HealthCare Reform

What Does it Mean for Me?

How the Affordable Care Act (ACA) affects you varies greatly depending on your age, who you may work for and many other factors. So what does it mean for you? Below is a list of how health care reform affects a number of common categories.

The federal tax penalty for not being enrolled in health insurance was eliminated in 2019. However, there are several states that have maintained a mandate penalty for not having health insurance which includes: Massachusetts, New Jersey, District of Columbia, California and Rhode Island.

The American Rescue Plan Act (ARPA) of 2021 was the coronavirus rescue package designed to help the U.S. recover from devastating economic and health effects of the COVID 19 pandemic. The law is one of the most progressive pieces of legislation in history, and it extended eligibility for ACA health coverage to people buying their own health coverage on the Marketplace who have incomes over 400% of poverty. The law also increased the amount of financial assistance for people at lower incomes who were already eligible under ACA. Both provisions were temporary, lasting for two years, retroactive to January 1, 2021.

The Inflation Reduction Act passed by President Joe Biden in August 2022 will go on to extend subsidies for individual and families through 2025.

Elderly:

 For seniors, the Inflation Reduction Act of 2022 offers relief from high prescription drug costs by allowing Medicare to negotiate lower prices and preventing drug compnies from hiking prices in excess of inflation. Medicare seniors will experience improved affordability because the act creates a new $2000 max on annual out of pocket costs for prescriptions and caps insulin cost shares at $35 per month.

Unemployed and uninsured:

 Many individuals who are unemployed and uninsured likely qualify for Medicaid under the coverage expansion that began in 2010. The expansion of funding for community health centers, designed to offer free and reduced-cost care, will also provide relief. Certain uninsured individuals with pre-existing conditions can obtain coverage through the temporary high-risk pool as well.

Employees who do not have job-based health insurance, but earn too much income to qualify for Medicaid, can buy health insurance through the health insurance Marketplace.

There are many differences between Marketplaces, but they all share common traits. All will provide four tiers of coverage based on affordability that provide free preventive care and meet your household’s medical insurance needs, as well as exempt you from the fee.

Small-business owners: 

 Organizations with 25 or fewer workers may be eligible for a tax credit to help provide coverage for employees. The Employer Mandate of the ACA states that employers with 50 to 99 employees are mandated to provide benefits or be fined a Shared Responsibility Payment. Employers with 100 or more full-time employees have been mandated to provide benefits as well or be fined a Shared Responsibility Payment. This fee is $2,000 per full time employee.

Young adults:

Children may stay on their parents’ policies until age 26. Those who buy coverage on their own or through the Exchange can obtain cheaper catastrophic coverage. Individuals who obtain traditional benefits packages will pay less than those who are older than age 26. As part of the individual mandate, individuals age 26 or younger must obtain coverage unless qualified for an exemption.

Adults with a pre-existing condition:

 Adults with pre-existing conditions will be able to obtain individual coverage and pay the same rate as other participants in the same age group. Insurers cannot place annual or lifetime limits on coverage, nor can they deny coverage or charge higher premiums due to a pre-existing condition.

Children with a pre-existing condition:

 Group health plans and health insurance issuers may not impose exclusions on coverage for children with pre-existing conditions. This provision applies to all plans offered through the Marketplace.

Health Care Individual Mandate and Penalty

The Affordable Care Act (ACA) requires most individuals to obtain acceptable health insurance coverage for themselves and their family members. The federal tax penalty for not being enrolled in health insurance was eliminated in 2019.

 

State level health insurance penalties may still be in effect.

While there will not be penalties at the federal level anymore for going uninsured or choosing a plan that is not ACA-compliant, it is still important to look at state requirements for health insurance. A handful of states have their own health insurance penalties that are assessed when people do not have insurance that complies with that state’s laws.

Some places where a health insurance penalty is still assessed:

• New Jersey. This state has a health insurance penalty that went into effect in 2019. The health insurance penalty is based on New Jersey’s prices for bronze level health insurance policies. The mandate penalty is $695 per uninsured adult, or 2.5 percent of household income, whichever is greater. The maximum penalty is tied to the average cost of a bronze plan in New Jersey.
• Massachusetts has had a health insurance penalty since instituting a state health insurance program in 2006. In the past, they did not assess a health insurance penalty if someone paid one at the federal level. The mandate penalty is $695 per uninsured adult, or 2.5 percent of household income, whichever is greater.
• District of Columbia. This city has signed their own health insurance penalty into law. It went into effect in 2019. The mandate penalty is $695 per uninsured adult, or 2.5 percent of household income, whichever is greater. The maximum penalty is tied to the average cost of a bronze plan in DC.
• California. The state penalty will be $695 per adult or 2.5% of your adjusted gross income, whichever is greater. This is prorated for any months you have creditable coverage.
• Rhode Island. The mandate was put in place with the elimination of the federal mandate. This is an important tool in keeping Rhode Islanders covered and maintaining their access to affordable health care. The fee is calculated as either 2.5% of your yearly household income or per person ($695 per person or $347.50 per child under 18), whichever is higher. The maximum penalty can be no more than the cost of the total annual premium for an average bronze plan sold through HealthSource RI.

 

Who is Liable for a Penalty?

The penalty will be assessed against an individual for any month during which he or she does not maintain “minimum essential coverage” (unless an exemption applies). The requirement to maintain minimum essential coverage applies to individuals of all ages, including children. The State regulations provide that an individual is treated as having coverage for a month so long as he or she has coverage for any one day of that month.

Minimum essential coverage includes coverage under:

 

• A government-sponsored program, such as coverage under the Medicare or Medicaid programs, CHIP, TRICARE and certain types of Veterans health coverage;
• An eligible employer-sponsored plan (including COBRA and retiree coverage);
• A health plan purchased in the individual market; or
• A grandfathered health plan.

Minimum essential coverage does not include specialized coverage, such as coverage only for vision care or dental care, workers’ compensation, disability policies, or coverage only for a specific disease or condition. Under the ACA, minimum essential coverage also includes any additional types of coverage that are designated by HHS or when the sponsor of the coverage follows a process outlined in regulations to be recognized as minimum essential coverage.

 

Exceptions to the Individual Mandate

The ACA provides the following nine categories of individuals who are  exempt from the penalty for not maintaining minimum essential coverage:

• Individuals who cannot afford coverage (those for whom a required contribution for coverage would cost more than 8 percent of their household income);
• Taxpayers with income below the filing threshold;
• Members of certain Indian tribes;
• Individuals who are given a hardship exemption;
• Individuals who experience a gap in coverage for less than a continuous three-month period (may only be used for one period without coverage per year);
• Religious conscience objectors;
• Members of a health care sharing ministry;
• Incarcerated individuals; and
• Individuals who are not citizens, nationals or lawfully present in the United States.

Coverage Availability

Overview

The Affordable Care Act (ACA) includes provisions that prohibit discrimination by health plans against people with pre-existing conditions and provide certain protections for consumers. Effective for plan years beginning on or after January 1, 2014, ACA extends guaranteed issue protections for individuals and employers, and prohibits the use of health and other factors to set premium rates.

Guaranteed Availability of Coverage

ACA requires health insurance issuers that offer coverage in a state’s individual or group market to accept every individual and employer in the state that applies for coverage, subject to certain exceptions. These exceptions allow issuers to limit enrollment:

 

• To certain open and special enrollment periods;
• To employers with eligible individuals who live, work or reside in the service area of a network plan; and
• In certain situations involving network capacity and financial capacity.

Guaranteed Renewability of Coverage

Individuals and employers have certain protections with respect to coverage renewal. For example, these protections will prohibit issuers from refusing to renew coverage because an individual or employee becomes sick or has a pre-existing condition. Specifically, health insurance issuers offering coverage in the individual or group market for non-grandfathered plans must renew or continue in force coverage at the option of the plan sponsor or individual, with certain exceptions.

These exceptions are:

 

• Nonpayment of premiums;
• Fraud or intentional misrepresentation of material fact under the terms of coverage;
• For group coverage, the plan sponsor’s failure to comply with employer contribution or group participation rules under state law;
• The issuer ceasing to offer coverage of this type (without regard to claims experience or health status-related factor);
• For network plans, there no longer being any enrollee who lives, resides or works in the service area of the issuer or where the issuer is authorized to do business (in the case of the small group market, the employer no longer having eligible individuals who live, work or reside in the service area for the network plan).

 

Do I Qualify for a Subsidy?

 

You may be eligible for a government subsidy under the American Rescue Plan Act of 2021 and the Patient Protection and Affordable Care Act.

The American Rescue Plan Act of 2021 expanded the subsidy amounts offered under the Patient Protection and Affordable Care Act. The ARPA extends eligibility for subsidies to people buying their own health insurance on the Marketplace and have incomes over 400% of poverty. ARPA also increases the amount of financial assistance for people with lower incomes already eligible under ACA.