Health Care Overhaul:
What Happens When

A blow-by-blow rundown of when and how the health care bill will take effect

The 2,400-page health care bill will gradually take effect over the next few years. Here is a year-by-year rundown of what happens when:

In 2010:
• Provides tax credits to small employers with no more than 25 workers and average annual wages of less than $50,000 if they purchase health insurance for employees.

• Creates a temporary reinsurance program for employers that provide health insurance coverage to retirees over age 55 who are not eligible for Medicare. Effective 90 days after the bill’s signing.

• Establishes a temporary national high-risk pool to provide health coverage to individuals with preexisting medical conditions. Effective within 90 days of enactment.

• Requires that all individual and group policies offer dependent coverage for children up to age 26.

• Provides a $250 rebate to Medicare beneficiaries who reach the Part D coverage gap in 2010.

• Prohibits individual and group health plans from placing lifetime limits on the dollar value of coverage; prior to 2014, plans may only impose annual limits on coverage as determined by the Secretary of Health & Human Services. Prohibits insurers from rescinding coverage except in cases of fraud and prohibits preexisting condition exclusions for kids.

• Requires qualified health plans to provide, at a minimum, coverage without cost sharing for preventive services rated A or B by the U.S. Preventive Services Task Force, recommended immunizations, preventive care for infants, children and adolescents and additional preventive care.

In 2011:
• Requires employers to disclose the value of health benefits on workers’ W-2 IRS forms.

• Provides free preventive services to Medicare beneficiaries, such as screenings for colon, prostate and breast cancer.

• Sharply cuts government payments to Medicare Advantage, the private plans that wrap Medicare and supplemental benefits in a HMO/PPO-type package.

• Provides a 10% Medicare bonus to primary care doctors and general surgeons practicing in areas with shortages.

• Offers grants for up to five years to small employers that establish wellness programs.

• Creates a national, voluntary long-term care insurance program to help seniors buy services so they can continue to live in their community rather than a nursing home.

• Sets up a five-year demonstration program with grants to states to study alternatives to malpractice litigation.

• Requires chain restaurants and vending machines to disclose the nutritional content of each food item available for sale.

• Bars Health Savings Accounts, Flexible Spending Arrangements and Health Reimbursement Arrangements from reimbursing participants for over-the-counter drugs unless they are prescribed by a physician.

• Doubles (to 20%) the tax on distributions from an HSA that are not used for qualified medical expenses.

• Provides Medicare Part D beneficiaries who reach the “doughnut hole” a 50% discount on brand-name drugs.

• Imposes an annual fee on drug companies based on market share.

In 2013:
• Eliminates the deduction that employers now take for providing Medicare Part D Rx drug coverage to their retirees.

• Increases the threshold, from 7.5% to 10% of adjusted gross income, above which medical expenses can be itemized on Schedule A of the annual income tax form. Taxpayers age 65 and older will be exempt from this change through 2016.

• Limits contributions to an FSA for medical expenses to $2,500 per year, increased annually by the cost of living adjustment.

• Raises the Medicare Part A (hospital insurance) tax rate on wages by 0.9% on earnings over $200,000 for individual taxpayers and $250,000 for married couples filing jointly. There also would be a 3.8% assessment on unearned income for higher-income taxpayers.

• Imposes an excise tax on the sale of medical devices, except for items purchased at the retail level by the public.

In 2014:
• Mandates that all U.S. citizens and legal residents have health insurance. There would be a phased-in tax penalty for those without coverage, starting at the greater of $95 or 1% of income, in 2014, and rising to the greater of $695 or 2.5% of income in 2016.

• Mandates the start of operations for state-based Health Insurance Exchanges to serve as a marketplace in which individuals and small businesses can buy health insurance.

• Imposes fines on employers with 50 or more workers that do not offer coverage. The fine will equal $2,000 per worker, although the first 30 workers would not be counted.

• Limits any waiting period for coverage to 90 days.

• Provides a refundable tax credit to help low-income folks buy coverage. To be eligible, a person’s household income must be between 100% and 400% of the federal poverty level, generally around $11,000 to $44,000 for singles and $22,000 to $88,000 for families.

• Expands Medicaid to all individuals under age 65 with incomes up to 133% of the poverty level.

• Allows employers to offer employees rewards of up to 30% of the cost of coverage (possibly increasing to 50%) for participating in a wellness program and meeting certain health related standards.

• Establishes an Independent Payment Advisory Board made up of 15 members to submit recommendations to Congress to reduce the growth of Medicare spending if spending exceeds a target growth rate. • Requires that health insurance companies start paying fees to the government based on market share.

In 2018:
• Imposes an excise tax on high-cost health plans, defined as those providing coverage in excess of $10,200 for individuals and $27,500 for families.