Ins. Briefs (2014-18)

January 1, 2014 (Back to HRN 2014-18 Ins Chart)


Individual Requirements: Most individuals must maintain insurance coverage for themselves and their dependents or pay a new penalty (Sec. 1501).  

o Coverage may be: Part A of Medicare, Medicaid, SCHIP, the TRICARE for Life program, the veterans’ health care program, the Peace Corps program, an eligible employer-sponsored plan, plans in the individual market, a grandfathered health plan, and any other health benefits coverage, such as a State health-benefits risk pool, as recognized by the Secretary. (Sec. 1501 and Sec. 1312) 


o Penalties: Individuals who fail to comply with the health insurance coverage mandate must pay a penalty for themselves and their dependents for each month they are in non-compliance. The penalty is the greater of either (1) a percentage of applicable income or (2) a flat dollar amount. Applicable income is the amount household income exceeds its personal exemption for a tax year. The penalty amount based on household income is one percent in 2014, two percent in 2015, and 2.5 percent in 2016 and later years. The annual flat-dollar penalty is phased-in ($95 in 2014, $325 in 2015, $695 in 2016, and adjusted for inflation thereafter), and the penalty is assessed for each taxpayer and any dependents.


The flat-dollar penalty is reduced by 50 percent for dependents under the age of 18. Regardless of family size, a family’s penalty is capped at 300 percent the flat-dollar amount, and the penalty for noncompliance cannot exceed the national average premium for bronze-level qualified health plans offered through an Exchange (for the relevant family size). (Sec. 1501)  
Employer Requirements

o Most employers with 50 or more full-time equivalent employees, with at least one full-time employee (30 hours/week) who purchases insurance subsidized with a tax credit through the Exchange, would have to pay a monetary penalty. The penalty is calculated according to a formula based on whether or not the employer offers health coverage.  

􀂃 If the employer does not offer qualified health insurance coverage and at least one employee receives a tax credit for the purchase of insurance through an Exchange, then the annual penalty is: $2,000 times the number of full-time employees minus 30 employees (e.g., a firm with 100 full-time employees would have to pay the $2,000 annual penalty on 70 employees; (100 – 30) x $2,000 = $140,000 total annual penalty). 

􀂃 If the employer offers qualified health insurance coverage but at least one employee declines the insurance coverage, and uses a tax credit premium subsidy to buy health insurance through an Exchange, then the annual penalty is the lesser of (a) the penalty outlined above, or (b) $3,000 times the number of full-time employees who received a tax-credit to buy insurance through the Exchange.

(Sec. 1513 as amended by H.R. 4872 Sec. 1003) 

o Employers with more than 50 full-time equivalent employees must report to the Secretary information on their employees who accept and do not accept insurance. (Sec. 1514) 

o Employers with more than 200 full-time employees who offer health benefits must automatically enroll new employees into an offered plan, unless the employee opts out of enrollment. (Sec. 1511)  


State Requirements

o States (or HHS on their behalf) must have established at least one insurance “American Health Benefits Exchange,” which would sell health insurance to individuals and small employers (those with one to 100 employees, or, at the state’s election, one to 50 employees until 2016; and, at the State’s election after 2017, to employers with more than 101 employees). (Sec. 1311)  

􀂃 States may (1) set up Exchanges that either merge the small business and individual markets or that serve them separately; (2) join across State lines to form regional exchanges; or (3) defer to HHS to set up an Exchange. (Sec. 1311)  

􀂃 Exchanges could provide for the sale of private insurance that meets federally defined requirements (outlined below), nonprofit, member-owned “CO-OP Insurance,” and new federally contracted health plans overseen by the Office of Personnel Management.

(Sec. 1311, Sec. 1301, and 1334)  

􀂃 New plans sold in the Exchange would participate in temporary risk corridors established by the Secretary of HHS (between 2014-2016). (Sec. 1342)

􀂃 Exchanges will make available a new tax credit created under the bill to subsidize health insurance for Americans with incomes up to 400 percent of the Federal Poverty Level (Sec. 1401)

o States must put in place reinsurance programs to provide re-insurance to health plans in the individual market that experience especially high claims. Health insurance companies must pay toward the program contributions, which will be determined by the Secretary.

(Sec 1341)   

All plans except grandfathered plans must:

o Accept all applicants for coverage. (Sec. 1201)

o Comply with new Federal rating rules that allow policy prices for individual and small group plans to vary only according to an applicant’s age (on a 3-to-1 ratio), family structure, geographic location and tobacco use (on a 1.5-to-1 ratio). (Sec. 1201)

o Comply with annual cost-sharing limits. (Sec. 1201)   

All plans sold in the Exchanges must:

o Cover a specific “essential health benefits package” (e.g., emergency services, mental health, prescription drugs) as defined in law and by the Secretary. (Sec. 1201)

o Offer at least one “silver” and “gold” plan (covering 70 percent and 80 percent of enrollees’ projected expenses based on a standard population, respectively). Companies that sell these two plans may also offer for sale a bronze plan (covering 60 percent of enrollees’ projected health care costs) and a platinum plan (90 percent). These plans must be sold at the same price regardless of whether the plan is sold in or outside the Exchange.

(Sec. 1301 and 1302)  
o Provide standardized information about a plan’s payment policies and practices, enrollment, disenrollment, number of claims denied, rating practices, cost-sharing requirements and amount of cost-sharing (including deductibles, copayments and coinsurance) that the individual would be responsible for paying with respect to a specific item or service by a participating provider. (Sec. 10104)
o Consider all their enrollees to be part of a single risk pool. (Sec. 1312)   

New Federal Plans

o Deadline for the Federal Office of Personnel Management to contract with private insurance companies in order to offer for sale at least two plans through each Exchange in each State. When fully implemented, these plans must be offered for sale in every State in the nation. (Sec. 1334)   

Taxes: Start date of new Federal tax on health insurance companies, which the Joint Committee on Taxation estimates will cost American taxpayers $60 billion over 10 years.


Taxes: Start date of increase in corporate estimated tax by 15.75 percent.

(H.R. 4872 Sec. 1410)   


July 1, 2014 (Back to HRN 2014-18 Ins Chart)


Insurance: Deadline for the Secretary to adopt standard operating rules for health insurance companies to govern health claims or equivalent encounter information, enrollment and disenrollment in a health plan, health plan premium payments, and referral certification and authorization transactions. Insurance companies must comply with these rules starting January 1, 2016. (Sec. 1104)    


January 1, 2015 (Back to HRN 2014-18 Ins Chart)


Insurance: Deadline for State-based Exchanges to be financially self-sustaining and not rely on Federal operating subsidies. (Sec. 1311)    


Insurance: Deadline for qualified health plans to contract only with (1) health care providers who implement health care quality improvement mechanisms as defined by the Secretary through regulation and (2) hospitals (with more than 50 beds) that use a patient safety evaluation system defined by Federal law. (Sec. 1311) 


Insurance MediGap Medicare: Deadline for two types of Medigap plans (“C” and “F”) to implement new costsharing standards, as developed by the Secretary and the National Association of Insurance Commissioners, that require nominal cost sharing to encourage the appropriate use of physician services. Medigap plans provide optional supplemental insurance coverage to Medicare beneficiaries. (Sec. 3210)   

January 1, 2016 (Back to HRN 2014-18 Ins Chart)


Insurance: Start date for States to choose to enter Health Care Choice Compacts to allow health benefits plans to be sold across State lines, subject to approval by HHS. (Sec. 1333)  

Insurance: Deadline for insurance companies to comply with standard operating rules established by the Secretary to govern health claims or equivalent encounter information, enrollment and disenrollment in a health plan, health plan premium payments and referral certification and authorization transactions. (Sec. 1104)


January 1, 2017 (Back to HRN 2014-18 Ins Chart)


Insurance: Start date for States to allow employers with more than 101 employees to purchase insurance through the Exchange. (Sec. 1312)   

Insurance: Start date for States to be able to apply to HHS for a waiver of the requirements in the bill that States set up an Exchange, that most individuals purchase insurance or pay a new fine, that certain employers provide insurance or pay a new fine if their employee uses a tax credit subsidy to purchase insurance through the Exchange, and that certain individuals receive a refundable tax credit to subsidize insurance. (Sec. 1332)


January 1, 2018 (Back to HRN 2014-18 Ins Chart)


• Insurance Taxes: Start date for new Federal tax on high-cost insurance plans (known as the “Cadillac Tax”) with a 40 percent tax on benefit values above a certain threshold ($10,200 individual coverage, $27,500 family, indexed for inflation). Effective for tax years beginning after December 31, 2017. (H.R. 4872 Sec. 1401).