Healthcare acts signed into law

April 1, 2009

The reinvestment act contains more than $100 billion in federal funding for healthcare initiatives

The act seeks to insure more children by giving states the authority to cover children whose families have an income as high as 300% of the federal poverty level (FPL), which is about $66,000 for a family of four. The act also expands SCHIP's coverage by authorizing the expenditure of an additional $32.8 billion in federal funds and allowing legal immigrants to qualify for SCHIP. Legal immigrants were previously generally barred from Medicaid and SCHIP for five years after they entered the United States. Although the act diminishes the previous delay for legal immigrants, it does not open the program to undocumented immigrants who are still ineligible for coverage.

The recent economic stimulus legislation contains laws that significantly affect the way that COBRA is administered. It provides more than $21 billion to subsidize 65% of what an individual must pay to continue health coverage under COBRA. Subject to some exceptions, such as exceeding income threshold limits, the subsidies apply to employees involuntarily terminated between Sept. 1, 2008, and Dec. 31, 2009, who are otherwise eligible for COBRA.

Covered employees will have 60 days from receipt of the notification to elect COBRA coverage. Covered employees will have access to the COBRA subsidy for up to nine months, provided that the subsidy will terminate earlier if the covered employee becomes eligible for Medicare or another qualifying group health coverage.

HEALTH INFORMATION TECHNOLOGY

The reinvestment act also contains legislation dedicated specifically to health IT that is designed to, among many other goals, improve quality, reduce repetitive testing, and decrease medical errors. Further, the legislation requires the "utilization of an electronic health record for each person in the United States by 2014."

To assist in achieving these goals, the legislation creates and appropriates $2 billion to the Office of the National Coordinator for Health IT for overseeing health IT advancement. The legislation provides a number of incentives to eligible Medicaid and Medicare providers who are "meaningful users" of electronic health technology by a certain time. Subject to some exceptions, penalties are also provided for eligible professionals who are not "meaningful users" of electronic health technology by 2015.

This column is written for informational purposes only and should not be construed as legal advice.

Barry Senterfitt is a managing shareholder at Greenberg Traurig, LLP, Austin, Texas.

Janet Farrer is an associate at Greenberg Traurig LLP, Austin, Texas.