Healthcare Reforms Kick Into Gear

The Patient Protection and Affordable Care Act President Obama signed on March 23, 2010, set in motion a wide range of healthcare reforms. Although many of its more sweeping changes won't be fully activated until 2014, several key elements already went live, effective September 23, 2010.

If you have employer-provided health insurance that runs on a calendar year, this means those new features will finally kick in on January 1, 2011. If you have individual coverage, you may have already seen the changes; but if your plan's fiscal year starts later, you may have to wait awhile longer.

Here are a few noteworthy changes:

Extended child coverage. If your medical plan offers dependent coverage, your children may now remain on – or return to – your plan until their 26th birthdays, regardless of where they live, or their dependent, income or marriage status. You will be responsible for paying the additional premium at the plan's already established family or per-child rate.

One notable exception: If your plan is "grandfathered" (i.e., already existed on March 23, 2010), the carrier has the right, until 2014, to deny such coverage if your child has other employer-sponsored coverage. However, plans lose their grandfathered status if they significantly cut benefits or increase out-of-pocket expenses.

Pre-existing conditions for children. Medical plans can no longer deny coverage to children under age 19 because of preexisting health conditions, unless you have an individually purchased, grandfathered plan. The same provision will go into effect for adults in 2014.

Some insurers have threatened to stop offering individual child policies altogether as a way to avoid having to cover seriously ill children, so double check with your carrier.

Rescinding coverage prohibited. Plans can no longer cancel coverage if you become sick or you made minor or inadvertent mistakes on your application that only later came to light. However, deliberate fraud, such as falsely claiming a dependent, can still result in cancellation.

No more lifetime limits. Non-grandfathered plans can no longer cut off benefits when you reach a lifetime maximum. In addition, annual coverage limits for non-grandfathered plans have begun phasing out and will be completely banned starting January 1, 2014. Important note: Several companies that offer limited-benefit coverage to low-wage workers who otherwise couldn't afford coverage recently won a one-year exemption from the annual coverage limit. Ask your employer department if you're unsure about your plan.

New coverage for the uninsured. If you've been refused insurance because of preexisting medical conditions, you now may be eligible to buy coverage through a new "high-risk pool" program. Although it's a federal program, many states have chosen to run their own plans, with widely varying costs and benefits. A few details:

• You must be a U.S. citizen or legal resident.
• You must have been without health insurance for at least six months before you can apply.
• You must have a qualifying preexisting condition and show proof that an insurance company has denied or excluded coverage because of it.

These are only a few of the many healthcare changes unfolding over the next few years. To learn more, visit the Government's HealthCare.gov website.