatment of cancer or another life-threatening disease.
Grandfathered plans do not have to follow this rule. However, Cigna plans to adopt expanded coverage for clinical trials as standard policy for all insured and self-insured plans.
Read our Clinical Trials Fact Sheet - Dollar limits on essential health benefits: annual
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Summary:
Annual limits on the dollar value of essential health benefits ends in 2014.
Grandfathered plans for individuals are exempt from this rule.
Learn about annual limits in our FAQ
Read our waiver process FAQ
Read our fact sheet for more information on Taft-Hartley and Federal plans - Cost-Sharing Limits
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Summary:
In-network out-of-pocket (OOP) maximums cannot exceed $6,350 individual/$12,700 family in 2014. These limits will be adjusted annually.
In-network copays, deductibles and coinsurance must count toward the OOP maximum. Mental health/substance abuse must be included, even if provided by a different carrier. Additional benefits such as prescription drugs carved out to other vendors/carriers do not have to be coordinated until 2015.
Grandfathered plans are exempt.
- Wellness Program Incentives
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Summary:
The maximum wellness program reward is 30% of the total cost of medical coverage, including both employer and employee contributions.
The maximum reward may be increased to 50% for programs related to tobacco use.
Rewards can be provided through premium discounts or surcharges, reduced costs or enhanced benefits.
Read our news alert on Wellness Programs
Read our news alert on 2015 Wellness Program Proposed Regulations
- Guaranteed availability/renewability
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Summary:
Each carrier offering fully insured health insurance coverage in the individual or group market must accept every individual and group in the state that applies for coverage.
The carrier must renew or continue coverage at the plan sponsor or individual’s choice. Grandfathered plans are exempt. - Waiting periods
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Summary:
With reform, group health plans and group health insurance carriers can’t require an insurance coverage waiting period of more than 90 days.
Read more about the Final Rule on Waiting Periods
- Auto enrollment
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Summary:
Automatic enrollment was repealed on November 2, 2015.
This provision would have required automatic enrollment and re-enrollment activities for employers with more than 200 employees.
- Health insurance industry fee
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Summary:
This fee on health insurers, including HMOs, is based on each insurer’s share among all health insurers of U.S. health risks. It starts at $8 billion in 2014 and increases year over year before reaching $14.3 billion in 2018.
In December 2015, the Health Insurance Industry Fee was suspended for 2017. It was reinstated for 2018, but suspended again for 2019 as a result of changes made in a January 2018 short-term federal spending bill.
Read our Health Insurance Industry Fee fact sheet - Reinsurance fee
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Summary:
This ACA fee was intended to help fund implementation of the Patient Protection and Affordable Care Act (PPACA).
This fee on health plans totals $25 billion, which was collected over the three-year period from 2014 through 2016, with the final payments made in 2017. The money was used to fund a reinsurance program, which was intended to lessen the impact of adverse selection in the individual market.
The fee applied to both insured and self-funded commercial major medical plans effective January 1, 2014.
2015 - A year of provisions delayed or having transitional relief
- Employer mandate
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Summary:
Employers must offer health insurance that is affordable and provides minimum value to their full-time employees and their children up to age 26 or be subject to penalties. The employer mandate applies to employers with 50 or more full-time employees. It will be phased in during 2015 and 2016 based on employer size.
Employers with more than 100 full-time employees (or the mathematical equivalent)* must offer health insurance benefits to 70% of full-time employees and their children up to age 26 in 2015. In 2016, the employer mandate expands to include employers with 50 to 99 full-time employees and coverage must be offered to 95% of full-time employees and their children.
- Large Employer Reporting Responsibilities
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Summary:
Effective for coverage offered in 2015, employers with 50 or more full-time employees and/or full-time equivalents must provide the IRS and their employees information for the prior calendar year about the employer’s compliance with the employer mandate, including:
- whether the employer offered its full-time employees and their dependents the opportunity to enroll in "minimum essential coverage,” and
- each full-time employee’s share of the cost for the lowest plan offering minimum value
Coverage offered in the 2015 calendar year will be reported in 2016. Filing deadlines have been extended for 2015 reporting only. Forms must be sent to employees by 3/31/2016, and forms must be sent to the IRS by 5/31/2016 if sent by mail, or 6/30/2016 if sent electronically.
- Minimum Essential Coverage Reporting
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Summary:
For coverage in the 2015 calendar year, insurers and employers of self-funded group health plans must provide the IRS and all covered individuals information indicating whether the covered individuals had minimum essential coverage each month as required by the individual mandate. This reporting requirement applies to all size employer plans. Coverage during the 2015 calendar year will be reported in 2016. Filing deadlines have been extended for 2015 reporting only. Forms must be sent to employees by 3/31/2016, and forms must be sent to the IRS by 5/31/2016 if sent by mail, or 6/30/2016 if sent electronically.
2016 - Changes to rules with specific impacts on employer-sponsored coverage
- Employer mandate
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Summary:
The employer mandate continues to be phased in and will apply to employers with 50 to 99 full-time employees for the first time in 2016. It will continue to apply to employers with 100 or more full-time employees.
The employer mandate requires employers with 50 or more full-time employees (or the mathematical equivalent)* to offer health insurance benefits to 95% of full-time employees and their children up to age 26 in 2016.
Employers will pay a penalty if they do not offer the required coverage and one or more employees receive a premium tax credit for coverage purchased through the Marketplace.
See the 2015 employer mandate timeline information for more details.
*Having a number of part-time employees can add up to more than 50 full-time employees. - Small employer definition change
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Summary:
The national small group definition was scheduled to expand in 2016 from 1-50 to 1-100 total employees (any person that receives a W-2). However, this rule was repealed early October, 2015, leaving the definition of small group as 1-50 total employees, unless a state defines differently. Non-grandfathered, insured, small group health plans must comply with community rating standards and Essential Health Benefits (EHB) rules.
States currently expanding their small group definition to 1-100 total employees: CA, CO, NY and VT.
Expanding the small group definition beyond 50 total employees could present a significant change for insured groups with 51 or more full-time/full-time equivalent (FTE) employees, as these employers are considered "large employers” for most ACA rules.
Non-grandfathered insured employer groups that fit a state-defined small group size greater than 50 total employees, and whose workforce is comprised of 51 or more full-time/FTE employees will need to comply with both the small group market rules and the employer mandate. Such insured group health plans must comply with minimum value and affordability rules to avoid employer penalties despite higher premiums resulting from the small group rules. Consequently, these impacted employers may consider self-insuring their plans.
As an example, if a state expands its small group definition to 1-100 employees, an employer would be subject to both sets of rules if it had 95 total employees, comprised of 65 full-time employees.
U.S.-issued expatriate plans can continue to define a “small employer” as having 1-50 employees in 2016 and beyond.
Fully insured groups in states that expand the definition may have to comply with both requirements
* The small group size is set by every state and is determined by number of actual employees (any person that receives a W-2). The definition of an “applicable large employer” for purposes of the employer mandate is set by federal law and is any employer with 50 or more full-time and full-time equivalent employees.
- New individual out-of-pocket rules
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Summary:
Family plans that have a family out-of-pocket (OOP) limit higher than the PPACA individual OOP maximum must apply an individual OOP limit for each person enrolled in family coverage. This is referred to as an "embedded" individual OOP maximum, and means:
- Once a person covered under a family plan reaches the individual OOP limit, all covered expenses for that person must be reimbursed at 100%, even when the family OOP limit has not been met;
OR - Once the family OOP limit is reached, the plan must pay 100% of all covered expenses for every person under the family coverage no matter how much each person has accumulated in OOP expenses.
See how these rules may impact customers
- Once a person covered under a family plan reaches the individual OOP limit, all covered expenses for that person must be reimbursed at 100%, even when the family OOP limit has not been met;
2017 - Ongoing federal requirements on health plans
- Employer-sponsored wellness program notice
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Summary:
In compliance with final Americans with Disabilities Act (ADA) regulations on wellness programs, published in May 2016, employers must distribute notices to all wellness program participants describing the handling of medical information, and procedures for safeguarding information privacy. The Equal Employment Opportunity Commission published an ADA Sample Notice and FAQs to assist employers with compliance.
Read the Wellness Programs and Incentives page
- Nondiscrimination (Section 1557 of ACA)
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Summary:
In May 2016, the U.S. Department of Health and Human Services (HHS) published a final rule on Section 1557 of the Affordable Care Act (ACA) that prohibits discrimination on the basis of race, color, national origin, sex, age, or disability in certain health programs or activities. It also requires enhanced language assistance for individuals with limited English proficiency. This new rule was established to promote the ACA goals of expanding access to health care and coverage, eliminating barriers, and reducing health disparities.
The broad application of this final rule will affect the federal and state Marketplaces, all health care providers and health insurance issuers and employers that receive federal financial assistance. Financial assistance from HHS includes Medicare Part A, student health plans, advanced premium tax credits and many other federal programs. The final rule is broad in scope, but specifically prohibits categorical exclusions and limitations on health care services related to gender reassignment, including gender reassignment surgery, for impacted health plans in the United States. Any entity that is subject to the nondiscrimination requirements must also ensure that its own employer-sponsored plans are compliant. All insured health plans covered by health insurance carriers are impacted.
This rule was effective as of July 18, 2016; however, the majority of changes in benefits design are required on the first day of the plan or policy year beginning on or after January 1, 2017.
Read our Final Rule on Nondiscrimination in Health Programs and Activities news alert
- Summary of Benefits and Coverage: revised documents
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Summary:
New regulations are in effect for all SBC documents created on or after April 1, 2017. The general format of the new SBC template is similar to the current version. Some changes include:
- Streamlined content, e.g., removal of Q&A about Coverage Examples, which reduced the template to 5 pages (SBC limit remains 8 pages/4 double-sided pages)
- An additional cost example for a foot fracture treated in an emergency room
- Updated claims/pricing data for the coverage example calculator
- New minimum essential coverage and minimum value language, as well as new continuation and appeals/grievance rights language
- Revised language for some sections of the template
- An updated Uniform Glossary
Read the Summary of Benefits and Coverage fact sheet
- State Innovation Waivers (Section 1332)
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Summary:
Under Section 1332 of the ACA, states can waive key provisions of the law in order to implement innovative, alternate health coverage rules or programs while retaining basic consumer protections. Beginning in 2017, states can apply for the 5-year waivers through the Department of Health and Human Services (HHS). In the application, states can request to waive or modify any or all of the following ACA provisions:
- Essential Health Benefits (EHBs) and cost sharing requirements
- Metal tiers of coverage
- Premium tax credits and cost-sharing reductions
- Marketplaces
- Individual and/or employer mandates
To receive consideration and approval for a waiver, a state must demonstrate that its innovation plan will not increase the federal deficit over ten years and will provide coverage that is at least as comprehensive; coverage that is at least as affordable; and coverage to at least a comparable number of residents.
Through this process, states can request a subsidy “pass through” to assist with funding the plan. The “pass through” provides the state with funds equal to the total premium tax credit and cost-sharing subsidies that residents would otherwise have received from the ACA regulated Marketplace.
Read the State Innovation Waivers fact sheet - Marketplace expansion option
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Summary:
With approval from Health and Human Services (HHS), states will have an option to open their public marketplace to any size employer. However, no state has taken action to expand beyond their small group offering for 2017.
See the Health Insurance Exchanges/Marketplaces page for the most recent updates on public exchanges.
2018 – No provisions scheduled to take effect.
2019 – Modifications to the Affordable Care Act begin with effective repeal of the Individual Mandate
- Individual Mandate
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Summary:
The ACA required all U.S. citizens and legal residents to have minimum essential coverage from 2014 through 2018 or pay a penalty. Beginning Jan. 1, 2019, the penalties are zeroed out. This modification to the ACA was included in the 2018 Tax Cuts and Jobs Act.
Read our individual mandate FAQ
More information about the Individual Mandate - Medicare Part D
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Summary:
Health care reform phases out the coverage gap known as the “Donut Hole” in the Medicare Part D prescription drug benefit. Seniors pay a standard 25 percent of drug costs until they reach the threshold for Medicare catastrophic coverage.
The Bipartisan Budget Act of 2018 accelerated the closure of this coverage gap from 2020 to 2019.
Read our Medicare Part D coverage gap FAQ
2022 - Cadillac Tax, the final provision of original ACA, takes effect
- Cadillac excise tax
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Summary:
Health care reform law directs the Internal Revenue Service (IRS) to impose a 40 percent tax on employers that provide high-cost benefits under an employer sponsored group health plan.
In December 2015, the effective date was moved from 2018 to 2020 and the tax was changed to be tax deductible for employers who pay it. In January 2018, the effective date was delayed another two years to 2022.
Read our Cadillac Tax Fact Sheet
