As of the signing, March 23, 2010, this will likely be considered the biggest change to health insurance since ERISA in 1974. Since the whole country was watching the debate, here is my first pass. Please remember, I am not a lawyer. This is not legal advice, just a slice of information that is out there and some of my comments to help you understand how it will change your world.
The Patient Protection and Affordable Care Act

What do we see, new mandates on employers and medical service providers and private citizens. With the passing of the bill, on Sunday night, March 21, 2010, the U.S. House of Representatives passed the Patient Protection and Affordable Care Act (H.R. 3590), which had been previously approved by the Senate on December 24, 2009 (the “Reform Act”). Then on Tuesday, March 23, 2010 this law approved by both bodies has been signed into law by President Obama.

A remaining question is whether the proposed fix bill, the Health Care & Education Affordability Reconciliation Act of 2010 (H.R. 4872) (“Reconciliation Act”) also approved by the House on March 21, 2010 will be passed by the Senate.
Below is a partial summary of pertinent provisions of the Reform Act as well as the impact the Reconciliation Act.
Some changes now, some later

Some changes happen this year, but many of the Reform Act’s provisions take effect in down the road in 2013, 2014, or later years, or are gradually phased in.

Here is a short list:

A temporary national high-risk pool will go into effect within 90 days of enactment.
This includes some restrictions on insurers regarding lifetime limits, excessive waiting periods (over 90 days), rescissions, and pre-existing condition exclusions for children.

Insurance plans must pay the full cost of most preventive care.

The bill eliminated a plan’s ability to impose annual limits or lifetime limits on the dollar value of coverage.

Dependents are eligible to stay on their parents’ insurance policies until they are 26.

Effective January 1, 2011, the elimination of the ability of employers to exclude from taxation (Medicare Part D) the subsidies they receive for maintaining retiree drug coverage for their Medicare-eligible retirees.

Effective January 1, 2011, contributions to employee flexible spending accounts, (“FSA”) will be limited to $2,500 per year, down from $5,000, but will be indexed to Consumer Price Index, and reimbursements for non-prescription drugs will no longer be eligible.

Impact on Employers

Effective January 1, 2014, the Reform Act assesses a fee of $750 per full-time employee (30+ hours per week) on employers with 50 or more employees that do not offer health coverage and that have at least one full-time employee who receives a premium tax credit.

The Reform Act generally grandfathers existing individual and group health plans with respect to the new benefit standards under the Reform Act as well as the Reform Act’s requirement to provide coverage for dependent children up to age 26. The Reform Act also appears to generally grandfather existing individual and group health plans with respect to the prohibition on lifetime limits, excessive waiting periods and rescissions. Under the Reconciliation Act, the prohibition on lifetime limits, excessive waiting periods, rescissions, and dependent coverage up to age 26 would apply to Grandfathered Plans within six months of the law’s enactment.

The Reform Act requires employers with more than 200 employees to automatically enroll them into health plans unless an employee demonstrates that the employee has coverage from another source.

Effective FY 2013, employer-sponsored health plans with aggregate values that exceed $8,500 for individual coverage and $23,000 for family coverage ($9,850 and $26,000 for retirees and high-risk professionals) will have to pay an excise tax equal to 40% of the excess benefit. The tax is owed by insurers of insured plans and the employer or administrator in the case of self-insured plans. The thresholds will be indexed to the CPI. The threshold amounts will be increased by 20% in the 17 states with the highest healthcare costs, and this increase will be subsequently reduced by half each year until it is phased out in 2015. Under the Reconciliation Act, the excise tax does not take place until January 1, 2018, and the thresholds increase to $10,200 for individual coverage and $27,500 for family coverage ($11,850 and $30,950 for retirees and high-risk professionals) and may increase upward if healthcare costs unexpectedly rise prior to 2018.

Effective January 1, 2011, employers will begin being taxed on the Medicare Part D subsidies they receive for maintaining retiree drug coverage for their Medicare-eligible retirees. Because this provision requires employers to treat the subsidies as taxable income, it may be a deterrent to the continued maintenance of employer sponsored retiree drug coverage. The Reconciliation Act would delay the elimination of the tax exclusion until January 1, 2013.

Effective January 1, 2011, the Reform Act limits contributions to employee flexible spending accounts to $2,500 per year, indexed to CPI. The Reform Act also eliminates coverage of over-the-counter drugs under flexible spending accounts. The Reconciliation Act would delay the limits on employee flexible spending accounts until January 1, 2013.

Other Issues

Effective for tax years beginning after December 31, 2010, the Reform Act requires employers to report on Form W-2 the aggregate cost of health coverage received by an employee under the employer’s healthcare plan.

Pharmaceutical and Medical Device Manufacturers. Pharmaceutical companies will be subject to an industry fee starting in 2010 based on sales of brand name pharmaceuticals for government health programs. The Reconciliation Act would delay this fee to 2011. Medical device manufacturers will be subject to a percentage excise tax on medical device sales starting in 2011. The Reconciliation Act would delay this tax to 2013.

Disclosure

To ensure compliance with the requirements imposed by U.S. Treasury Regulations, we recommend that you contact your ERISA Counsel to inform you on any and all U.S. tax advice contained in this post. I was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter.