Healthcare Reconciliation Bill Passes Senate - Grandfathered Plans Now Subject to Additional Reforms

This afternoon the Senate passed the healthcare Reconciliation bill.  The Reconciliation bill is a package of amendments to the healthcare reform bill signed into law on Tuesday. 
Included in the bill is a provision that applies certain market reforms to grandfathered plans (plans in effect prior to the Patient Protection and Affordable Care Act being signed into law on 3/23/10).  SIIA's Government Relations Staff was able to have an amendment proposed to take out this provision, but unfortunately, this attempt was unsuccessful.  The following reforms now apply to grandfathered plans (including self-insured): 

  • Prohibits plans from capping annual and lifetime limits
  • Prohibition on exclusions based on preexisting conditions
  • Prohibition on recessions
  • Coverage of dependents up to age 26 (but only to those without their own access to an employer-sponsored plan)
Other changes to the Patient Protection and Affordable Care Act made by the Reconciliation bill are as follows:

Changes to the employer mandate penalties:
For employers that do offer coverage, but have at least one employee receiving a low-income tax subsidy, to pay $3,000 per-employee receiving the subsidy.
Expand eligibility for tax subsidies:
Would allow employees with higher-incomes to receive tax subsidies
Changes to individual mandate penalties:
Decreases the flat dollar penalty, but increases the % of income penalty - individuals are required to pay the higher in the event of non-compliance.
Changes excise tax:
Would delay implementation of the excise tax and increase its thresholds
The healthcare Reconciliation bill will be considered one last time by the House tonight where it is expected to pass.  The President will then sign it into law within the next few days.