Affordable Care Act Timeline

The dust has settled!  The Supreme Court has determined that the Affordable Care Act (ACA) is constitutional and it is important to begin to plan for your future responsibilities, as well as, becoming informed about ACA provisions which may lead to increased future employer costs.  While the forthcoming Presidential Election might impact ACA, it is naïve to ignore your current responsibilities or not plan for the future.  As indicated below, penalties for failure to comply with ACA provisions are significant and even with a major political change in November; many of your ACA responsibilities will not change.


The ACA provisions will be implemented through 2018.  Many of the provisions will impact Medicare and Medicaid only. Therefore for the purpose of the following timeline, we have only identified those provisions which we believe will require employer action, and in some instances, will impact future employer healthcare costs.  However, this is not intended to be a complete listing of all of the ACA provisions.

2012 Provision Implementation Date Notes
Summary of Benefits (SBC) This provision of the Affordable Care Act (ACA) that requires private individual and group health plans to provide a uniform summary of benefits and coverage (SBC) to all applicants and enrollees. The intent is to help consumers compare health insurance coverage options before they enroll and understand their coverage once they enroll. The provision applies to all individual and group health plans, regardless of whether they are grandfathered or not, and takes effect by September 23, 2012. (The first plan renewal open enrollment period  following 9/23/12) Failure to comply penalties are not to exceed $1000 for each failure.  (For a 100 life group, the fine could equate to as much as $100,000.)
W-2 Reporting Rules Optional for 2011, but required for 2012 W-2 issued in 2013 1/1/2012 Only applicable to employers who filed at least 250 Form W-2 during the previous calendar year.  (Further guidance is anticipated)
2013


Itemized Deductions Increases the threshold for the itemized deduction for unreimbursed medical expenses from 7.5% of adjusted gross income to 10% of adjusted gross income; waives the increase for individuals age 65 and older for tax years 2013 through 2016. 1/1/2013
Flexible Spending Account Limits Limits the amount of contributions to a flexible spending account for medical expenses to $2,500 per year, increased annually by the cost of living adjustment. 1/1/2013 Limit applies only to unreimbursed medical expenses and does not apply to dependent childcare, premium reduction, transportation, etc.
Medicare Tax Increase Increases the Medicare Part A (hospital insurance) tax rate on wages by 0.9% (from 1.45% to 2.35%) on earnings over $200,000 for individual taxpayers and $250,000 for married couples filing jointly and imposes a 3.8% assessment on unearned income for higher-income taxpayers. 1/1/2013
Employer Retiree Coverage Subsidy Eliminates the tax-deduction for employers who receive Medicare Part D retiree drug subsidy payments 1/1/2013
Tax on Medical Devices Imposes an excise tax of 2.3% on the sale of any taxable medical device. 1/1/2013 On February 7, 2012, the IRS issued a proposed rule providing guidance on the tax that will be imposed on medical devices.
CO-OP Insurance Plans Creates the Consumer Operated and Oriented Plan (CO-OP) to foster the creation of non-profit, member-run health insurance companies. 7/1/2013
Extension of CHIP Extends authorization and funding for the Children's Health Insurance Program (CHIP) through 2012 (current authorization is through 2013). Fiscal Year 2013
2014


Individual Requirement to have Insurance (Individual Mandate) Requires U.S. citizens and legal residents to have qualifying health coverage (there is a phased-in tax penalty for those without coverage, with certain exemptions). 1/1/2014
Health Insurance Exchanges Creates state-based American Health Benefit Exchanges and Small Business Health Options Program (SHOP) Exchanges, administered by a governmental agency or non-profit organization, through which individuals and small businesses with up to 100 employees can purchase qualified coverage. Exchanges will have a single form for applying for health programs, including coverage through the Exchanges and Medicaid and CHIP programs. 1/1/2014
Health Insurance Premium and Cost Sharing Subsidies Provides refundable and advanceable tax credits and cost sharing subsidies to eligible individuals. Premium subsidies are available to families with incomes between 133-400% of the federal poverty level to purchase insurance through the Exchanges, while cost sharing subsidies are available to those with incomes up to 250% of the poverty level. 1/1/2014
Guaranteed Availability of Insurance Requires guarantee issue and renewability of health insurance regardless of health status and allows rating variation based only on age (limited to a 3 to 1 ratio), geographic area, family composition, and tobacco use (limited to 1.5. to 1 ratio) in the individual and the small group market and the Exchanges. 1/1/2014
No Annual Limits on Coverage (Unlimited Maximums) Prohibits annual limits on the dollar value of coverage. 1/1/2014
Essential Health Benefits Creates an essential health benefits package that provides a comprehensive set of services, limiting annual cost-sharing to the Health Savings Account limits ($5,950/individual and $11,900/family in 2010). Creates four categories of plans to be offered through the Exchanges, and in the individual and small group markets, varying based on the proportion of plan benefits they cover. 1/1/2014 Still requires clarification of the definition and intent.  Some indication that EHB’s will be defined based upon the three most common small group benefit designs per state, but HHS has yet to issue specific guidance.
Temporary Reinsurance Programs for Health Plans Creates a temporary reinsurance program to collect payments from health insurers in the individual and group markets to provide payments to plans in the individual market that cover high-risk individuals. 1/1/2014-12/31/2016 Fees for self funded plans are being considered.
Basic Health Plan Permits states the option to create a Basic Health Plan for uninsured individuals with incomes between 133-200% FPL who would otherwise be eligible to receive premium subsidies in the Exchange. 1/1/2014
Employer Requirements Assesses a fee of $2,000 per full-time employee, excluding the first 30 employees, on employers with more than 50 employees that do not offer coverage and have at least one full-time employee who receives a premium tax credit. Employers with more than 50 employees that offer coverage but have at least one full-time employee receiving a premium tax credit, will pay the lesser of $3,000 for each employee receiving a premium credit or $2,000 for each full-time employee, excluding the first 30 employees. 1/1/2014
Wellness Programs Permits employers to offer employees rewards of up to 30%, potentially increasing to 50%, of the cost of coverage for participating in a wellness program and meeting certain health-related standards; establishes 10-state pilot programs to permit participating states to apply similar rewards for participating in wellness programs in the individual market. Changes to employer wellness plans effective January 1, 2014; 10-state pilot programs established by July 1, 2014
Fees on Health Insurance "Sector" Imposes new fees on the health insurance sector. 1/1/2014 Will also include self funded benefit plans.
2018


Tax on High Cost Insurance (Cadillac Plans) Imposes an excise tax on insurers of employer-sponsored health plans with aggregate expenses that exceed $10,200 for individual coverage and $27,500 for family coverage. 1/1/2018 Will also apply to self funded plans.