In a 220-215 vote, House Democrats passed a controversial health care reform bill with only one Republican voting for the legislation. The Affordable Health Care for America Act (H.R. 3962) is a combination of three different health care reform bills approved by House committees this summer and is 1,990 pages with a 42-page manager’s amendment.
The bill would create an insurance exchange that offers insurance through private companies as well as through a government-run public option. The legislation would expand Medicaid, offer subsidies to lower-income individuals, and prohibit insurance companies from denying coverage to individuals based on their preexisting conditions. The bill also contains an individual mandate that would require most individuals to obtain insurance or pay a fine.
The legislation would have a tremendous effect on employers in many ways. It would establish several immediate reforms, most of which would be effective for plan years beginning January 1, 2010. Among other things, these immediate reforms would limit preexisting condition exclusions in group health plans, eliminate lifetime limits on benefits payable under group health plans or coverage, prohibit group health plans from reducing a retiree’s health benefits postretirement, and extend COBRA continuation coverage for certain COBRA participants until they become eligible for acceptable coverage or coverage through the new insurance exchange in 2013.
The bill also contains what House Minority Leader John A. Boehner (R-Ohio) calls “job-killing employer mandates.” More specifically, the legislation would require employers to provide health plan coverage to their employees or pay an excise tax (generally, 8% of the average wages that the employer paid during the period of enrollment). There is, however, an exemption for small employers (those with payrolls of less than $500,000), and smaller employers with payrolls between $500,000 and $750,000 would pay a smaller percentage based on their annual payroll.
In addition, the House bill contains provisions affecting employers that would generally become effective in 2013. For example, the legislation would set minimum employer contributions for full-time and part-time employees and establish civil penalties for employers that offer nonqualifying health coverage.
The focus of health care reform now turns to the U.S. Senate. Senate Majority Leader Harry Reid (D-Nevada) is still working on consolidating two Senate health care reform bills before he takes a final bill to the Senate floor for debate. If the Senate passes its own health care reform bill, it would have to be reconciled with the House bill.
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