Patient Protection and Affordable Care Act (PPACA)

Scope

The law provides people with various rights and protections regarding their health insurance coverage. The law also expands the Medicaid program to cover more people with low incomes.

Regulatory citations

• None

Key definitions

• None

Summary of requirements

Plan design. Group health plans will need to comply with a variety of provisions, including the following, which are effective for plan years beginning on or after September 23, 2010 unless otherwise noted:

• Preexisting conditions. Plans are prohibited from imposing preexisting condition exclusions on children under the age of 19. In 2014 preexisting conditions cannot be applied to anyone.
• Rescissions. Plans are prohibited from rescinding existing health insurance policies when a person becomes ill.
• Lifetime limits. Plans are prohibited from establishing lifetime limits on the dollar value of essential health benefits.
• Annual limits. The use of restrictive annual limits on the dollar value of benefits that are essential health benefits for plan years before 2014 is limited. Annual limits are allowed on specific covered benefits that are not considered essential health benefits.
• Dependent coverage. Plans are required to provide dependent coverage for children to continue to make that coverage available up to age 26. This includes adult children who have jobs, are married, do not live with their parents, or are students. Grandfathered plans do not have to cover the dependent if he or she is eligible to enroll in another company’s group health plan. In 2014 dependents are to be covered even if they are eligible for other coverage.
• Flexible Spending Accounts (FSAs). Over-the-counter drugs can only be reimbursed through an FSA if prescribed by a doctor (other than insulin).
• Preventive care. Non-grandfathered plans must cover certain preventive care, immunizations, and screenings.
• Appeals process. Non-grandfathered plans must establish a new internal and external appeals process.
• Primary care providers. Non-grandfathered plans must allow participants to to choose any primary care provider.
• Emergency services. Non-grandfathered plans must cover emergency services without prior authorization, and as if the provider were in-network.
• OB/GYN care. Non-grandfathered plans must not require authorization for OB/GYN care.

Exchanges. Each state has a health benefit exchange (Exchange) through which individuals and some small employers may purchase health insurance. An Exchange may be a government agency or a nonprofit entity that is established by a state, or one established by the federal government.

If a large employer does not provide the minimum essential coverage to employees, or if the coverage is considered “unaffordable,” employees of such a company are also able to participate in the Exchange program. In 2017, if the state allows, any size employer may participate in the Exchange.

Employers are required to give employees plenty of notice regarding their coverage options available under the Exchange program. No later than March 1, 2013, new employees at the time of hire, and current employees, must be given a written notice informing them of the services provided under the new Exchange option; their potential eligibility for a premium tax credit and a cost sharing reduction if they purchase a plan through the Exchange; and notice that they will lose the employer contribution to any health benefits offered by their employer if they do so.

Tax credits. Certain small employers may be able to take advantage of a new health reform tax law if they provide health insurance to their workers and pay at least half the cost of single coverage for their employees. This provision became effective upon the law being signed. Employers that have fewer than 25 full-time equivalent (FTE) employees for the tax year, and whose average employee wage is less than $50,000, are eligible for the credit.

Information sharing. The law requires employers to provide information to various entities. This includes the following:

• Employers are to disclose the total value of the benefit provided by the employer for each employee’s health insurance coverage on the employee’s annual Form W-2 starting in 2012 (the forms furnished to employees by end of January 2013). Before that time, it is optional.
• Employers required to file fewer than 250 Forms W-2 need not report this information until further guidance is issued.
• As indicated, employers must give employees written notice that the Exchange exists; eligibility and contact information; notice of eligibility for a subsidy under the Exchange if the employer’s share of the total premium is less than 60 percent; and notice of loss of eligibility for the employer’s contribution to the company’s health plan if they purchase a policy through the Exchange.

Summary of benefits. Standards for use by a group health plan in providing a summary of benefits explanation to participants were published in 2011. A uniform format is required that is less than five pages using print no smaller than 12-point font. The summary is to be presented using terminology easily understood by an average participant, and appropriate to their culture and language. Standards will be provided so that consumers may compare health insurance coverage. The contents of the summary will address the coverage, cost-sharing (deductible, coinsurance, copayment), exceptions, reductions, limitations, and common benefits scenarios.

Each group health care must then provide a summary of benefits to an applicant or enrollee at the time of enrollment. An employer that willfully fails to provide this document is subject to $1,000 fine with respect to each enrollee.

Whistleblower protection. The law amended Section 1558 of the Fair Labor Standards Act to protect employees from employer retaliation actions — such as termination or discrimination — when employees:

1. Apply for health benefit subsidies or receive tax credits under the new health reform law,
2. Provide information about a violation of the PPACA, or
3. Object to or refuse to take part in practices or policies they believe violate the PPACA.

Employees must file a complaint with the Occupational Safety and Health Administration (OSHA) within 180 days of when a suspected retaliatory action was made by an employer. OSHA will then investigate the complaint and may provide the employee with an initial form of retribution, for example, restoration of employment. If OSHA is unable to resolve the complaint within 210 days or if the Labor Department fails to respond within 90 days of the receipt of OSHA’s determination about possible violations, then employees who filed the complaint can request assistance through a federal court and ask for a jury trial.

Possible resolutions to complaints include: employment restoration; back pay with interest; attorney’s fees; litigation costs; expert witness fees; and special damages such as compensation for pain, suffering, mental anguish, and career damage.

Long term care. The PPACA tried to implement a national voluntary insurance program which allows workers to purchase a type of long-term care plan through payroll deduction. This new program was called the CLASS Act, the short title for the “Community Living Assistance Services and Supports Act.” However, the program was scrapped in October 2011. The HHS Secretary indicated that it was unworkable and could not be implemented.

Breaks for nursing mothers. The PPACA requires employers to provide breaks and a place for employees to express breast milk. This became effective when the law was enacted. For more information on breaks, see the Breaks and Meal Periods topic.

Wellness plans. The PPACA allows employers to raise the cap on wellness discounts to 30%, or up to 50% for tobacco users.

Wellness programs cannot inquire if participants own, store, or use firearms or ammunition.