Understanding health reform: fundamentals for Utah employers.

• Author: Harrison, Robert R.
• Position: Special Section Health Care

With the passage of the Patient Protection and Affordable Health Care Act of 2010, Congress enacted broad changes to the market for health insurance and created new obligations for employers. Though commonly referred to as "Health Care Reform," the legislation is primarily insurance reform; it relies on the assumption that most insurance for people not eligible for federal programs will continue to be provided by employers. There are new options for obtaining coverage; mandates for individuals to purchase coverage; and new requirements for employers to provide coverage. Understanding the changes in the health insurance market, and the new requirements imposed on employers, is essential for all Utah businesses.

NEW SOURCES FOR INSURANCE

Although employers may continue to contract directly with private insurance carriers, there are three distinct new options for individuals and employers. Health benefit exchanges create a new "virtual" market for insurance, literally existing as an internet portal where consumers may shop for plans, with standardized products and simplified application procedures. A second option allows the creation of non-profit cooperatives. The cooperatives will make their product available on the exchanges, but will operate as a nonprofit alternative to the traditional private insurers. Finally, states may elect to have a "Community Health Insurance" plan, essentially a federal minimum benefit plan offered by the Department of Health and Human Services.

HEALTH BENEFIT EXCHANGES

American Health Benefit Exchanges are essentially a public internet marketplace for health insurance coverage. Starting next year, federal grants will be available to states for the development of the exchanges. By 2014, each state must have an exchange, though the state may elect not to create the exchange, deferring instead to a federal "default" exchange implemented in that state. The exchanges are initially focused on small employers, but states may allow large employers to participate starting in 2018. The exchanges will be open to all private insurance companies who are willing to offer a qualified health plan; most of the coverage available on the exchanges is expected to be offered by private carriers. The Secretary of Health and Human Services is required to implement a procedure for the certification of the plans. Although the certification process is not yet evolved, it is clear that plans will need to provide a basic package of benefits, meet market requirements in their respective states, and insure a sufficient choice of providers for individuals who enroll in the plan.

Employers are allowed to...