On November 7, the House of Representatives passed H.R.3962, the Affordable Health Care for America Act, by a vote of 220-215. The bill now move to the Senate, where the majority leader, Senator Harry Reid (D-NV), on November 18 introduced an $848 billion plan. The following elements addressed in the legislation would directly affect colleges and universities:
Employer mandates. Almost all colleges and universities already provide health insurance to their employees. Under the House bill, all employers, except for certain small businesses, must either provide health insurance to their employees or make a contribution (8 percent of payroll) to help cover costs of employees who seek coverage through the exchange that will be set up. Employers offering coverage would have to contribute at least 72.5 percent of the premium for workers and 65 percent for families, and a proportional amount for part-time employees.
Insurance reforms. Insurance rating based on health status or pre-existing conditions would be prohibited and age rating would be limited to 2:1. Prior to the implementation of the pre-existing condition prohibition in 2013, group plans would not be allowed to look back more than 30 days, and could not exclude pre-existing conditions from coverage for more than 3 months. Consumer protections including appeal requirements, provider network adequacy, and greater transparency would also be mandated. Employers would have a five-year grace period to bring their plans into compliance.
Coverage for young adults. The revised bill requires health plans to allow young people through age 26 to remain on their parents' policy, at their parents' choice. This provision, which would take effect January 1, 2010, would allow many traditional age students to keep their family coverage.
Excise tax on high-cost plans. The revised House bill does not include the Senate Finance Committee proposal to impose a 40 percent excise tax on the highest-cost health insurance plans. Considerable opposition to this proposal came from labor unions, which argue many workers made wage concessions in order to obtain or keep their health care coverage.
Limits on FSA contributions. The revised bill places an annual cap of $2,500 on flexible spending accounts; currently, flexible spending accounts are not capped.
Itemized deduction. A proposal to cap the value of itemized deductions at 35 percent was not included in the House bill. Instead, House leaders chose to cover some of the bill's cost through a 5.4 percent surtax on taxpayers earning in excess of $500,000 annually (households earning more than $1 million annually).
Public long-term care insurance. The revised bill creates a long-term care insurance program to provide benefits to adults who become functionally disabled. It would be financed by voluntary payroll deductions. The measure provides a cash benefit to help individuals with community-based services.