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Legislative update

Health Care Reform

Provisions effective Jan. 1, 2011:
Employers with calendar years starting six months after enactment of the March 2010 health care reform law will be prohibited from using lifetime maximums and restrictive annual maximums. They will also be barred from excluding adult children and children under 26 years of age from plan participation and excluding pre-existing conditions for children under 19 years old.

Reimbursements from Flexible Spending Accounts and Health Reimbursement Accounts cannot be made for any medicine obtained without a prescription.

Mini-Medical Plans may be eligible for exemption from Health Care Reform law

Employers offering limited health benefit plans (“mini-med” plans) can do so without modifying them to comply with the Affordable Care Act, provided they obtain a waiver from the Department of Health and Human Services (HHS). Many of the companies offering mini-med plans are applying for these exemptions on behalf of their customers.

Mini-med plans, which offer limited benefits but low deductibles and co-pays, are a cost-effective way for employers with high turnover and low wage earners to provide their employees with basic health insurance.

Employers must submit waiver applications at least 30 days before the beginning of the plan year for plans starting between September 23, 2010 and September 23, 2011. For calendar year plans, the deadline to apply for a waiver is December 1. Plans receiving a waiver must re-apply each year until the waiver program ends in 2014.

IRS final guidance for small business health care tax credit

The Internal Revenue Service on Dec. 2, 2010, released final guidance for small employers eligible to claim the new small business health care tax credit for the 2010 tax year. The credit is available to small employers that pay at least half of the premiums for single health insurance coverage for their employees. It is targeted to help small businesses and tax-exempt organizations that employ primarily moderate-and low-income workers.

Forms and additional guidance are available here.