Now that President Obama has been reelected, it appears the Patient Protection and Affordable Care Act, better known as Obamacare, is here to stay. And as annual open enrollment periods get underway at many companies, both employees and employers face changes in health insurance coverage and requirements over the next two years.
In Massachusetts, implementation of the federal health care law could be more complex and confusing because of the state’s own universal health care law. While the laws are similar — Obamacare is based on the Massachusetts system adopted under former governor Mitt Romney — they have conflicting provisions. How those conflicts might be resolved remains unclear.
“The Massachusetts law and the federal law don’t sync up,” said Ellen Kaplan, who owns Group Health Specialists in Framingham, which helps small companies with their health insurance plans. “And who’s going to trump whom? Nobody knows.”
Many of the requirements that will be put in place through 2014 will primarily affect employers. But workers will also see changes affecting how they choose and pay for health insurance.
Among the changes that employees are starting to see now and into next year: a limit on contributions to flexible spending accounts, a more detailed explanation of health care benefits, and a payroll tax increase of about 1 percent on wages above $200,000 a year ($250,000 for couples filing jointly) to help fund Medicare.
Flexible spending accounts are a way to save for medical expenses without paying taxes on that money. Previously, there was no federal cap on the amount of tax-free money employees could put aside to cover health care costs, although employers could impose a limit.
The new federal law caps tax-free contributions at $2,500 a year in order to generate additional taxes to help pay for universal health care.