Affordable Care Act – What You Need To Know About Health Care Reform
Health Care Reform Key Facts
- March 23, 2010 – President Obama signed the Affordable Care Act. A central goal of the ACA is to significantly reduce the number of uninsured by providing affordable coverage options through Medicaid and new Health Insurance Marketplaces. The law requires most people to maintain a minimum level of health insurance coverage beginning in 2014.
- Oct. 1, 2013 – Health Insurance Marketplaces are open.
- Jan. 1, 2014 – Coverage begins for all new health subscribers.
Three options for health insurance in 2014
The Basics of Exchanges (Marketplaces)
As part of the Affordable Care Act starting in 2014 ALL Americans must have minimum amount of health insurance or be taxed by the government. The law also requires each state to have a health insurance exchange where people can buy health insurance coverage. People who don’t get health insurance at work, or can’t afford it, may be able to get it through the exchange. The exchanges do not replace buying health insurance privately. They are simply a new way place to shop and buy.
Four types of exchange model options
Overview of state models
Two types of Exchanges (Marketplaces) in the US:
- Public – The Health Insurance Marketplace facilitated by state and/or federal government. (Tax Credits and Subsidies available for qualified individuals.)
- Private – marketplaces facilitated by private companies. (Tax Credits and Subsidies are not available.)
Federal and State marketplaces will be accessible at: https://www.healthcare.gov
Functions of a Marketplace (Exchange)
The major functions of a Marketplace include:
- Certifying health plans to participate in a Marketplace as QHPs
- Determining individuals’ eligibility for enrollment in a QHP
- Determining individuals’ eligibility for premium tax credits and cost-sharing reductions
- Determining or assessing individuals’ eligibility for enrollment in Medicaid and/or the Children’s Health Insurance Program (CHIP)
- Facilitating individuals’ enrollment in a QHP
- Carrying out certain plan oversight functions, including monitoring QHP issuers for continuing compliance with certification requirements
- Facilitating employers’ applications and employee enrollments in coverage through SHOP
Who can use the Federal or State Health Insurance Marketplace?
- With a few exceptions, all United States citizens and lawful residents may purchase their health insurance through a Federal or State Health Insurance Marketplace.
- Tax credits to help offset the cost the purchasing coverage in a Federal or State Health Insurance Marketplace are available to eligible individuals.
- Household income must be between 100% and 400% of the federal poverty level.
- Individuals who have access to employer-provided health care are not eligible for tax credits unless the employer plan is unaffordable or does not provide minimum value.
- An employer plan is not considered affordable if the employee’s share of the premium (for employee only coverage) exceeds 9.5% of household income.
- An employer plan provides minimum value if the plan pays at least 60% of covered expenses.
- Subsidies to help offset out-of-pocket expenses may also be available for coverage purchased through a Federal or State Health Insurance Marketplace.
- Small employers can access Small Business Health Options Program (SHOP) exchanges to provide employer-sponsored coverage.
- States may allow large employers to become eligible for SHOP in 2017.
Overview of individual and small business health options program marketplaces
The key points on basic health care reforms and Marketplace-related provisions of the Affordable Care Act are:
- The primary goal of the Affordable Care Act is to help millions of Americans obtain health insurance coverage.
- To achieve that goal, the Affordable Care Act puts in place strong consumer protections to ensure most individuals have access to health insurance, regardless of their health status.
Health insurance options for individuals
People not already on a government plan have these options:
- Employer-sponsored coverage
- Individual coverage through Health Insurance Marketplace (“on exchange”)
- Individual coverage outside the Health Insurance Marketplace (“off exchange”)
- No coverage – pay the penalty
Options for current health insurance policyholders
- New policy
Guaranteed Issue and Guaranteed Renewability
Guaranteed Issue and Guaranteed Renewability The Affordable Care Act requires health insurance issuers to offer all of their individual market and group market plans to any applicant in the state. It also requires health insurance issuers to accept any individual who applies for those policies, as long as the applicant agrees to the terms and conditions of the policy, including the payment of premiums. This provision is called “guaranteed issue.”
Coverage of Pre-existing Health Conditions Regardless of Age
Effective for all health plans with plan years beginning on or after January 1, 2014, the Affordable Care Act prohibits health insurance issuers from limiting or excluding coverage related to pre-existing health conditions, regardless of the age of the covered individual.
Generally, a pre-existing condition is any health condition or illness that was present before the coverage effective date, regardless of whether medical advice or treatment was actually received or recommended.
Essential Health Benefits (EHBs)
Nongrandfathered plans for individuals on and off the Marketplace must cover:
- Outpatient services
- Emergency services
- Maternity and newborn care
- Mental health and substance use disorder services (including behavioral health treatment)
- Prescription drugs
- Rehabilitative and habilitative services/devices
- Laboratory services
- Preventive and wellness and chronic-disease management
- Pediatric services (including dental and vision)
Plans must provide “Preventive Care” at no cost
Specific details may vary by plan, but in general, you will not have to pay a copayment, co-insurance, or deductible to receive certain preventive health care, such as:
- Blood pressure, diabetes (Type 2), and cholesterol tests
- Many cancer screenings, including mammograms and colonoscopies
- Counseling on such topics as quitting smoking, losing weight, eating healthfully, treating depression and reducing alcohol usear well-baby and well-child visits, from birth to age 21
- Routine vaccinations for children against diseases such as measles, polio or meningitis
- Counseling and screenings to ensure healthy pregnancies
- Women’s wellness and pre-natal visits Flu and pneumonia shots
The Health Insurance Marketplace will offer 4 coverage levels
Low income consumers may be eligible for subsidies to assist with premium expenses and out-of-pocket expenses.
Young Adult Coverage Under ACA
Under the Affordable Care Act, health plans that cover children must make coverage available to children up to age 26. Young adults can join or remain on a parent’s plan even if they are:
- Married (coverage does not extend to married child’s spouse)
- Not living with a parent Not attending school
- Not financially dependent on a parent
- Eligible to enroll in their employer’s plan (starting in 2014)
Anthem’s Pathway Network
Anthem’s Pathway Network is a comprehensive network that meets New Hampshire’s network at the adequacy requirements for all counties and includes:
- 74% of primary care physicians
- 85% of specialists, allied, and other professional providers
- 83% of ambulatory surgery providers
- 98% of the current Ancillary network – lab, DME, ambulance, home care
- All essential community providers
- 17 of New Hampshire’s acute-care general hospitals plus 1 Massachusetts tertiary hospital
The 18 Hospitals that are in NH Pathway Network
- Androscoggin Valley Hospital, Berlin
- Catholic Medical Ctr., Manchester
- Cheshire Medical Center, Keene
- Elliot Hospital, Manchester
- Exeter Hospital, Exeter
- Mary Hitchcock Memorial Hospital, Lebanon
- New London Hospital, New London
- Speare Memorial Hospital, Plymouth
- St. Joseph’s Hospital, Nashua
- The Memorial Hospital, North Conway
- Franklin Regional Hospital, Franklin
- Hampstead Hospital, Hampstead
- Huggins Hospital, Wolfeboro
- Lakes Region General Hospital, Laconia
- Littleton Regional Hospital, Littleton
- Weeks Medical Ctr., Lancaster
- Wentworth Douglass Hospital, Dover
- Lahey Hospital and Medical Ctr., Burlington, MA
Subsidies and Credits for Individuals
Those who don’t have access to affordable, minimum essential health coverage can buy a health plan from the exchange and get a credit or subsidy if they meet income requirements. Credits and subsidies help with the cost of premiums and out-of-pocket healthcare expenses.
Income Requirements for Subsidies or Credits for Individuals
Those that meet the income level, can get a tax credit that may be applied at any level exchange plan (Bronze, Silver, Gold or Platinum).
Income requirements are 133% to 400% of the federal poverty level.
For an individual that equals $15,282-$45,960 per year in 2013.
For a family of four that equals $31,322-$94,200 per year in 2013.
Cost Sharing Subsidies
The cost-sharing subsidy is available to those who earn up to 250% of the federal poverty level and enroll in a silver exchange plan only.
For 2013, the Federal poverty guideline is an annual income of $23,550 for a family of four. Source: Health and Human Services
Definition of an affordable health plan
An affordable health plan equals individuals share of the premium is no more than 9.5% of their income.
Penalties and penalty timeline for individuals
Small group employers – less than 50 employees
Small businesses can also use exchange to find insurance for their employees. These are called small business health operations programs, or SHOPs, for short. The individual and shop exchanges may be separate or combined.
Three options for employers for health insurance in 2014
Subsidies for small employers
Tax credits will increase for employers with 25 or fewer employees with an average income wage of less than $50,000 a year who offer coverage through the an exchange.
- The credit will cover up to 50% of the employer’s costs – 35% for small nonprofit organizations.
- Employers will be eligible for credits in the first two years they offer coverage through the exchange.
- Credits decrease on a sliding scale is group size and employee wages increase
Other options for employers
Other options may exist such as defined contributions or adjusting contributions by employees. This means employers give each employee a certain amount to spend on health insurance that they find themselves.
Please Note This Thought
Health care reform does not require employers to:
- Contribute to the premium, although if they do not, the plan might be might not be affordable, putting the employer at risk for penalties.
Large group employers – 50+ employees
In 2014, large corporations are not really affected by Affordable Healthcare (ACA).
In 2015, All employees of large corporations must be covered by an affordable healthcare plan.
These plans must at a minimum cover the essential health benefits as defined by the health care reform law.
Penalties for large group of employers
- If minimum coverage is not offer for full-time employees and at least one employee gets subsidize coverage through an exchange, then a $2000 penalty is assessed for each full-time employee after the first 30 employees.
- If minimum coverage is offered to full-time employees but it is not affordable for an employee, and that employee gets subsidize coverage through an exchange than a $3000 penalty is assessed for each full-time employee getting subsidize coverage.
Changes that affect health insurance premiums
How each premium is affected
How each premium is affected
How each premium is affected
How each premium is affected
For more information…
IMPORTANT NOTE: When signing up for health insurance you must use our National Producer Number (NPN) in the section where they ask if you are being helped by a Broker /Producer. We cannot help you or service your account unless you use this number: 3357230
Disclaimer: This material is intended to provide general information about an evolving topic and does not constitute legal, tax or accounting advice regarding any specific situation. Aflac cannot anticipate all the facts that a particular employer or individual will have to consider in their benefits decision-making process. We strongly encourage readers to discuss their HCR situations with their advisors to determine the actions they need to take or to visit healthcare.gov (which may also be contacted at 1-800-318-2596) for additional information.