Frequently asked questions
Employer Mandate Delay
Some of the implementation reforms associated with the Affordable Care Act are delayed beyond their original dates, including the provision that requires certain employers to provide health insurance to their employees. On February 10, 2014 the U.S. Department of the Treasury and the Internal Revenue Service (IRS) issued final regulations that implement the employer responsibility provisions under the ACA.
• In 2015 employers with 100 or more employees must offer quality coverage to 70 percent of full-time workers or make an employer responsibility payment. The coverage requirement increases to 95 percent in 2016.
• Businesses with 50 to 99 full-time employees must offer quality, affordable coverage to employees by 2016 or an employer responsibility payment could apply.
• The smallest businesses, those with fewer than 50 full-time employees, are not required under the ACA to provider coverage now or in the future.
Small Business Tax Credit (effective January 1, 2010)
A tax credit that provides employers financial assistance to purchase health insurance for their employees. The first round of tax credits are for up to 35 percent of the employer’s contribution to the employee’s health insurance. There is also a credit up to 25 percent for small non-profit organizations. When Health Insurance Marketplaces are operational in 2014, tax credits will increase up to 50 percent of premiums.
Online availability (July 1, 2010)
An easy to use website was created to help consumers compare health insurance coverage options that best fits their needs. This website now exists as www.healthcare.gov
Health Care Fraud (2010)
The new law requires new screening procedures for providers to reduce fraud and waste in Medicare, Medicaid and the Children's Health Insurance Program (CHIP).
Accountability for Premium Increases (2010)
Health plans will be required to justify increases in health plan premiums to both the federal government and the relevant state government for approval.
Primary Care Incentive (2010)
The law will expand the number of primary care doctors, nurses and physician assistants by offering incentives including scholarships and loan repayment for those working in underserved areas.
Pre-existing Condition Insurance Plan (PCIP) ( July 1, 2010)
PCIP will provide Americans with pre-existing health conditions new coverage options through their state. PCIP plans vary depending on the state you reside. Some states have opted to run the programs themselves while others have allowed the Department of Health and Human Services to run theirs. Individuals must have been uninsured for 6 months or more prior to enrollment to qualify. Annual out-of-pocket cost will be capped at $5,950 for individuals and $11,900 for families. Premiums will be regulated. PCIP programs will end when Health Insurance Marketplaces are established and operational in 2014. UPDATE: Enrollment in PCIP ended in March 2013.
Continued coverage to early retirees between the ages of 55 and 65. ( June 1, 2010)
A temporary reinsurance program will be offered to provide reimbursement of expensive premiums for employers providing early retirees and their spouses, surviving spouses and dependents health benefits. This program will end on January 1, 2014. UPDATE: This program is no longer operational.
Several very significant benefits went into effect on September 23, 2010 including:
Elimination of Pre-existing Conditions for Children (September 23, 2010)
Exclusions from coverage due to a child's (under 19) pre-existing condition, regardless of diagnosis, are prohibited. This provision will apply to adults in 2014.
Extended Coverage for Dependents (September 23, 2010)
Dependent coverage will be extended, allowing a parent's plan to maintain health coverage of young adults until age 26. New or grandfathered group health plans and health insurers offering group or individual health insurance coverage that provides dependent coverage for children must make coverage available for young children up to age 26 unless the child has coverage available to them at their employment.
Insurers will be prohibited from rescinding health coverage (September 23, 2010)
Previously, insurers could search for an error or mistake on an application and use it as a basis for denial to a consumer who was recently diagnosed. Insurers are now prohibited from rescinding a policy once the enrollee is covered. Exceptions will be in the case of fraud or intentional misrepresentation. This provision applies to new and grandfathered plans.
Medicare Part D Rebate (starting June 2010)
Medicare beneficiaries who meet their Part D prescription drug coverage cap also referred to as the “donut hole” will receive a $250 reimbursement check to offset the cost of out-of-pocket prescription needs.
Annual and Lifetime Limits Regulated (September 23, 2010)
Lifetime limits on insurance coverage are eliminated and annual limits on insurance coverage will be regulated. This requirement applies to all plans. Annual limits will be prohibited beginning in 2014.
No Cost Preventive Care (September 23, 2010)
Insurers must offer coverage for preventive services and may not impose cost sharing for these services. Preventive services include mammograms, colonoscopies and immunizations. In 2011, Medicare will also provide no cost preventive services.
Appeal Coverage Determinations (September 23, 2010)
Insurers must implement an effective appeals process for coverage determinations and claims, and establish an external appeal process. At a minimum, plans and issuers must have an internal claims process in effect; provide notice to enrollees, in a culturally and linguistically appropriate manner on the internal and external appeals process as well as any available health insurance consumer assistance or ombudsman to assist them.
Medicare Part D Discount (2011)
Brand manufacturers provide 50% discount from "negotiated price" on purchases in the coverage gap beginning 2011. 75% government benefit for generics, phased in between 2011 and 2020.
No Cost Preventive Care for Seniors on Medicare (January 1, 2011)
Provides certain free preventive services, such as annual visits for seniors on Medicare.
Premium Rebate Program (January 1, 2011)
Law requires that at least 85% of all premium dollars collected by insurance companies for large employer plans are spent on health care services and health care quality improvements. Individual and small employer plans require at least 80%. Should an insurance company not meet these goals because of their administrative costs or high profits, they must provide a rebate to consumers.
Strengthening Medicare Advantage Plans while Addressing Overpayments (January 1, 2011)
Medicare pays Medicare Advantage insurance companies over $1,000 more per person on average compared to someone enrolled in traditional Medicare. This results in increased premiums for ALL Medicare beneficiaries regardless if they are enrolled in an Advantage plan or not. The law will help eliminate this discrepancy and provide bonus payments to Medicare Advantage plans that provide high quality care.
Quality and Efficiency Improvements within Medicaid, Medicare and the Children’s Health Insurance Program (CHIP) (January 1, 2011)
An emphasis on developing new methods via an innovation center that will improve the efficiency and lower the growth in costs for these programs.
The Community Care Transitions Program (January 1, 2011)
Provides help to hospitalized high-risk Medicare beneficiaries' coordination of care by connecting patients to services in their community so they can avoid unnecessary readmissions.
Access to Home and Community Based Services (October 1, 2011)
The new Community First Choice Option will allow states to offer home and community-based services to disabled individuals through Medicaid rather than institutional care in nursing homes.
Accountable Care Organizations (January 1, 2012)
Provides incentives for physicians to join together to form “Accountable Care Organizations where doctors can better coordinate patient care and improve the quality, help prevent disease and illness, and reduce unnecessary hospital admissions.
Understanding Health Disparities (March 2012)
Any ongoing or new federal health program will be mandated to collect and report racial, ethnic, and language data. The Secretary of Health and Human Services will use this data to help identify and reduce disparities.
Voluntary Long-Term Care Insurance (October 1, 2012)
The health care reform law will create a new voluntary long-term care insurance program (called CLASS) for adults who become disabled. UPDATE: On October 14, 2011, Secretary Sebelius transmitted a report and letter to Congress stating that the Department does not see a viable path forward for CLASS implementation at this time.
Hospital Value-Based Purchasing Program (VBP) ( October 1, 2012)
Offers financial incentives to hospitals to improve the quality of care.
Electronic Exchange of Health Information (October 1, 2012)
A series of changes to standardize billing. Using electronic health records will reduce paperwork and administrative burdens, cut costs, reduce medical errors and, most importantly, improve the quality of care.
Closing of the Medicare Coverage Gap Improving Coverage for Seniors and Disabled
Persons (phased between 2011-2020)
Preventive Services in Medicaid (January 1, 2013)
Funding to state Medicaid programs that cover preventive services for patients at little or no cost.
Expanding Authority to Bundle Payments (January 1, 2013)
A national pilot program to encourage hospitals, doctors and other providers to work together to improve the coordination and quality of care. In turn the hospital, doctors and providers are paid a flat rate for an episode of care rather than the current model where each service, test or procedure is billed separately to Medicare.
Increased Medicaid Payments for Primary Care Doctors (January 1, 2013)
Requires states to pay primary care physicians no less than 100% of Medicare payment rates in 2013 and 2014 for primary care services that will be fully funded by the federal government.
Medicare Part D (2013)
Begin phasing in federal subsidies for brand name prescriptions.
Launch of Health Insurance Marketplaces (October 1, 2013)
Health Insurance Marketplaces will be available in each state for users to review, research, select and enroll into insurance policies that meet their needs. All policies will begin coverage on January 1, 2014.
Continued Funding for the Children’s Health Insurance Program (October 1, 2013)
States will receive an additional two years of funding to continue the Children’s Health Insurance Program for children ineligible for Medicaid.
Flexible Spending Account Limits (2013)
Limits of $2,500 per year will be placed on contributions to flexible spending accounts (FSAs), indexed by Consumer Price Index (CPI) for subsequent years.
Medicare Pilot Program (2013)
This national pilot program encourages hospitals, doctors, and other providers to work together to improve the coordination and quality of patient care. Hospitals, doctors, and providers are paid a flat rate for an episode of care rather than the current system where each service or test is billed separately to Medicare. A claim will be "bundled" to include the entire team for the specific episode that required care.
Individual and Employer Coverage Mandates (2014)
Individual Requirements:The Affordable Care Act requires most individuals to obtain acceptable health insurance coverage or they will be subject to a penalty beginning in 2014. In 2014, the penalty is $95 per adult and $47.50 per child, with a maximum penalty of $285 per family, OR one percent of family income, whichever is greater. In 2015, the penalty is $325 per adult and $162.50 per child, with a maximum penalty of $975 per family, OR two percent of family income, whichever is greater. In 2016 and beyond, the penalty is $695 per adult and $347.50 per child, with a maximum penalty of $2,085 per family, OR 2.5 percent of family income, whichever is greater. If your income is below 150 percent of the Federal Poverty Level, you are considered unable to afford health insurance, so you will not pay a penalty if you do not obtain coverage. If you are able to purchase coverage using less than 8 percent of your annual income, you are deemed able to afford insurance coverage. In some cases, hardship waivers are available if you can afford coverage but have other pressing financial needs.
Employer Requirements for those who DO NOT offer coverage: The Affordable Care Act requires that employers with 50 or more employees who do not offer health insurance coverage to their employees pay a penalty if one employee receives a government subsidy for coverage. The penalty amount could be up to $2,000 annually for each full-time employee.
Employer Requirements for those who DO offer coverage: The Affordable Care Act requires that employers who do offer health insurance coverage but whose employees receive tax credits pay a fine of $3,000 for each worker receiving this tax credit. Employers will be required to report to the federal government employees who opt out of coverage.
Health Insurance Marketplaces (2014)
The Affordable Care Act requires that Health Insurance Marketplaces be established in each state. Individuals and small employers will be able to enroll in health insurance plans through the Marketplace. Small employers are defined as those with no more than 50 employees. Larger employers will be able to enroll through the Marketplace in 2017.
Expansion of Medicaid (January 1, 2014)
For those states that choose to expand Medicaid within their state, Medicaid eligibility will expand to 133% of the Federal Poverty Level offering those unable to afford health care coverage an option through Medicaid. Currently, state Medicaid programs range greatly and many do not offer coverage for childless adults. States will receive 100% federal funding for the first three years to support this expanded coverage, transitioning to 90% percent federal funding in subsequent years.
Increasing the Small Business Tax Credit (January 2014)
Second phase of the small business tax credit will be implemented for small business and small non-profit organizations. In this phase, the credit is up to 50% of the employer's contribution to provide health insurance for employees. There is a 35% credit for small non-profits.
Premium Insurance Tax Credits (January 2014)
Individuals with income between 100%-400% of the Federal Poverty Level will be eligible for tax credits to make it easier to afford insurance. The tax credit is advanceable, so it can lower your premium payment each month, rather than making you wait until tax time. It is also refundable, so even moderate-income families can receive the full benefit of the credit. They may also qualify for reduced cost-sharing such as co-payments, co-insurance and deductibles.
Premium Subsidies (2014)
Premium and cost-sharing subsidies will make health insurance more affordable for those with an annual income between 133% and 250% of the Federal Poverty Level and who purchase insurance coverage through their state's marketplace.
Clinical Trial Coverage (January 1, 2014)
Insurers must provide coverage to an individual who chooses to participate in a clinical trial. The insurer is prohibited from dropping or limiting coverage if an individual chooses to enroll.
Eliminating Annual Limits (January 1, 2014)
Prohibits new plans and existing group plans from imposing annual dollar limits on the amount of coverage an individual may receive for care.
Elimination of Pre-Existing Condition Exclusions (January 1, 2014)
Prohibits insurance companies from refusing to sell or renew health insurance policies because of an individual’s pre-existing health condition. It also eliminates the ability for an insurer to charge higher premium rates due to gender or health condition.
High-Cost Plan Exercise Fee (Effective January 1, 2018)
A 40% excise tax will be imposed on insurance companies that provide high-cost plans, as a means to encourage them to make premiums affordable. High cost plans are defined as having premiums over $10,200 for individual coverage and $27,500 for family coverage.