10 Things You Need to Know About Health Reform
1. Millions of individuals and businesses will be securing insurance through an exchange starting in 2014.
An exchange is just a fancy word for a website that shows you all your benefit options in one place, compares plans side-by-side, and allows you to enroll online.
There are public (government) and private (private sector) exchanges. Exchanges should also provide education on Health Reform, how the law affects you or your business, and help you determine if you qualify for any subsidies (like discounts) or tax credits.
2. Starting January 1, 2014, there is an individual requirement to have health insurance.
You must have health insurance or pay a penalty unless you qualify for an exception. If you don't have access to an affordable job-based insurance plan or a government-sponsored plan, you can enroll in individual or family health insurance during Open Enrollment.
This year's Open Enrollment is October 1, 2013 - March 31, 2014. In 2015 and beyond, the Open Enrollment will be October 1st - December 31st.
3. If your household income is less than 400% Federal Poverty Level (about $96,000 a year for a family of four), then you will qualify for some level of tax subsidy toward the purchase of an individual health insurance plan starting in 2014.
A good way to think of a tax subsidy is a "discount" that reduces your premium or out-of-pocket expenses on things like deductibles or copays. You can only use your subsidy if you do not have access to an affordable job-based insurance plan, either through your job or your spouse/partner's job.
4. If you qualify based on family size and household income, you can apply your subsidy toward four plans offered through an exchange.
There are four plan choices: platinum, gold, silver, bronze, or catastrophic. These plans will be issued by brand-name insurance companies like BluecCross BlueShield, Humana, United Healthcare, Kaiser, and more.
These same plan options are available for private policies that are not paid subsidized by the government. So you know that if you accept a tax subsidy, you are not giving up any benefits.
5. The law divides businesses into two categories: Small and Large.
Small businesses have less than 50 full-time equivalent employees. Large businesses have 50 or more full-time equivalent employees.
A full-time equivalent employee is a true employee of your business (not 1099), generally receiving a W2, who works 30 or more hours per week and at least 120 days per year.
If you are Self-Employed (business of one), you are not considered "an employer" under the Health Reform law, and will shop for Individual and Family policies instead of business policies.
6. Large businesses are required to offer affordable health insurance to their employees or pay a penalty.
Not offering: The penalty is $2,000 per employee per year. There is a waiver on the first 30 employees.
So, for example, if you have 52 employees, you would pay zero penalty for the first 30, $2,000 penalty for the last 22 employees, or a $44,000 penalty per year. This part of the law has been delayed until 2015.
Not affordable: What the employee pays toward employee-only health insurance cannot exceed 9 1/2% of his/her Modified Adjusted Gross Income (This does not consider what he/she pays toward spouse/partner or children's coverage).
If it's not affordable and one employee qualifies for a subsidized individual plan, the business will pay a penalty of $3,000 per employee. This part of the law has been delayed until 2015.
7. Small businesses are not required to offer health insurance to their employees, but can choose to offer benefits.
Many small businesses might offer individual policies to employees instead of a business plan. That way, the group won't have to worry about participation, contribution, and on and off-boarding rules that apply to business plans. Individuals who qualify for tax subsidies to lower their premiums on private plans will be able to accept that benefit.
Or, by offering group health insurance to your employees, you might qualify for a Small Business Healthcare Tax Credit. This credit is for businesses with less than 25 employees (the highest credit to businesses with less than 10) who pay at least half of the employee premium and have an average income of less than $50,000 per year.
8. All individual and small business policies issued on or after January 1, 2014 must include a set of Essential Health Benefits - with no yearly or lifetime limits so you can never run out of insurance for core care.
Essential Health Benefits include ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health, substance abuse, and behavioral health, prescription drugs, rehabilitative and habilitative services and devices, laboratory services, preventive and wellness services and chronic disease management, and pediatric services including dental and vision care for children under the age of 19.
9. There are many changes to how individual and small business policies are issued and priced.
No health insurance company can turn you away or charge you extra premium because of health history, pre-existing conditions, how often you use your plan, gender, or profession. No, really.
All pre-existing conditions and Essential Health Benefits (including pregnancy, preventive care, and more) are covered.
Before ACA, insurance companies could charge older adults up to six times more than younger adults, But now, they can only charge three times more, making many older adults premiums lower based on age alone.
The only thing considered in your rate is age, zip code, and tobacco usage.
10. You still have the power of choice.
Choose how you enroll in on-exchange (government pays some of the premium) or off-exchange (no government subsidy) plans: a) Through public exchange (government website) b) Directly with the insurance company c) Local agent d) Private Exchange (that's us!)
Choose your plan: Whether you accept a government tax subsidy to reduce your premium or not, you'll still be shopping for the same plans: Platinum, Gold, Silver, Bronze, Catastrophic. So even if you accept a governement subsidy, you will not give up any benefits.
Consider doctor choices: You may notice a smaller doctor network on subsidies plans (goverment pays part to make your plan affordable for you). So if you have a favorite doctor, you might want to make sure they accept your plan before you enroll.