May 2010

Health-Reform Costs Become Clearer

From CFO.com.

A few new rules and a flurry of surveys create a clearer picture of health-care costs in 2011.

Piece by piece, CFOs are getting a clearer understanding of how health-care reform will affect their costs. According to a recent survey by Mercer, 41% of companies expect to see their annual costs increase by 2% or less when the Patient Protection and Affordable Care Act's most immediate provisions — expanded dependent coverage and the end of lifetime coverage limits — take effect next year. Another 25% expect the provisions to add 3% or more to the tab, while a fortunate 3% expect no changes as a result of the required benefits enrichment. (Thirty percent are still unable to tally the additional costs.)

One component of those cost increases will come from the PPACA's mandate to extend coverage to older children of employees. New interim rules from the Departments of Health and Human Services, Labor, and the Treasury recently clarified that companies providing health insurance must offer the coverage to those age 26 and under in new plan years starting on or after September 23, 2010. They also made it apparent that implementing even one of the less controversial provisions of the bill will not be easy work.

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