What Health Care Reform Means For You
November 20, 2013
The Patient Protection and Affordable Care Act (PPACA, or ACA) is a federal law that was passed in March 2010 in order to give more people access to affordable health care coverage and medical care.
Many of the most consequential provisions of the ACA will take effect beginning in 2014, with far-reaching consequences for consumers, state officials, employers and health care providers. Most of us will be impacted by the ACA in some way, either by changes to our employer-sponsored or privately purchased health plan, or because of the requirement for individuals without coverage to purchase it or pay a fine.
You need to find out how your existing coverage (if any) will be affected, or if you will be required to purchase coverage on your own.
New Consumer-Friendly Provisions
The following new coverage provisions have already been implemented. They were designed to give consumers a favorable impression of health care reform before the full law takes effect.
- Some Preventive Services Are Now Covered With No Out-Of-Pocket Costs.
- Health Plans Cannot Cancel Your Coverage Once You Get Sick.
- Children With Pre-Existing Conditions Cannot Be Denied Coverage. This Will Apply To Adults After 2014.
- Insurers Are Required To Provide Rebates To Consumers If They Spend Less Than 80% – 85% Of Premium Dollars On Medical Care. This Provision Is Designed To Reduce The Amount That Insurers Spend On Administrative Costs In An Effort To Keep Premiums Down.
The Individual Mandate
The so-called individual mandate provision of the ACA requires that beginning in 2014, individuals must have health insurance or pay a fine. You can satisfy this provision with private insurance obtained on your own or through your job, or through government programs including Medicare and Medicade.
If you have health care coverage from your employer you most likely will continue to do so, particularly if you work for a large employer. Your employer might make changes to your plan design, and you can get those details from your employer.
If you work for a small employer, other changes may be coming and your employer should keep you informed. Some small employers are opting to no longer offer coverage to their employees.
If you do not get health insurance through your employer, you must purchase an individual health plan or pay a penalty. The penalty for individuals who do not obtain qualified health insurance in 2014 starts at $95 per year or up to 1% of income, whichever is greater. The penalty will rise to $695 per year or 2.5% of income by 2016.
Individuals who do not get health insurance from their employer but cannot afford to buy their own coverage may qualify for Medicaid.
Health Insurance Exchanges
If you do not qualify for Medicaid but still can’t afford health insurance, you might be eligible for government subsidies to pay for private insurance sold in the health insurance marketplace or state insurance exchanges. The exchanges are the federal and state-run health insurance marketplaces where you can shop, compare and buy health care coverage.
The exchanges opened on October 1, 2013, with coverage available for effective dates of January 1, 2014 and after. Premium subsidies are available for individuals and families with incomes between 133% and 400% of the poverty level, or $14,856 to $44,680 for individuals, and $30,656 to $92,200 for a family of four.
Some health insurance exchanges will be run by the states, while the federal government will run others.
There is no need to go it alone. Watkins Insurance Group can help you navigate through the process of buying insurance on the exchange, or we can help you find a plan from a private insurance company that is not offered on the exchange. We can help you decide whether or not buying coverage on the exchange is appropriate for you, and which plans will best suit your needs.
The Employer Mandate
Beginning in 2015, businesses with 50 or more employees that don’t provide health care coverage and have at least one full-time worker who receives subsidized coverage in the health insurance exchange will have to pay a fee of $2,000 per full-time employee (the first 30 workers are excluded from the fee). This is commonly referred to as the employer mandate.
The employer mandate was recently delayed by one year—it was originally set to take effect in 2014. The delay has consequences for other parts of the law. For example, employers will now not need to comply with certain reporting requirements of the ACA until 2015. But those reporting requirements were designed to make it possible for the federal government to determine if individuals are eligible for tax credits or subsidies when purchasing coverage on a government-run exchange. Without the information provided by employers, eligibility for subsidies and tax credits will be determined by a self-reported “honor system.”
Employers also face a slew of new regulations and requirements for the plans they offer to employees.
It is important to learn all you can about health care reform and how it will affect you, your family and your business. And now is the time to act. Will your employer continue to provide coverage, or will you need to purchase coverage on your own? Will you be getting health care coverage for the first time?
The independent agents at Watkins Insurance Group have the experience and expertise to help you get through the maze of new information, find appropriate plans, and make the right decision. Call us today!