More Health Care Reform Learning

I attended a seminar on the Payment Protection and Affordable Care Act of 2010 yesterday. It was offered by our benefits provider The Healy Group and was very informative. If you have the opportunity to attend a seminar to help explain what's contained in the 2,400 page bill, I recommend it. Some things I learned:

• To keep health insurance coverage "as is" or "grandfathered" the coverage as of March 23, 2010 must be documented. In addition all changes to the plan after that date must also be documented. The reason is that there are several common changes that will cause a plan to lose "grandfathered" status like cutting or reducing benefits, significantly raising coinsurance, co-payments, deductibles, lowering employer contributions, and changing insurance carriers.
• For plan years after September 2010, insurers are no longer able to refuse or limit coverage for children with pre-existing conditions. Children up to age 26 will be allowed to stay on their parents' insurance plan.
• A new tax of 10% was added to tanning services starting July 2010.
• As of June 2010 a new high-risk pool for people with pre-existing conditions who haven't had insurance for at least 6 months was created.
• There is a small business tax credit available for small businesses.
• Starting in 2011, over the counter drugs like aspirin or claritin will no longer be reimburseable from an HSA/FSA/HRA account.
• In 2011, The excise tax on non-qualified distributions from an HSA increases from 10% to 20%.
• In 2011, Employers are required to report on Form W-2 the aggregate cost of health coverage provided to employees in 2011.

New 1099 Rules in Health Care Legislation

I may be behind the curve, but I just learned about this in a class I attended yesterday. It seems that there are new 1099 reporting rules buried in the 2,400 page health care legislation that was passed earlier this year.

These new 1099 rules, if not repealed, will go into effect in January 1, 2012 and will require reporting payments of more that $600 to all vendors not just independent contractors. This will also require collecting TINs from all vendors.

The net effect will be that it will require more time, cost, and effort to collect TINs from all vendors as well as more time and effort preparing 1099s. For example, we normally do a handful of 1099s for independent contractors each year. After 2012, we'll have to prepare several hundred 1099s each year.

Health Insurance Costs Increasing?

I've read a couple of articles like this one and this one recently. They all suggest that health insurance costs will rise for individuals and small businesses as a result of the recently enacted health care reform.

Further evidence of this potential increase in costs was the 26% rate increase that our insurance provider quoted us to renew our insurance coverage this year. Additionally, they refused to negotiate any rate relief with us. To be fair, their reason for the increase was our unusually high loss ratio - not health care reform. Needless to say, whatever the reason, we're shopping for a new insurance provider again this year.

Thought I'd put this out there as a heads up for any churches or small businesses with less than 100 employees.

Giving Webinar Today at Noon

I'll be participating in this webinar with Anthony Coppage from Fellowship Tech and Casey Graham from the Change Group. Should be an interesting discussion.