Since the average dentist has fewer than 50 employees, they will not be subject to the Affordable Care Act's (ACA) employer mandates, which begin in 2014. However, as of January 2014, the law requires that everyone in the U.S. must have or purchase health insurance, and insurance exchanges will begin to operate in every state, according to CDA lobbyist Allison Barnett.
"Everyone will be touched by this bill one way or another, and I want to be sure you are aware of any potential obligations as an employer and an individual," she told a packed room during her presentation, "National Health Care Reform: How Will It Affect Your Practice?"
“The new law will be more of a burden on employers.”
— Neil Crosby, California Association of
Since more than 90% of dental benefits coverage is provided by standalone plans, dental coverage will be included in the exchanges. Such plans must offer pediatric dental benefits, and there are no cost-sharing requirements, Barnett said.
Most individuals are expected to move to state insurance exchanges unless they are eligible for government coverage because coverage subsidies are only available in exchanges, according to Barnett. Health plans and standalone dental plans participating in state-operated exchanges will be required to provide oral health coverage for children younger than age 21, but they will not be required to offer dental coverage to adults, she noted.
About 20 million U.S. households will qualify for subsidized insurance, and the average subsidy will probably be $6,000. The federal subsidy will go straight to the insurer and will look like a discount on the policy to patients, according to Barnett.
Positives and negatives
Some aspects, such as small business tax credits, are already in place and can be claimed for tax year 2010. Employers with fewer than 25 full-time employees can claim 25% of the amount of insurance premiums they pay for employees. This applies to businesses with workers with average incomes of less than $50,000, according to Barnett.
In addition, full tax credits are available to businesses with fewer than 10 employees who earn an average of less than $25,000.
However, as of 2013, over-the-counter medications are not eligible for reimbursements for flexible spending accounts, health reimbursement accounts, or health savings accounts without a doctor's prescription. Also, the annual limits on contributions to these accounts decreased from $3,000 to $2,500. This means patients will have less money to use for dental services from these accounts.
And beginning October 1, insurers in some states -- such as California -- will no longer offer "grandfathered" plans (plans that existed before March 23, 2010, when the law took effect). However, significant changes to such plans will make them subject to the new requirements, Barnett noted.
More money available
Another positive aspect of the ACA is that it makes more money available for grants and loan repayment, according to Barnett.
For dentists who participate in state public health programs, the states will receive a 23% increase in federal matching funds for the Children's Health Insurance Program starting in 2014. The states will also be required to maintain eligibility levels for the program.
The ACA also makes available grants for studies that demonstrate the effectiveness of caries management, according to Barnett. The ACA also requires that all states receive grants for school-based dental sealant programs.
Grants will be available for loan repayment programs for dental faculty and geriatric education training centers that focus on chronic care management and long-term care.
Also, funding for the National Health Service Corps loan repayments has been increased, and dentists who work at free clinics will get extended medical liability protection under the ACA, Barnett noted.
New and/or increased taxes
Under the ACA, most dentists will be subject to increases in the Medicare hospital insurance tax and a new tax on unearned income. The hospital tax will go up 0.9% on earnings more than $200,000 for individuals and $250,000 for couples, which makes it applicable to most dentists, Barnett noted. In addition, the new unearned income tax will be 3.8% for these higher income tax payors, which includes most dentists; it begins January 2013.
And starting in 2013, medical devices will have a 2.3% sales tax, which would apply to dentists when they purchase such devices.
New reporting requirements
In a second presentation at the CDA meeting, Neil Crosby, vice president of public affairs for the California Association of Health Underwriters, discussed a number of new reporting requirements included in the healthcare reform law that affect small businesses.
For example, W-2 forms must now show how much employers pay for their employees benefits. This takes effect in 2013 but covers the tax year 2012. And for employers with more than 50 employees, new and extensive reports will be required showing the lowest and highest cost of the plans that are selected by employees.
"The new law will be more of a burden on employers," Crosby said. "A whole bunch of new reporting will be required."
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