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Timeline information is courtesy of Aetna

Donut hole coverage gap in Medicare prescription benefit is fully phased out. Seniors continue to pay the standard 25 percent of their drug costs until they reach the threshold for Medicare catastrophic coverage.

New tax ("Cadillax tax") on employer-sponsored health plans that offer policies with generous coverage levels.

Health claim attachments standards for electronic transmission of health claim-related documents.
Encounter, enrollment, disenrollment, premium payment, and referral certification/authorization standards.

Coverage Mandates & Subsidies

  • New individual and employer coverage responsibilities.
  • New individual affordability tax credits and expanded small business tax credits.

Health Insurance Exchange & Insurance Reforms

  • State individual and small group health insurance exchanges operational.
  • Guaranteed issue, guaranteed renewability, modified community rating and minimum benefit standards ("essential benefits" plan) effective.
  • No more lifetime or annual dollar limits for essential benefits.
  • No more excessive waiting periods.
  • No pre-existing condition exclusions.
  • New health plan disclosure and transparency requirements.
  • New uniform insurance rating reforms.
  • Provider non-discrimination requirements.

New taxes on health Insurers

Medicaid and Medicare Reform

  • Medicaid expanded to cover low-income individuals under age 65 up to 133 percent of the federal poverty level - about $28,300 for a family of four.
  • Minimum medical loss ratio of 85 percent required for Medicare Advantage plans.

Administrative Simplification

  • Electronic Fund Transfer (EFT) standards for automated reconciliation of payment to remittance advice.
  • Claim payment/remittance standards for re-association of the claim payment with the remittance advice when health plans process electronic payments.
  • Health plan certification required by health plans for eligibility verification, claim status, electronic fund transfer and claim payment/remittance compliance.
  • Health plan identifier (HPID) and unique identification of health plans in order to facilitate routing of electronic transactions between the plan and providers.


  • Individuals making $200,000 a year or couples making $250,000 would have a higher Medicare payroll tax of 2.35 percent on earned income - up from the current 1.45 percent. A new 3.8 percent tax on unearned income, such as dividends and interest, also added.
  • Contributions to flexible spending accounts (FSAs) limited to $2,500 a year - indexed for inflation. And the threshold for deducting medical expenses on taxes goes from 7.5 percent to 10 percent of income.
  • Medical device manufacturers have a 2.9 percent sales tax on medical devices, with exemptions for some, like eyeglasses, contact lenses and hearing aids.
  • No more deduction for expenses allocable to Medicare Part D subsidy for employers who maintain prescription drug plans for their Medicare Part D-eligible retirees.

Administrative Simplification

  • Eligibility verification standards on how health plans must verify each individual’s health plan eligibility and what that person’s financial responsibility might be for specific services either prior to or at the end of service.
  • Claim status transactions outlining required timeframes by which health plans must respond to claim status inquiries from providers, including the adjudication and appeals processes.

Health System Changes

  • Hospitals, doctors, and payers encouraged to join forces in "accountable care organizations."
  • Hospitals with high rates of preventable readmissions facing reduced Medicare payments.
  • Administrative simplification rules required under ACA begin to phase in.
  • See our Changes taking place in 2012 overview.

Insurance Reforms

  • New uniform coverage documents and standard definitions developed (applicable in 2012).
  • Must meet minimum medical loss ratios.
  • Rate reviews begin.

Medical Reforms

  • Medicare Advantage cost-sharing limits take effect.
  • Medicare beneficiaries who reach the "donut hole" get a 50 percent discount on brand-name drugs.
  • Primary care doctors and general surgeons practicing in underserved areas, such as inner cities and rural communities, get a 10 percent Medicare bonus.
  • Medicare Advantage plans begin restructuring of payments and freeze 2011 payments at 2010 levels.


  • The voluntary long-term care insurance program starts. The program provides a cash benefit to help those with disabilities stay in their homes or pay nursing home costs. Benefits start five years after paying the coverage fee.
  • Increased funding for community health centers to provide care for many low-income and uninsured people.
  • Costs for over-the-counter drugs not prescribed by a doctor excluded from being reimbursed through an HSA or FSA.
  • Employers may report the value of health care benefits on employee W2 tax statements (optional for 2011 tax year; mandatory thereafter).
  • Start of new annual fees on pharmaceutical manufacturing sector.

New Programs

  • The temporary retiree reinsurance program takes effect, but specific criteria apply and funding is limited.
  • National risk pool launched, and small business tax credit.
  • Medicare members who reach the "donut hole" receive a $250 rebate.

Insurance Reforms

  • No lifetime dollar limits on essential benefits.
  • Allowed restricted yearly limits on the dollar value of certain benefits.
  • No coverage rescissions/cancellations except for fraud or intentional misrepresentation.
  • No cost-sharing obligations for preventive services in network.
  • Dependent coverage, if provided, required up to age 26.
  • Enhanced internal and external appeal processes and requirements.
  • No pre-existing condition exclusions for enrollees (under 19 years of age).