Aon Hewitt Health Care Reform

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Health Care Reform Chronology



  • Senate Bill (H.R. 3590) enactment
  • Reconciliation Bill (H.R. 4872) enactment


  • Small business under 25 employees eligible for tax credit (retroactive to 1/1/2010)
  • Temporary reinsurance program for employers who provide coverage for early retirees
  • Provides immediate access to high risk pools for uninsured (pre-existing conditions)
  • Seniors will receive a $250 rebate to help fill the Medicare “donut hole”


  • Bans pre-existing conditions exclusions for dependents under age 19
  • Prohibits lifetime / restrictive annual dollar maximums
  • Mandates dependent coverage to age 26 for those not eligible for other group coverage
  • Prohibits rescissions except for fraud
  • Preventive care covered without cost sharing (new plans)
  • Group plans must cover ER services without prior authorizations and in- or out-of-network (new plans)
  • Group plans must allow designation of OB/GYN or pediatrician as PCP (new plans)
  • Employer plans must have HHS approved external appeal process (new plans)
  • Insured group health plans subject to nondiscrimination rules re: highly compensated individuals (new plans)

Employer Checklist

  • Assess applicable effective dates for grandfathered, nongrandfathered plans and collectively bargained plans
  • Apply for small business (<25 employees)="" tax="" credit="" for="" providing="" health="" coverage,="" if="" applicable="">
  • Address accounting implications of elimination of tax exclusion of retiree drug subsidy in 2013, if applicable
  • Apply for federal reinsurance program if employer provides retiree health coverage
  • Effective for plan years beginning after September 23, 2010
  • Plan design changes
    • No pre-existing conditions exclusions for dependents under age 19
    • No lifetime dollar limits
    • Only “restricted” annual limits allowed (per HHS)
    • Dependent coverage to age 26
    • Preventive care coverage without cost sharing
    • No rescissions except for fraud
    • Cover emergency services without prior authorizations and in- or out-of-network
    • Allow designation of OB/GYN or pediatrician as PCP
  • Implement an approved external appeals process for denied claims
  • Perform nondiscrimination testing regarding highly compensated employees in insured group plans


  • Employers required to disclose value of health benefits on W-2 forms
  • OTC drugs without prescription no longer eligible under FSA, HRA, or HSA
  • Higher penalty on withdrawal of HSA funds for non-medical expenses
  • Employers with less than 100 employees are eligible for wellness grants (up to 5 years)
  • New federal voluntary LTC program established (CLASS Act)
  • Requires insurers to annually report percent of premiums spent on medical services; if less than 80%, must provide rebate to enrollees (large group plans must spend 85%)

Employer Checklist

  • Report value of health coverage on employees’ W-2 forms (i.e., W-2 forms issued in 2012 for 2011 wages)
  • Prohibit health account reimbursement for over-the-counter drugs (except insulin) without a prescription
  • Communicate to employees regarding higher penalty for withdrawal of Health Savings Account funds for non-medical expenses
  • Apply for wellness grants for establishment of wellness programs for small employers (<100 employees)="">
  • Consider offering employees access to the voluntary federal long term care insurance program (CLASS Act) through payroll deduction





  • Employers required to provide employees with Uniform Summary of Coverage (24 months post-enactment)
  • Plans must report annually to HHS and participants regarding improving quality of care (24 months post-enactment)
  • Employers must satisfy expanded Forms 1099 reporting requirements for payments to corporate service providers

Employer Checklist

  • Insurers and self-insured plan sponsors must issue Uniform Explanation of Coverage to employees (no later than 3/23/2012)
  • Group plans and insurers must report annually to HHS and participants regarding plan benefits that improve quality of care (no later than 3/23/2012).
  • Ensure that expanded Forms 1099 reporting requirements are satisfied for payments for corporate service providers in 2012 and beyond


  • Caps FSA contributions to $2,500/year
  • Imposes an additional hospital insurance tax of .9 percent on high income individuals ($200,000 individual, $250,000 joint)
  • Imposes an additional 3.9% Medicare payroll tax on unearned income for high income individuals ($200,000 individual, $250,000 joint)
  • Imposes a comparative effectiveness fee of $2 per participant for insurers
  • Employers required to provide written notice to employees about Exchange and subsidies
  • Tax exclusion of Medicare Part D drug subsidy eliminated

Employer Checklist

  • Limit Flexible Spending Account contributions to $2,500 annually
  • Communicate to employees regarding new Medicare taxes for high wage earners
  • Insurers and self-insured plan sponsors must pay a comparative effectiveness fee of $2 per participant annually, ($1 in 2013)
  • Provide employees with written notice regarding availability of Exchange plans and subsidies
  • Tax exclusion of Medicare Part D drug subsidy eliminated


  • Employers with more than 50 employees must offer coverage or pay free rider penalty
  • Employers required to offer free choice vouchers to qualified employees
  • Cost sharing limits for group health plans – annual OOP limits cannot exceed HSA limits; deductibles cannot exceed $2,000 single and $4,000 family coverage (new plans)
  • Bans pre-existing conditions exclusions for all individuals
  • Bans waiting periods greater than 90 days
  • Employers permitted to offer employees wellness incentive rewards of up to 30 percent of health plan premiums
  • Employers must report on provision of minimum essential coverage and EE contributions exceeding 8% of wages
  • Requires individual mandate to obtain health care coverage
  • Provides subsidies for families earning up to 400 percent of the poverty level or, under current guidelines, about $88,000 a year to purchase health insurance
  • State based Insurance Exchanges operational for individuals and small groups; expanded to large groups in 2017
  • Health plans must cover routine costs for clinical trial participants (new plans)
  • Group plans/insurers cannot discriminate against any provider with regard to plan participation (new plans)

Employer Checklist

  • Plan design changes
    • No waiting periods greater than 90 days
    • No pre-existing conditions exclusions for any individuals
    • Cost sharing limits for group health plans
    • Cover routine costs for clinical trial participants (new plans)
    • No discrimination against providers with regard to plan participation (new plans)
  • Communicate insurance reform changes to all employees, including individual coverage mandate, subsidies and tax penalties
  • Determine applicability of free rider penalty and free choice vouchers to employer
  • Determine whether to offer employees discounts of up to 30% of coverage costs for participating in a wellness program
  • Report to IRS and participants regarding provision of minimum essential benefits
  • Small employers (<100 employees)="" should="" determine="" whether="" to="" purchase="" coverage="" through="" an="" exchange,="" if="">


Employer Checklist

  • Large employers (>100 employees) should determine whether to purchase coverage through an Exchange, if permitted by state


  • Imposes a 40% excise tax on high cost health plans that exceed $10,200 for individual and $27,500 for family coverage

Employer Checklist

  • Assess whether any health plan is considered a high cost plan subject to the new excise tax

Latest Information

Health Care Reform: Frequently Asked Questions
The following FAQ includes answers to many of the most timely and commonly asked questions related to health care reform, listed in an easy-to-follow manner. This document will be updated regularly and only the most current information will be published. If you require additional information, after reviewing this document, please click here to submit a question.

Aon Hewitt’s Alert on Health Care Reform
All significant topics on health reform are addressed with this alert.

Health Care Reform: Avoid Unexpected Costs, Penalties and Compliance Violations
Aon Hewitt developed the Health Care Reform Impact Analysis Tool to provide employers direction and answers to their inquiries about the financial impact and timing concerns of health care reform.

Grandfathered Plan Guidance Issued
HHS, the IRS, and DOL jointly issued Interim Final Regulations on grandfathered health plans. This Alert provides highlights of the Regulations, explains what a grandfathered health plan is, describes special transition rules, outlines which provisions in the Regulations are—and are not—applicable to grandfathered plans, and provides next steps for plan sponsors.

Aon Hewitt Alert on Annual/Lifetime Limits, Pre-Existing Condition Exclusions, Rescissions, and Patient Protections

Aon Hewitt Alert on W-2 Reporting Relief to Employers
The Internal Revenue Service (IRS), October 12, 2010, released Notice 2010-69 providing interim relief to employers with respect to reporting the cost of coverage under an employer-sponsored group health plan on Form W-2, Wage and Tax Statement.

Guidance on Coverage of Preventive Services
Federal agencies have jointly issued interim final regulations regarding coverage of preventive services under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (together, the “Health Care Reform Law”). The Regulations will be published in the Federal Register on July 19, 2010, and will apply to plan years beginning on or after September 23, 2010. This alert looks at the highlights and shares next steps.

Impact of Health Care Reform on Prescription Drugs
New mandates lead to direct and indirect effects on prescription drugs.

Health Care Reform – Insurance Reform Chart
Review a comprehensive dashboard for new and existing plans, based on health reform.

Health Savings Accounts: Overview of Rules for 2010

Additional Pages:

Weekly Briefings:

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Recorded Webinars

Additional Resources:

Health Care Side-by-Side Chart [March 30,2010]

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