It’s Not Obamacare, It’s PPACA

Health reform has an official name: the Patient Protection and Affordable Care Act. Like any hefty government regulation it is filled with new jargon and will be given its own moniker. I bet we’ll shorten it to the PPACA and call it pea-paca (rhymes with alpaca) before this year ends.

Are you confused by PPACA?

Don’t feel badly if you are confused by health reform; most people are. While communication about the legislation is plentiful, and there are some similarities, different reporting sources have given weight to some portions and not mentioned others, increasing potential questions. There’s no need to panic or make drastic changes in employee health benefits or even think you have to find a plan this year. And things may change due not only to challenges to legislation but also to definitions in the legislation that are left up to government agencies to disseminate.

How does it affect employers right now?

If you do not currently offer health coverage to your employees, the new law does not have any effect on you this year. Since PPACA contains consequences for not offering employee health benefits in a few years, it’s a good time to begin investigating your current options. Don’t wait until 2013 to find a broker or see what your employer association or chamber of commerce has to offer. As an incentive to small business to make coverage available, PPACA includes a tax credit up to 35 percent of the money spent on premiums with the potential for a 50 percent credit in the coming years.The largest credit goes to employers with up to 10 employees with a partial credit for those who employ 25. An accountant should be able to use eligible wage information to crunch the numbers to determine your potential savings.

When is the next PPACA deadline?

The next group of provisions that affect employers who offer small group health coverage comes six months after PPACA was signed on March 23, 2010.

Here’s a list:

  • Plans cannot deny coverage to children due to preexisting conditions.
  • Children must be allowed to stay on their parents’ plan until age 26.
  • New health plans must provide preventive care for free, without any co-payments or deductibles. The preventive care coverage requirement is extended to existing plans at the time of renewal after this date.
  • All new plans must allow employees to pick their own primary care doctor and cannot require that a woman receive permission before seeing an ob/gyn. 
  • Plans are prohibited from placing a lifetime maximum on the dollar value of coverage.

The next set of requirements goes into effect on January 1, 2011. It’s not too early to begin planning for these, but to give you time to digest this first set I will be back later in the week.

What questions do you have about the effect of Health Reform?