On March 21 the House of Representatives passed the Health reform Bill. Today I will be trying to decipher what this means for my clients. It is most important to NOT rely on Internet blogs and talk radio for valid information regarding this legislation.

Summary for this blog – help for the uninsured and uninsurable along with good news for children with pre-existing conditions.

Most of the changes will not go into effect for a few years and the nuts and bolts will be laid out by federal regulators. Most of the changes regarding guaranteed insurance and no pre-existing conditions will not start until 2014. There are a few changes that are suppose to be implemented immediately. So far I have found the following that will need to be instituted shortly after the enactment of the bill.

1. People who are uninsured for at least months and have health problems may become eligible for a new federal high risk pool. This is suppose to be activated 90 days after enactment. I will keep people posted.

2. People buying new plans will have plans with no limits on lifetime coverage. Current policies are grandfathered from this regulation.

3. Children can be added to parents plans without pre-existing conditions questions until age 26. This is suppose to be activated six months after enactment.

4. There is an immediate tax imposed on tanning salons.

5. At the same time some small businesses may qualify for a tax credit for insuring their employees. The employer must have less than 25 employees averaging less than $50,000 in wages. If they pay 50% of the employee’s rate, they will be entitled to a 35% tax credit. My math indicates that it will lower the employer’s cost to 33% of the employee’s rate.

If the employer has less than 10 employees averaging $25,000 or less in wages, the tax credit will be 50% lowering their net cost to 25% of the employee rate. As the details on this credit become available, it can be very helpful to small business employers in providing benefits to their employees.

6. People on Medicare Part D (Prescription coverage) have a “donut hole” in their coverage. To oversimplify, once they have purchased approximately $3,000 of prescriptions in a year they have no coverage for the next $3,000. This makes them pay full amount for those prescriptions. This donut hole will be reduced totally by the year 2020.  This year, anyone who experiences this “donut hole” will qualify for a $250 reimbursement.

All of us are working in the dark until the federal regulators spell out the specifics. I will do my best to keep all of you alerted on important changes.

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