Guest Blogger: Stefanie R. McNamara, General Counsel at St. Peter’s University Hospital (formerly a Senior Associate with Norris McLaughlin & Marcus, P.A.)
As health care reform is now the law of the land in the U.S., foreign entities who do business here in the U.S. need to know about a few aspects of the law that will immediately impact them. While the Senate is expected to further tweak the entire health care reform package that was passed by the House and signed into law by the President, there The following are a few key things that U.S. employers, together with their insurance carriers, must begin to address now.
- Employee medical Flexible Spending Account (FSA) contributions have been reduced to $2,500 per year effective in 2011. Further, use of FSA funds for certain over-the-counter medications has been limited. Currently, employees may make contributions of typically up to $5,000 per year for medical FSAs. The Senate is expected to vote on delaying implementation of this limit until 2013.
- Effective immediately, rescission of health insurance coverage, except in the case of fraud, is prohibited.
- Effective immediately, U.S. businesses with 10 or fewer employees who earn less than $25,000 on average are eligible for up to a 50% tax credit based on the cost of premiums to offset the cost of providing insurance. The tax credit decreases as the number of employees and average wages go up and is not applicable once the U.S. business has more than 25 employees. There is no tax credit for the employer with respect to employees earning over $80,000 a year.
- Within the next 6 months Effective September 23, 2010, insurance plans may not have a lifetime limit on benefits and parents shall be allowed to cover their children on their insurance until the child turns 26 years old and currently covered children may not be excluded for a pre-existing condition.
- While there is no definitive language in the law requiring health insurers to provide new policies children with pre-existing conditions prior to 2014, when most of the mandated coverage requirements go into effect, the Health and Human Services Secretary has indicated that her office will soon be issuing regulations requiring coverage to children with pre-existing conditions now.
The bulk of the provisions will go into effect in 2014 – stay tuned for updates.
UPDATE (3/31/2010): Senate has made its few tweaks to the law last Thursday 3/25 and there was a loophole fix, as described in #5.