Your Rights

The Affordable Care Act

Summary

The Affordable Care Act (ACA) of 2010 is a federal law that went into full effect in 2014. It’s made it easier and more affordable for many Americans to get health insurance. It also expanded the services and procedures that health plans need to cover. For many people, the ACA means that their health plan provides free preventive care, as well as many other important benefits. If you need to buy individual or family coverage, you can shop and compare plans through a centralized “Health Insurance Exchange.”

We’ve put together the basics that you need to know about how the law affects your coverage, your health plan options and your costs.

What Coverage Do I Need to Have?

Under the ACA, everyone must be enrolled in a health plan that offers “minimum essential coverage.” Health coverage provided by your employer, an individual plan that you buy and public insurance like Medicaid all may count as minimum essential coverage. If you can’t afford coverage, you may be eligible for financial help.

Is there a penalty for not having insurance?

When you are uninsured and cannot pay for healthcare services, others indirectly have to pay the bill. When more people—both sick and healthy—are enrolled in insurance, and pay their premium amount, there are more funds available to pay for healthcare when enrollees become sick. The ACA is intended to encourage as many people as possible to have coverage in order to spread the risk among a large group and minimize costs for everyone.

The ACA includes an “individual mandate” that requires most people to have qualifying health insurance. However, in 2017, Congress eliminated the ACA’s cash penalty associated with not having health insurance. Although individuals are still technically required to have health insurance, there are no longer any federal tax penalties for not having it. But if you’re uninsured, you’ll still have to pay all of your own medical costs.

Some states have enacted their own individual mandates, requiring residents to have qualifying health coverage or pay a fee with their state taxes. If you live in such a state and you don’t have coverage or an exemption, you’ll be charged a fee. This fee will be added to your state taxes, not your federal taxes.

How Do I Get Coverage?  The Health Insurance Exchanges (Marketplaces)

What are Health Insurance Exchanges?

You can pay to enroll in a health plan using a “Health Insurance Exchange,” also known as a “Health Insurance Marketplace.” Think of the Exchange as a website where you can shop and compare different plans all in one place. Keep in mind that if you already have minimum essential coverage through your employer, a family member’s coverage or another plan, you’re all set—you won’t need to use an Exchange.

How Do I Find an Exchange?

Exchanges are run by the federal government and some states, and in certain cases, states in partnership with the federal government. If you live in a state that has an Exchange, you’ll use that one. If your state does not have its own Exchange, or if it offers one in partnership with the federal government, you can use the federal Exchange.

You can find out if your state has its own Exchange, and locate its website (scroll to the bottom of the page to find your state). The federal Exchange is available at https://www.healthcare.gov/.

When Can I Enroll?

You can sign up for a health plan on an Exchange during an annual open enrollment period.

Typically, the open enrollment period starts in November and ends January of the following year. You can enroll online, by phone or in person. If you don’t enroll by the end of open enrollment period, you can’t enroll in a health insurance plan unless you qualify for a special enrollment period.

Before the open enrollment period starts, you can start learning about your health coverage options by visiting finder.healthcare.gov.

 

What Do the Exchange Plans Provide?

Each Exchange sells “qualified health plans”—plans that meet a minimum level of coverage and cost-sharing. Every plan offered through an Exchange needs to meet these requirements:

  • Essential Health Benefits. Qualified health plans must offer certain core benefits. These include coverage for behavioral health services, emergency services, maternity and newborn care and preventive/wellness services.
  • Coverage for Preventive Care. Actively taking care of your health can help you avoid health risks and reduce costs. One of the most important things to do is get regular preventive care, like immunizations and screenings. Check with your provider to find out which ones are appropriate for you and your family. All health plans offered through an Exchange—and many others—cover certain preventive services at no cost; you don’t even have to pay deductibles or copays. Learn more about covered preventive care.
  • Levels of Cost-Sharing. Most plans require cost-sharing: you pay for a portion of your care, and your insurer covers the rest. Qualified health plans are grouped into five categories of cost-sharing: Platinum, Gold, Silver, Bronze and Catastrophic. Your monthly premium payments are higher for Platinum and Gold plans than for Silver and Bronze plans, but those higher-premium plans require lower deductibles, coinsurance and copays. A catastrophic plan is a special type of plan for people under 30 and those with “hardship” or affordability exemptions. These plans typically have lower monthly premiums but cover your medical costs only after you’ve used a lot of medical care—such as care associated with serious illnesses and injuries. On your Exchange website, you will be able to compare all of these costs and see what type of plan works best for you.

Remember, all plans will cover, at a minimum, the same essential benefits, like preventive care—the big difference will be how much you must pay.

 

What If I Can’t Afford a Health Plan?

When you enroll in a health plan, you generally pay a premium to your health insurance company for health coverage. When you get health insurance through an employer, your employer generally pays a portion of the premium and you pay the rest, usually through deductions from your paycheck.

If you enroll in a plan through an Exchange, you will pay the cost yourself. But-you may qualify for financial help, and you won’t have to figure out on your own whether you’re eligible for that assistance. When you submit your application, it will be sent automatically to the right place to determine what kind of financial help, if any, you can receive.

Premium Tax Credit

Based on the information you include on your Exchange application, you may qualify for a premium tax credit to help you pay the plan premium. You may be eligible for a credit if you are under age 65 and are not eligible for employer coverage, Medicaid or Medicare, or if your employer offers coverage but it is not affordable for you. Your income and family size also affect your eligibility for financial help.

You can learn more about tax credits by visiting the healthcare.gov glossary. The Kaiser Family Foundation offers a Health Insurance Marketplace Calculator that you can use to see what type of assistance you may qualify for.

The American Rescue Plan, part of the March 2021 stimulus bill passed by Congress, has broadened the subsidies available under the ACA. In 2021 and 2022, financial help will be available to more people and in higher amounts for those who already receive it. These new subsidies were made available on April 1, 2021, and are retroactive to January 1, meaning that if you’ve already enrolled in the ACA, you may get money back.

However, the new subsidies won’t be applied automatically for everyone. If you’re already enrolled in the ACA, you can update your application and enrollment to receive new eligibility results, to lower your premiums for the rest of the year. You can also claim the subsidies as a tax refund when filing your 2021 tax return next year.

Medicaid and CHIP

Under the ACA, many states have expanded Medicaid eligibility to more people. If you live in one of those states, and your income is less than 138 percent of the federal poverty level (currently $36,570 for a family of four), you will be able to enroll in Medicaid using the federal Exchange at www.healthcare.gov.

The Children’s Health Insurance Program (CHIP) offers low cost health insurance coverage for children as well as for some parents and pregnant women. You can find more information about CHIP by visiting:

Your Action Plan: Get Your Affordable Care Act Together

If you don’t have health coverage, start thinking about buying coverage through an Exchange.  


 

Being in the know about the ACA can help you make smart decisions and get the coverage that’s right for you and your family!

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