President Obama recently signed into law two pieces of legislation, the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (for purposes of this Alert, these Acts will be referred to collectively as "PPACA"), which, among other things, significantly alter employer responsibilities with respect to providing group health plan coverage to employees.
This Alert, which focuses on certain PPACA provisions which become effective before 2012, is the first in a series of Alerts that we expect to issue to describe various PPACA provisions of interest to employers. This Alert addresses new group health plan coverage and cost-sharing obligations (such as a ban on annual and lifetime benefit limits and pre-existing condition exclusions), new rules imposed on the administration of group health plans and new programs established under PPACA.We anticipate that we will circulate one or more follow-up Alerts highlighting important PPACA provisions that become effective after 2011, and which will address topics such as:
- PPACA's "pay or play provisions," which will impose penalties on large employers who do not offer health coverage to full-time employees or whose coverage does not meet certain minimum standards, beginning on January 1, 2014;
- A penalty imposed on large employers when certain employees choose not to enroll in the employer-sponsored plan and instead receive a federal subsidy to enroll in certain other insurance coverage, beginning on January 1, 2014;
- "Free choice vouchers" that certain employers will be required to offer to certain lower income employees who choose not to participate in employer plans, generally effective in 2014; and
- The "Cadillac" tax that will be imposed where the cost of coverage exceeds certain specified levels, starting with taxable years beginning after December 31, 2017.
We note that this Alert does not describe all PPACA provisions that become effective before 2012, and that uncertainties exist regarding how some of the provisions described here will work in operation. We anticipate that guidance will be issued to resolve these issues and our understanding of PPACA's requirements will continue to evolve as guidance is issued.
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