Issue What the Law Will Do Effective Date

Tax on "Cadillac" Plans

Imposes new taxes on so-called "Cadillac" health insurance policies;2 40 percent tax on health insurance plans worth more than $27,500 for a family plan, $10,200 for an individual plan (family coverage now averages $13,375) 3

Jan. 1, 2020
Individual Mandate Repeal of the Individual Mandate (tax penalty) for individual plans for plans effective in 2019 Plan years beginning
Jan. 1, 2019
Association Health Plans Expansion of Association Health Plans availability  
Short-term, Limited Duration Short-term, Limited Duration rule changed to allow plans to change from 90 days to a 3-year length (under state discretion) Oct. 1, 2018
Essential Health Benchmark States are given the ability to make changes to the EHB benchmark plan in the state  
Issue What the Law Will Do Effective Date
Waiver for State Innovation

A state may apply for waivers of the following requirements:

  • Requirements for Qualified Health Benefits Plans
  • Requirements for Health Insurance Exchanges
  • Requirements for reduced cost-sharing in qualified health benefits plans
  • Requirements for premium subsidies
  • Requirements for the employer mandate
  • Requirements for the individual mandate

The state will receive funds for implementing the waiver equal to any subsidies or tax credits for which residents would otherwise receive if the state had not received a waiver.1

Plan years beginning Jan.1, 2017

  Elimination of Cost-sharing Reductions (CSRS) Plan years beginning Jan. 1, 2018
Issue What the Law Will Do Effective Date
Provisions Relating to the Offering of Plans in More Than One State Two or more states may enter into a “health care choice compact” under which individual market plans could be offered in all compacting states, subject to the laws and regulations of the state where it was written or issued. Plans must be licensed in each state in which they sell coverage or must submit to the jurisdiction of the states with regard to the above laws.1 Jan. 1, 2016
Market Reforms - Small Group Size States must expand the small group market to include employers with 51-100 employees Jan. 1, 2016
Issue What the Law Will Do Effective Date
Health Benefit Exchange

The Secretary of the U.S. Department of Health & Human Services (HHS) must determine by Jan. 1, 2013 whether states intend to operate qualified exchanges.
If a state does not create a qualified exchange, the Secretary must create one. There must be two exchanges - a non-group market exchange and an exchange for small businesses. States may choose to operate only one exchange serving both groups.

Some functions to be performed by an exchange include:

  • Certify qualified plans to be sold on the exchange
  • Maintain a website
  • Provide for initial, annual and special open enrollment periods
  • Maintain a toll-free number
  • Create a rating system for plans and perform satisfaction survey
  • Provide a calculator to determine enrollee premiums and subsidies
  • Identify those individuals exempt from the individual mandate and notify treasury
  • Require participating plans to provide justification for rate increases1
State exchanges must be operational by Jan. 1, 2014
Free Choice Vouchers Employers must provide a voucher in the amount of the employer’s contribution towards the group health plan to each employee whose household income is below 400 percent federal poverty level if the employees’ cost of coverage under the group health plan is between 8 and 9.8 percent of household income and the employee does not enroll in the employer’s group health plan. Employees may use these vouchers to purchase coverage through the Exchange.1 Jan. 1, 2014
Pre-existing Condition Exclusions A plan may not impose any pre-existing condition exclusions on anyone.1 Jan. 1, 2014
A requirement to Maintain Minimum Essential Coverage

U.S. citizens and legal residents are required to have qualifying health coverage. Those without coverage pay a tax penalty of the greater of $695 per year up to a maximum of three times that amount ($2,085) per family or 2.5 percent of household income. The penalty will be phased-in according to the following schedule: $95 in 2014, $325 in 2015, and $695 in 2016 for the flat fee or 1 percent of taxable income in 2014, 2 percent of taxable income in 2015, and 2.5 percent of taxable income in 2016.

Beginning after 2016, the penalty will be increased annually by a cost-of-living adjustment. Exemptions will be granted for financial hardship, religious objections, American Indians, those without coverage for less than three months, undocumented immigrants, incarcerated individuals, those for whom the lowest cost plan option exceeds eight percent of an individual's income, and those with incomes below the tax filing threshold (in 2009 the threshold for taxpayers under
age 65 was $9,350 for singles and $18,700 for couples).3

Jan. 1, 2014
Guaranteed Issue and Renewability in All Markets The law requires guaranteed issue and renewability and allows rating variation based only on age (limited to a 3:1 ratio), premium rating area, family composition and tobacco use (limited to a 1.5:1 ratio) in the individual and the small group market and the exchanges.3 Plan years beginning Jan. 1, 2014
Employers Must Offer Coverage Imposes a mandate on employers with 50+ workers: offer coverage by 2014 or pay $2,000/full-time worker (excluding the first 30); if offering unaffordable coverage, pay $3,000/employee receiving taxpayer assistance to buy it or a
total of $2,000/employee, whichever is more. Employers of 50 or fewer workers are exempt.2
Jan. 1, 2014
Guaranteed Availability of Coverage Insurers must accept every employer and every individual that applies for coverage except that an insurer may restrict enrollment based upon open or special enrollment periods.1 Plan years beginning Jan. 1, 2014
Prohibiting Discrimination Against Individual Participants and Beneficiaries Based on Health Status A plan may not establish rules for eligibility based on any of the following health status-related factors: health status, medical condition, claims experience, receipt of health care, medical history, genetic information, evidence of insurability (including conditions arising out of domestic violence), disability, any other health status-related factor deemed appropriate by the Secretary.1 Plan years beginning Jan. 1, 2014
Non-discrimination in Health Care Plans may not discriminate against any provider operating within their scope of practice. Does not require that a plan contract with any willing provider or prevent tiered networks.1 Plan years beginning Jan. 1, 2014
Comprehensive Health Insurance Coverage All plans must include the essential benefits package required of plans sold on the Exchanges and must comply with limitations on annual cost-sharing for plans sold on the Exchanges.1 Plan years beginning Jan. 1, 2014
Prohibition on Excessive Waiting Periods Group health plans and group health insurance may not impose waiting periods that exceed 90 days.1 Plan years beginning
Jan. 1, 2014
Coverage for Individuals Participating in Approved Clinical Trials A plan may not deny individual participation in an approved clinical trial for cancer or life-threatening disease or condition, may not deny or limit the coverage of routine patient costs for items and services provided in connection with the trial, and may not discriminate against participants in a clinical trial.1 Plan years beginning Jan. 1, 2014
Rating Reforms Must Apply Uniformly to All Health Insurance Issuers
and Group Health Plans
Any standard or requirement adopted by a state must be applied uniformly to all health plans in each market to which the standards or requirements apply.1 Plan years beginning Jan. 1, 2014
Issue What the Law Will Do Effective Date
Health Benefit Exchange The Secretary of the U.S. Department of Health & Human Services (HHS) must determine by Jan. 1, 2013 whether states intend to operate qualified exchanges. Jan. 1, 2013
Administrative Simplification Requirements The Secretary will develop operating rules for the electronic exchange of health information, transaction standards for electronic funds transfers and requirements for financial and administrative transactions.1 Rules adopted by July 1, 2011, to become effective by Jan. 1, 2013
Employer Requirement to Inform Employees of Coverage Option Employers must provide employees with written notice at the time of hiring informing them of the existence of the Exchange and the availability of subsidies through the Exchange if the plan covers less than 60 percent of the cost of covered benefits.1 March 1, 2013
Issue What the Law Will Do Effective Date
Ensuring Quality of Care

Plans must submit annual reports to the Secretary of the U. S. Department of Health & Human Services (HHS) on whether the benefits under the plan:

  • Improve health outcomes through activities such as quality reporting, case management, care coordination, chronic disease management
  • Implement activities to prevent hospital readmission
  • Implement activities to improve patient safety and reduce medical errors
  • Implement wellness and health promotion activities1
Two years after enactment (March 23, 2012)

Uniform Explanation of Coverage Documents and Standardized Definitions

The Secretary must develop standards for a summary of benefits and coverage explanation to be provided to all potential policyholders and enrollees.1 Standards must be developed by March 2011; implementation by
March 2012
Issue What the Law Will Do Effective Date
Loss Ratio Medical loss ratios of 80 and 85 percent, respectively, are required for individual/small group and large group plans. The loss ratio is the fraction of revenue from a plan's premiums that goes to pay for medical services.2 Jan. 1, 2011
Bringing Down the Cost of Health Care Carriers must report to the Secretary of the U.S. Department of Health & Human Services (HHS) the ratio of incurred losses (incurred claims) plus loss adjustment expense (change in contract reserves) to earned premiums. Insurers must provide a rebate to consumers if the percentage of premiums expended for clinical services and activities that improve health care quality is less than 85 percent in the large group market and 80 percent in the small group and individual markets. All hospitals must establish and make public a list of its standard charges for items and services, including for
diagnosis-related groups.1
Jan. 1, 2011
Long-term Care A voluntary long-term care program will begin, financed through payroll deductions.2 Jan. 1, 2011
Study of Large Group Market The Secretary shall conduct a study of self-insured and fully-insured plans to compare the characteristics of employers, plan benefits, plan reserves and solvency and determine the extent to which the bill's market reforms will
cause adverse selection in the large group market and prompt small and mid-size employers to self insure.1
Due no later than one year after enactment (March 23, 2011)
GAO Study Regarding the Rate of Denial of Coverage and Enrollment by Health Insurance and Group Health Plans The Government Accountability Office (GAO) shall conduct a study of the incidence of denials of coverage for medical services and denials of application to enroll in health insurance plans by group health plans and health insurance issuers.1 One year after enactment (March 23, 2011)
Issue What the Law Will Do Effective Date
Health Insurance Consumer Assistance Offices and Ombudsmen

States may establish and operate offices of health insurance consumer assistance or health insurance ombudsman programs to:

  • Assist with the filing of complaints and appeals
  • Collect, track and quantify problems and inquiries
  • Educate consumers on their rights and responsibilities
  • Assist consumers with enrollment in plans
  • Resolve problems with obtaining subsidies

States may be required to collect and report data of all the types of problems and inquiries encountered by consumers.1

Effective as of the date of enactment (March 23, 2010)
Preservation of Right to Maintain Existing Coverage The following provisions will apply to grandfathered plans:
  • Excessive waiting periods
  • Lifetime limits only
  • Rescissions
  • Extension of dependent coverage
  • Uniform summary of benefits and coverage and standardized definitions
  • Medical loss ratios1
Effective as of the date of enactment (March 23, 2010)
$250 Medicare Part D Rebate A $250 rebate will be available to seniors reaching the Medicare Part D donut hole.1 June 2010
Temporary High-risk Pool Program

The Secretary of the U.S. Department Health & Human Services (HHS) is required to establish a temporary high-risk health insurance pool program to provide coverage to individuals with pre-existing conditions who have been without coverage for at least six months.

Pools must:

  • Have no pre-existing condition exclusions
  • Cover at least 65 percent of total allowed costs
  • Have an out-of-pocket limit no greater than the limit for high deductible health plans ($5,950 for individuals and $11,900 for families)
  • Utilize adjusted community rating with maximum variation for the age of 4:1
  • Have premiums established at a standard rate for a standard population

The state's current high-risk pool, the Comprehensive Health Association of North Dakota (CHAND), does not meet the requirements.1

Effective 90 days after enactment (June 23,
Temporary Reinsurance Program for Early Retirees The Secretary shall establish a temporary reinsurance program to reimburse employment-based plans for 80 percent of costs incurred by early retirees age 55 and over but not eligible for Medicare between $15,000 and $90,000
Effective 90 days after enactment (June 23,
Web Portal to Identify Affordable Coverage
The Secretary shall establish a mechanism, including a website through which individuals and small businesses may identify affordable health insurance coverage.1 July 1, 2010
Annual and Lifetime Limits Plans may not establish lifetime limits on the dollar value of essential benefits. Plans may only establish restricted limits prior to Jan. 1, 2014 on essential benefits.1 Sept. 23, 2010
Pre-existing Condition Exclusions A plan may not impose any pre-existing condition exclusions - effective six months after enactment for under the age of 19.1 Effective Sept. 23, 2010, for individuals 19 and under. Effective Jan. 1, 2014 for all others.
Rescissions Insurers cannot rescind coverage after a sickness. Coverage may be rescinded only for fraud or intentional misrepresentation of material fact.1 Sept. 23, 2010
Coverage of Preventative Health Services

Plans must provide coverage without cost-sharing for:

  • Services recommended by the U.S. Preventive Services Task Force
  • Immunizations recommended by the Advisory Committee on enactment Immunization Practices of the Centers for Disease Control (CDC)
  • Preventive care and screenings for infants, children and adolescents supported by the Health Resources and Services Administration
  • Preventive care and screenings for women supported by the Health Resources and Services Administration

Current recommendations from the U.S. Preventive Services Taskforce for breast cancer screenings will not be considered.1

Sept. 23, 2010
Extension of Adult Dependent Coverage Plans that provide dependent coverage must extend coverage to adult children up to age 26.1 Sept. 23, 2010
Provision of Additional Information

All plans must submit to the Secretary and state insurance commissioners and make available to the public the following information in plain language:

  • Claims payment policies and practices
  • Periodic financial disclosures
  • Data on enrollment
  • Data on unenrollment
  • Data on the number of claims that are denied
  • Data on rating practices
  • Information on cost-sharing and payments with respect to out-of-network coverage1
Sept. 23, 2010
Appeals Process

Internal claims appeal process:

  • Group plans must incorporate the U.S. Department of Labor's claims and appeals procedures and update them to reflect standards established by the Secretary of Labor.
  • Individual plans must incorporate applicable law requirements and update them to reflect standards established by the Secretary.

External review:

  • All plans must comply with applicable state external review processes that, at a minimum, include consumer protections in the National Association of Insurance Commissioners (NAIC) Uniform External Review Model Act (Model 76) with minimum standards established by the Secretary that is similar to the NAIC model.1
Sept. 23, 2010
Patient Protections

A plan that provides for designation of a primary care provider must allow the choice of any participating primary care provider who is available to accept them, including pediatricians.

If a plan provides coverage for emergency services, the plan must do so without prior authorization, regardless of whether the provider is a participating provider.

A plan may not require authorization or referral for a female patient to receive obstetric or gynecological care from a participating provider.1

Sept. 23, 2010
Ensuring that Consumers Get Value for their Dollars

The Secretary, in conjunction with the states, shall develop a process for the annual review of unreasonable premium increases for health insurance coverage. The process shall require insurers to submit to the state and the Secretary a justification for an unreasonable premium increase and post it online.

The Secretary shall award $250 million in grants to states over a five-year period to assist rate review activities, including reviewing rates, providing information and recommendations to the Secretary, and establishing Medical Reimbursement Data Centers to develop database tools that fairly and accurately reflect market rates for medical services. Amounts of grants to states are to be determined by the Secretary.

Effective 2010 plan year
Small Business Tax Credit Available to small businesses offering coverage to employees1 Tax credits of up to 35 percent of the cost of premiums will be available in 2010 and will
reach 50 percent in 2014