UC Berkeley Labor Center (comments by EQUAL)	Summary of Health Reform Bill Provisions Affecting Individuals and Employers
	Senate	House
Medicaid/CHIP Eligibility	• Medicaid expanded to 133% FPL or less for non-elderly (children, parents and childless adults) in 20141	Medicaid expanded to 150% FPL or less for non-elderly (children, parents and childless adults) in 20138
Exchange Eligibility	Option to purchase coverage through exchange if not offered ESI or if the employee premium cost for ESI exceeds 9.8% of income or has actuarial value of less than 60%13 • Beginning in 2014, the 9.8% affordability standard is adjusted by the excess of premium growth over income growth13	• Option to purchase coverage through exchange if not offered ESI or if the employee premium cost for ESI exceeds 12% of family income19
House better for immigrants.	Undocumented immigrants not eligible for coverage or subsidies in exchange, but documented immigrants subject to the five-year wait period can get subsidies in exchange14 and documented children with undocumented parents can access exchange15	Undocumented immigrants not eligible for subsidies in exchange, but can purchase unsubsidized coverage in the exchange; documented immigrants subject to the five-year wait period can get subsidies in exchange20
House better for inclusion in public option.	Small employers of up to 100 employees can participate when exchanges open by 2014; state option to define small employers as 50 employees or less through 201516	Small employers of 25 employees or fewer can participate in the exchange in 2013, 50 employees or fewer in 2014, and 100 employees or fewer in 201521 • Large employers phased into exchange beginning in 201522
Premium Subsidies	• Premium subsidies for families with income 100–400% FPL, based on modified gross incomea (MGI) of family income23	Premium subsidies for families with income 100–400% FPL, based on modified adjusted gross incomeb (MAGI)27
House better for lower income. Senate better for middle income.	Premiums capped at �� 2.0% of income for 100–133% FPL, but only applicable for legal residents who are not eligible for Medicaid �� 4.0–9.8% for 133–300% FPL, scaled linearly �� 9.8% for 301–400% FPL23	Premium percentage caps are to be set by the Secretary “on a sliding scale in a linear manner” between the initial and final percentages listed below: �� 134–150% FPL: 1.5–3.0% �� 151–200% FPL: 3.0–5.5% �� 201–250% FPL: 5.5–8.0% �� 251–300% FPL: 8.0–10.0% �� 301–350% FPL: 10.0–11.0% �� 351–400% FPL: 11.0–12.0%28
Cost Sharing   House MGI standard better	Plans must reduce cost sharing for credit-eligible individuals �� At 101–200% FPL, the reduction is first applied to the out of pocket (OOP) maximums and then further cost sharing reductions are applied to reach the actuarial values specified: 90% for 101–150% FPL and 80% for 151–200% FPL �� At 201–400% FPL, the reduction is applied to the OOP maximums and shall not result in an increase in the actuarial value of the plan above 70%32 • Cost sharing subsidies only apply to eligible individuals who enroll in the Silver plan32 • OOP maximums are based on percentage of HSA limits as follows (2010 dollars): �� 101–200% FPL: $1,983/$3,967 �� 201–300% FPL: $2,975/$5,950 �� 301–400% FPL: $3,967/$7,933 �� 401%+ FPL: $5,950/$11,90032 The Secretary makes payments to health plans equal to the value of the increase in actuarial value, such payments may be capitated32	The Commissioner shall specify a reduction in cost-sharing amounts and the out of pocket maximums under a Basic plan for each income tier so that the actuarial values are equal to the values specified in the bill (listed below)33 • Cost sharing subsidies only apply to eligible individuals who enroll in the Basic plan34 • Out of pocket maximums35 (2013 dollars): �� 134–150% FPL: $500/1,000 �� 151–200 FPL %: $1,000/2,000 �� 201–250 FPL %: $2,000/4,000 �� 251–300 FPL %: $4,000/8,000 �� 301–350 FPL %: $4,500/9,000 �� 351–400 FPL %: $5,000/10,000 �� 401%+ FPL: $5,000/10,000 (Note: The Commissioner has the authority to adjust the out of pocket maximums to ensure that the limits meet the actuarial value specified for each income tier)36 a MGI equals gross income including interest income minus deductions for business expenses, losses from the sale of property or expenses related
Health Plan Standards   House better: Covers children to age 27.   Premiums based on age limited to 2:1, no health-related conditions (e.g. tobacco use)   House eliminates individual market (outside of exchange)	Effective upon enactment, all plans (excluding grandfathered plans) must have no lifetime limits or unreasonable annual limits, offer first dollar coverage for preventive services, allow unmarried adult children under age 26 to enroll in a parent’s plan, and provide rebates to consumers for any overhead (non-medical) spending above 20% of premium revenue for group plans and 25% for individual plans (or lower standard set by state, if applicable)45 • Additional requirements for exchange plans: Minimum services defined below and OOP maximum of $5,950/$11,900 (2010 dollars) or less;46 rating variation allowed: age (3:1), tobacco (1.5:1.0), family composition and geography47 • Minimum services covered by individual and small group plans (excludes grandfathered and large group plans): preventive and primary care, emergency, hospital, physician, outpatient, maternity and newborn care, pediatric (including dental and vision), medical/ surgical care, drugs, lab, and mental health and substance abuse; the Secretary must certify that scope of benefits is equal to that of the “typical” employer plan48 • Additional requirements for employer plans (excluding self-insured and grandfathered plans): OOP maximum of $5,950/$11,900 (2010 dollars)49 Self-insured plans and Multi-Employer Welfare Arrangements (MEWAs) are exempt from many of the plan requirements, however if a self-insured plan requires employee contributions that are more than 9.8% of income or has an actuarial value of more than 60%, the plan is considered unaffordable and the individual is eligible for the exchange50 • Existing employer plans are grandfathered for current employees, their family members and new employees; plans covered under Collective Bargaining Agreements must meet the new plan requirements by the last expiration date of an agreement related to that coverage51 • Proposal does not eliminate individual market outside of the exchange52	Effective in 2010, all individual and group plans (including self-insured) must allow adult uninsured children under age 27 to enroll in a parent’s plan if they would otherwise be considered a dependent except for age,53 must comply with a minimum medical loss ratio (set by the Secretary, but not less than 85%)54 and require no annual or lifetime limits55 • Additional requirements for exchange plans: Minimum services defined below, first dollar coverage for preventive services, OOP maximum of $5,000/10,000 (2013 dollars) or less56 and rating variation only allowed based on age (2:1) and geography57 • Minimum services required for exchange plans: hospital, outpatient hospital and clinic, including emergency, professional (physician and other) and related services, drugs, rehabilitative and habilitative, mental health and substance abuse, preventive, maternity, well-baby and wellchild and DME and related equipment58 • Individual plans that do not meet the new standards are grandfathered for existing enrollees;59 all plans for new enrollees must meet same standards as exchange plan • Employer-based plans (including self-insured) have 5-year grace period to meet same standards as exchange plans60 Proposal eliminates individual market outside of the exchange61
Employer Responsibilities   House stronger: Based on eer. Revenue, not no. employees.   Many employers exempt in Senate.	Beginning in 2014, large employers (more than 50 full-time employees) not offering coverage with at least one employee receiving subsidies in the exchange pay $750 multiplied by the number of full-time employees, where full-time is defined as 30 hours or more62 • Large employers offering coverage with at least one employee receiving subsidies in the exchange pay the lesser of $3,000 multiplied by the number of full-time employees receiving subsidies and $750 multiplied by the total number of full-time employees62 • Waiting periods of more than 90 days are banned63 • Large employers with a waiting period of more than 30 days but fewer than 60 days pay $400 for each full-time employee to whom the waiting period applies; the fee is $600 for waiting periods of more than 60 days64 • Fees are indexed like premiums after 201464 • Requirements for qualifying employer plan (not applicable to self-insured plans65): no lifetime limits or unreasonable annual limits,66 OOP maximum of $5,950/$11,900 (2010 dollars)67 and first dollar coverage for preventive services68 • Employers with 200 or more full-time employees must automatically enroll employees into a plan unless they opt out of coverage69	Beginning in 2014, requires employer to contribute at least 72.5% for family coverage and 65% for individual coverage or pay: �� Nothing if payroll is less than $500k �� 2% of payroll if $500–585k �� 4% if $585–670k �� 6% if $670–750k �� 8% if above $750k70 • The 72.5/65% standards are adjusted in a proportionate manner for part-time employees,71 “full-time” to be defined by Commissioner72 • Payroll is defined as the aggregate wages paid by the employer during the calendar year73 • Requires employers to automatically enroll employees who do not enroll or opt out of coverage into the employer’s lowest cost plan74
Small Business Tax Credit	Tax credits for small businesses with 25 FTEs or fewer and average wages of no more than $40,000 in 2011-2013, in subsequent years the amount is $20,000 plus $20,000 multiplied by a cost of living adjustment80 • Credit pays up to 50% of employer contributions (up to 35% in the case of a tax-exempt small businesses) beginning in 2014; in 2011–2013 the maximum credit is 35% (up to 25% in the case of tax-exempt businesses)80 • The credit varies based on employer size and average wage—full credit if 10 FTEs or fewer and average wages of $20,000 or less, but phases out as firm size and average wage increases according to the following formula: Credit = 0.5 – 0.5 * [(Total FTEs – 10)/15 + (Average annual wages - $20,000)/$20,000] (Note: The formula for tax-exempt small businesses replaces 0.5 with 0.35) 80 • Credit can only offset tax liability and is not refundable80 • Credit only available for employers that purchase coverage through exchange beginning in 201480 • An employer can only receive the credit for two consecutive years once they begin offering coverage through the exchange80	Tax credits for small businesses with 25 employees or fewer and average wages of no more than $40,000 (2013 dollars, with cost of living adjustment applied in subsequent years)81 • “Employee” means anyone receiving more than $5,000 in compensation during the tax year82 • No credit for employees earning less than $5,000 or more than $80,00083 • Available on a rolling basis for the first two years an employer provides health coverage84 • Credit pays up to 50% of healthcare costs beginning in 2013, varies based on employer size and average wage— full credit if 10 employees or fewer and average wages of $20,000 or less, but phases out proportionally as firm size or average wage increases85
Taxes on Insurers and Individuals	Tax insurers at 40% of aggregate value of plans above thresholds: $8,500 for individual coverage and $23,000 for family coverage beginning in 2013, indexed to CPI-U plus 1% �� For self-insured plans, the tax is paid by the plan administrator �� Higher thresholds for retirees age 55+, individuals in highrisk jobs and electrical and telecommunications installation/repair workers: add $1,350/$3,000 (indexed similarly) �� Higher thresholds in 17 states with highest healthcare costs (determined by Secretary) for limited time— 20% higher threshold in 2013, 10% in 2014, 5% in 2015, 0% in 201686 • Fee on insurers beginning in 2010 equal to a percentage of $6.7 billion based on insurer’s market share of premiums, excludes selfinsured plans and government-run plans87 • Annual fee on all insurers of $2 per covered life in 2013–2019, includes self-insured plans88	None
Retiree Coverage	$5 billion appropriated to temporarily reimburse employers or insurers for retiree coverage for those aged 55–64, reimburses 80% of claims between $15,000 and $90,000 effective 90 days after enactment through the end of 201390	$10 billion appropriated to temporarily reimburse employers or insurers for retiree coverage for those aged 55–64, reimburses 80% of claims between $15,000 and $90,000 effective 90 days after enactment 91
Risk Adjustment	Each state shall assess charges to individual and small group plans with low actuarial risk and make payments to plans with high actuarial risk to minimize adverse selection; excludes self-insured plans92 • Insurers in individual market are required to purchase reinsurance beginning in 2014 and the reinsurance entity will make payments to plans covering high-risk individuals (to be defined by each state); aggregate national reinsurance payments should equal $10 billion in 2014, $6 billion in 2015 and $4 billion beginning in 201693 • The Secretary will establish a risk corridor program modeled after the Medicare Part D risk corridors. Individual and small group health plans in the exchange must participate in 2014–2016. Plans will receive from or make payments to the government depending on their allowable costs: �� If allowable costs (reduced by any risk adjustment or reinsurance payments) are 103–108% of the “target amount” (total premiums minus administrative costs), the government and the plan will split the excess equally �� If more than 108%, the government will pay the plan 2.5% of target amount plus 80% of allowable costs above 108% �� If 92–97%, the government and the plan will split the difference evenly �� If less than 92%, the plan will pay the government 2.5% of expected costs plus 80% of allowable costs under 92%94	The Commissioner is responsible for implementing a risk pooling system for plans participating in the exchange95

1 Senate, HR 3590, November 18, 2009, Sec. 2001

2 Senate, HR 3590, November 18, 2009, Sec. 2101

3 Senate, HR 3590, November 18, 2009, Sec. 2001

4 Senate, HR 3590, November 18, 2009, Sec. 2002

5 Senate, HR 3590, November 18, 2009, Sec. 2101

6 Senate, HR 3590, November 18, 2009, Sec. 2003

7 Senate, HR 3590, November 18, 2009, Sec. 2001

8 HR 3962, October 29, 2009, Page 1013

9 HR 3962, October 29, 2009, Page 1029

10 HR 3962, October 29, 2009, Page 1030

11 HR 3962, October 29, 2009, Page 1028

12 HR 3962, October 29, 2009, Page 1015

13 Senate, HR 3590, November 18, 2009, Sec. 1401

14 Senate, HR 3590, November 18, 2009, Sections 1312 and 1401

15 Senate, HR 3590, November 18, 2009, Sections 1312 and 2707

16 Senate, HR 3590, November 18, 2009, Sections 1304 and 1311

17 Senate, HR 3590, November 18, 2009, Sec. 1312

18 Senate, HR 3590, November 18, 2009, Sec. 2707

19 HR 3962, October 29, 2009, Page 249

20 HR 3962, October 29, 2009, Pages 247 and 267

21 HR 3962, October 29, 2009, Page 80

22 HR 3962, October 29, 2009, Page 80

23 Senate, HR 3590, November 18, 2009, Sec. 1401

24 Enrollment in a particular plan is not listed as a qualification for “applicable taxpayers” in Section 1401

25 Senate, HR 3590, November 18, 2009, Sec. 1402

26 Senate, HR 3590, November 18, 2009, Sec. 1401

27 HR 3962, October 29, 2009, Page 252

28 HR 3962, October 29, 2009, Page 251

29 HR 3962, October 29, 2009, Page 251

30 HR 3962, October 29, 2009, Pages 245-246

31 HR 3962, October 29, 2009, Pages 252-253

32 Senate, HR 3590, November 18, 2009, Sec. 1402

33 HR 3962, October 29, 2009, Page 253

34 HR 3962, October 29, 2009, Pages 245-246

35 HR 3962, October 29, 2009, Page 252

36 HR 3962, October 29, 2009, Page 255

37 HR 3962, October 29, 2009, Page 254

38 HR 3962, October 29, 2009, Page 255

39 HR 3962, October 29, 2009, Page 170

40 HR 3962, October 29, 2009, Page 108

41 Senate, HR 3590, November 18, 2009, Sec. 1302

42 Senate, HR 3590, November 18, 2009, Sec. 1402

43 HR 3962, October 29, 2009, Pages 108 and 115

44 HR 3962, October 29, 2009, Page 252

45 Senate, HR 3590, November 18, 2009, Sec. 1001

46 Senate, HR 3590, November 18, 2009, Sec. 1302

47 Senate, HR 3590, November 18, 2009, Sec. 2701

48 Senate, HR 3590, November 18, 2009, Sec. 1302

49 Senate, HR 3590, November 18, 2009, Sec. 1302

50 Senate, HR 3590, November 18, 2009, Sec. 1301

51 Senate, HR 3590, November 18, 2009, Sec. 1251

52 Senate, HR 3590, November 18, 2009, Sec. 1312

53 HR 3962, October 29, 2009, Page 32

54 HR 3962, October 29, 2009, Page 27

55 HR 3962, October 29, 2009, Page 23P

56 HR 3962, October 29, 2009, Pages 104-107

57 HR 3962, October 29, 2009, Page 22

58 HR 3962, October 29, 2009, Pages 105-106

59 HR 3962, October 29, 2009, Pages 91-92

60 HR 3962, October 29, 2009, Pages 92-93

61 HR 3962, October 29, 2009, Page 94

62 Senate, HR 3590, November 18, 2009, Sec. 1513

63 Senate, HR 3590, November 18, 2009, Sec. 1201

64 Senate, HR 3590, November 18, 2009, Sec. 1513

65 Senate, HR 3590, November 18, 2009, Sec. 1301

66 Senate, HR 3590, November 18, 2009, Sec. 2711

67 Senate, HR 3590, November 18, 2009, Sec. 1302

68 Senate, HR 3590, November 18, 2009, Sec. 2713