By Barbara Carroll and Jean Edin
The Patient Protection and Affordable Healthcare Act was passed in Congress and signed by President Obama in March 2010. The provisions of the Healthcare Act will be implemented over a period of years.
Many of the regulations that will govern these provisions are yet to be written. It is difficult to tell at this point how the conference’s self-funded health insurance plan for clergy and lay workers, the MAC Plan, might change as a result of the Act. We still have more questions than answers.
The act has three main objectives: reform the health-insurance market by eliminating discriminatory practices (for example, not covering pre-existing health conditions), provide universal coverage, and make healthcare affordable for everyone.
The act requires most Americans to have health insurance that provides “minimum essential coverage” (as defined by the Secretary of Health and Human Services) or face a penalty. Small businesses (including nonprofits) are eligible for a refundable tax credit as an incentive to provide health insurance for their employees. (This provision is especially challenging and interesting for churches, because churches are not taxable entities and may have only one “employee,” a pastor for whom the church does not contribute Social Security.)
Uninsured individuals will be able to purchase health insurance from state-operated exchanges, where individuals can shop for insurance coverage, starting in 2014. No employer is required to provide health insurance for its employees but large employers could face a penalty under certain conditions if they do not provide coverage starting in 2014.
All health-plan renewals after September 23, 2010, will see some changes due to healthcare reform. Insurers may not exclude coverage of pre-existing conditions for children. They may not impose lifetime benefit limits. They may not rescind insurance when claims are filed (unless there is fraud or intentional misrepresentation). While there has been a lot of talk about government taking over healthcare, there is no public option in the reform.
The MAC Plan has already incorporated, or soon will incorporate, two changes required by the legislation: coverage for dependent children up to age 26 (effective for the MAC Plan in June 2010) and removal of lifetime maximum limits on benefits (effective when we renew our contract this fall).
Two other changes effective for 2011: over-the-counter medicines without prescription will no longer be reimbursable through flexible spending accounts and employers are required to report the aggregate cost of employer-sponsored health insurance coverage on the employee Form W-2. The reporting of health insurance on the 2011 W-2, which would normally be printed January 2012, may require a payroll systems update to accommodate this change. If your local church offers its own flexible spending account, you will need to keep up-to-date on changes effective over the next several years.
To help you sort through the rhetoric about healthcare reform, here are two web sources for factual information: the United Methodist General Board of Pension and Health Benefits (www.gbophb.org) and the Kaiser Family Foundation.
The Minnesota Conference Board of Pension and Health Benefits and conference staff continue to monitor the MAC Plan. As always, our goals are improved health for MAC Plan participants and the best combination of benefits and affordable premiums. We are awaiting regulations (and the inevitable court cases that will follow) to see how we must comply with and respond to the changes in the Patient Protection and Affordable Healthcare Act.
Barbara Carroll is director of finance and administration for the Minnesota Annual Conference of the United Methodist Church. Jean Edin is benefits officer for the Minnesota Annual Conference of the United Methodist Church.
Minnesota Annual Conference of the United Methodist Church