Stunning everyone, health care reform legislation rose, Lazarus-like, from the dead. RIABiz ran a version of this utlitarian post around Christmas time — back before Scott Brown was elected in Massachusetts and reform seemed a relative shoo-in. We have updated it to reflect changes in the “fix” legislation.

First, the high-level takeaways:

The legislation pays for extending coverage to the uninsured with $409.2 billion in additional taxes by 2019, according to an analysis by the congressional Joint Committee on Taxation. Of that total, according to Deloitte Tax, $86.8 billion over 10 years will raised from an additional Medicare tax hike that will affect higher-income taxpayers. Health care companies are also paying significant new taxes.

New taxes on high-income earners are taking effect soon — in 2013, but most mandates and penalties don’t begin until 2014. Many RIAs are small businesses, but few if any will be eligible for tax credits because the credits are aimed at the smallest businesses and those with low-income workers.

Many observers expect premiums to rise in the short term in response to the legislation because of a tax imposed on health insurers, though that is not a given.

Depending on existing regulations in their states and the composition of an RIA’s workforce, RIAs may benefit or be harmed by new insurance regulations that prevent insurance companies from using age or health condition to set premiums. Such measures – called community rating – tend to increase average costs but help people who are older or have pre-existing conditions.

Some kinds of insurance may not qualify as “creditable coverage” either in the open market or in the new insurance exchanges. Details are sketchy, but high-deductible plans coupled with health savings accounts are particularly at risk of being disqualified.

RIAs already feeling oppressed by regulatory paperwork will not be pleased to hear that they will need to show the federal government what they are doing – or not doing – when it comes to offering health insurance.

Below are key provisions in the reform legislation.

Now, some of the details

1. The legislation increases the Medicare payroll tax on individuals with incomes over $200,000 and couples over $250,000 starting in 2013. Starting in 2013, the legislation also would apply Medicare taxes to investment income in those households. Starting in 2011, the legislation puts greater limits on the deductions you can take for health care spending. The legislation also taxes high-cost employer-sponsored health plans starting in 2018.
2. Tax Credits: Beginning in 2010, credits worth up to half the cost of insurance premiums will be available on a sliding scale to small businesses with fewer than 25 employees and average annual wages of less than $50,000. The full credit will be available to employers with 10 or fewer employees and average annual wages of less than $25,000.
3. Grandfathering: Employers that currently offer coverage are permitted to continue doing so under the grandfathering policy, though there’s no guarantee that insurers will offer the same policies at the same prices.
4. Mandates and Penalties: Employers with more than 200 employees must automatically enroll new full-time employees in coverage.
5. Any employer with more than 50 full-time employees that does not offer coverage and has at least one full-time employee receiving a premium assistance tax credit will make a payment of $750 per full-time employee. The reconciliation bill would increase the penalty to $2,000 for each full time worker in the company, but would exempt the first 30 employees while calculating the penalty.
6. An employer with more than 50 employees that offers coverage that is deemed unaffordable or does not meet the standard for minimum essential coverage will pay the lesser of $3,000 for each of those employees receiving a credit or $750 for each of their full-time employees total.
7. Exchanges: By 2014, each state will establish an Exchange to help individuals and small employers obtain coverage. Plans participating in the Exchanges will be accredited for quality, will present their benefit options in a standardized manner for easy comparison, and will use one, simple enrollment form.
8. Minimum Benefits for Plans in the Exchange: A qualified health plan, to be offered through the new American Health Benefit Exchange, must provide essential health benefits which include cost sharing limits. Deductibles in the small group market cannot exceed $2,000 for an individual and $4,000 for a family. Coverage will be offered at four levels with actuarial values defining how much the insurer pays: Platinum – 90%; Gold – 80%; Silver – 70%; and Bronze – 60%.

Sources:The Patient Protection and Affordable Care Act as Passed; Deloitte Tax; Bloomberg News; NFIB; New York Times