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Affordable Care Act - "Obamacare"

What the Affordable Care Act Means for You

The Affordable Care Act, signed into law in 2010, has gone into effect in 2014. Do you know how this legislation will impact your rights, coverage and access to care?

According to the U.S. Department of Health & Human Services, you can expect the following changes:

  • Mandates for insurance. This measure, rolled out in 2014, requires U.S. citizens and legal residents to have health coverage, and those without it may eventually face a tax penalty depending on their income level. For the first year, those without insurance will pay either $95 or 1% of their income, whichever is greater. In 2016, the tax will increase to $695 or 2.5% of income, whichever is greater. Families will be responsible for paying half of that penalty for children, with a limit. Other restrictions and limitations will apply, and subsidies to buy insurance will be available for those making a certain income.
  • Health insurance exchanges or marketplaces. A major part of the ACA establishes more networks to make insurance available to individuals. These state-based or small business-based exchanges will provide insurance options to small businesses and individuals. Programs, operated by either a non-profit or government agency, will eventually allow larger employers to participate.
  • Insurers or health plans cannot exclude an individual of any age with pre-existing conditions.
  • Guaranteed availability. Insurers cannot deny an individual who applies for coverage.
  • No annual limits on essential benefits.  
  • Rating restrictions will ensure insurance companies base premiums only off an individual’s age, geography, family size and tobacco use. Health status, claims experience or gender cannot affect plans.
  • States can merge markets.
  • Brokers will enroll individuals in state or small group health exchanges, as well as help individuals apply for necessary tax credits and cost assistance programs.
  • Through the exchanges, plans must include certain essential benefits, and deductibles will be limited to $2,000 for individuals and $4,000 for families.
  • Cost-sharing is limited to current health savings account amounts.
  • Wellness program incentives. Employers can offer employee rewards—up to 30%—for participating in a wellness program and meeting certain health standards.
  • ICD-10 requirements will be effective. This update to coding standards will better accommodate and enhance requirements related to patient privacy and electronic records.
  • Temporary reinsurance programs that pay individual care programs to cover high-risk individuals.

What the Affordable Care Act Means for Your Business

  • High income taxpayers will face an added 0.9% tax on employment wages if they have a joint return of $250,000 or more; $125,000 for a married individual filing separately; and $200,000 for others.
  • Insurance companies will be allowed to take deductions for salaries up to $500,000, compared with up to $1,000,000 for other companies.
  • Employers must make information about health exchanges available to employees, including what services are provided and contact information.
  • With more than 50 employees, employers must offer coverage that meets a two-part test: minimum value requirements, is affordable, and that doesn’t charge employees more than 9.5% of their income for premiums.
  • If these conditions are not met, employers will face penalties for not offering coverage or for not offering coverage that passes the government’s two-part test. Penalties depend on number of employees receiving a government subsidy.