Over the past several weeks I have been meeting with all our group policyholders reviewing what we know about upcoming health reform measures. This has been done without speculating too much time on how the law will ultimately unfold in later years, because we simply don’t know. In short, our focus with group policyholders these past few weeks has been on the following:

·         Small Business Health Care Tax Credit

·         Scheduled Changes for Grandfathered and non-Grandfathered Health Plans

·         Review Timetable of Reform Measures

Small Business Health Care Tax Credit

Beginning in tax years 2010, small businesses that qualify could be issued a tax credit up to 35% of their company’s contribution towards providing employee health insurance. Just last week, regulations were posted at irs.gov detailing the information needed to determine if a business is eligible and how to calculate the credit. The very latest information (see Notice 2010-44) is found at:

http://www.irs.gov/newsroom/article/0,,id=223577,00.html

This issue is a tax issue. PJMI is not licensed to provide tax advice. However, we will gladly work with you and your tax advisor on providing information necessary in order to make the determination whether you are eligible for, and the amount of, a tax credit.

Changes to Grandfathered and non-Grandfathered Health Plans

If your health plan was in effect on March 23, 2010, then your plan may be considered a “Grandfathered” Health Plan. Plans beginning afterwards would be considered “non-Grandfathered.” Required changes to both Grandfathered and non-Grandfathered plans take effect on the first renewal on or after October 1, 2010. Your insurance carrier will be the best source available to provide the most specific changes affecting your plan and when they take effect!

Review Timetable of Reform Measures

This is the area where we could all speculate till blue in the face, and basically get nothing done. Regulations are barely available on this year’s reform measures, much less those scheduled to occur four years from now. The year 2014 is when the most radical changes will occur. You will notice that the first set of reform measures in the early years focus on how insurance companies will behave. By 2014, the emphasis is clearly on getting everyone into the system. Individual and employer mandates take effect (which several states are deeming unconstitutional) and guaranteed health plans will be offered through an “exchange.” The concept of the exchange is interesting as it creates a brand new level of bureaucracy at the state level that will govern carriers competing within the exchange.