The Affordable Care Act (ACA) of 2010 makes it easier for many Americans to get health insurance. It also expands the services and procedures that health plans need to cover. For many people, the ACA means that your health plan will provide free preventive care. Or, if you need to buy individual coverage, you’ll be able to shop and compare plans through a centralized “Health Insurance Exchange.”
The law covers such a wide range of issues that it’s hard to understand just what it will mean for you. So, we’ve put together the basics that you’ll need to know about how the law will affect your coverage, your health plan options and your costs.
When Did the Law Start?
Most of the ACA’s reforms and consumer protections took effect as of January 1, 2014. For some requirements, the federal government extended the deadline. For example, employers with 100 or more employees had to offer health insurance coverage to their employees beginning January 1, 2015, or they would incur a penalty. However, medium-size employers (50 to 99 employees) will have until January 1, 2016, to comply with the requirement that they offer health coverage to their workers, or pay a penalty.
What Coverage Do I Need to Have?
Everyone must have “minimum essential coverage” or pay a penalty. Health coverage provided by your employer, an individual plan that you buy, and public insurance like Medicaid all count as minimum essential coverage. If you can’t afford coverage, you may be eligible for financial help.
Why is there a penalty for not having insurance?
When you are uninsured and cannot pay for healthcare services, others indirectly have to foot the bill. 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.
How much is the penalty?
If you don’t have coverage in 2015, you will have to pay a penalty that is the higher of the following amounts:
(1) 2% of your yearly household income, or
(2) $325 per person for the year ($162.50 per child under 18 years of age).
And of course, in addition to the penalty, you will still have to pay all of your own medical costs.
You can see examples of minimum essential coverage and learn more about the penalty fee and maximum penalties by visiting: https://www.healthcare.gov/fees-exemptions/fee-for-not-being-covered/
How Do I Get Coverage? The Health Insurance Exchanges (Marketplaces)
What are Health Insurance Exchanges?
As of October 1, 2013, you can buy a health plan using a “Health Insurance Exchange” or “Health Insurance Marketplace.” Think of the Exchange as a centralized website where you can shop and compare different plans. Keep in mind that if you already have minimum essential coverage through your employer, a family member or another plan, you’re all set - you won’t need to use an Exchange.
How Do I Find an Exchange?
Exchanges will be run by some states, the federal government, and in some cases, states in partnership with the federal government. If you live in a state that is running its own Exchange, you will use that one. If your state will not have its own Exchange, or if it will offer one in partnership with the federal government, you can use the federal Exchange.
You can find out if your state will run its own Exchange, and locate its website at: https://www.healthcare.gov/marketplace-in-your-state/ (scroll to the bottom of the page to find your state). The federal Exchange will be available at www.healthcare.gov.
When Can I Enroll?
You can sign up for a health plan on the Exchange during an “open enrollment” period. Open enrollment for 2016 coverage starts November 1, 2015 and ends January 31, 2016. 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 for 2016 unless you qualify for a “Special Enrollment Period.” Learn more about Special Enrollment Periods here.
If you want your coverage to begin on January 1, 2016, you must sign up by December 15, 2015. If you enroll on December 16, 2015 or afterwards, your coverage will begin on the 1st of the next month as long as you sign up by the 15th of the month.
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 on the Exchange needs to meet these requirements:
Essential Health Benefits
Qualified health plans must offer a core set of benefits. These include coverage for behavioral health services, emergency services, maternity and newborn care and preventive/wellness services.
As of January 1, 2014, all health plans, even those that are not sold on an Exchange, must cover essential health benefits. A full list of essential health benefits is available at https://www.healthcare.gov/glossary/essential-health-benefits/.
Coverage for Preventive Care
Taking care of our health is often the best way to reduce our health risks – and our health costs. One of the most important things we can do is get regular preventive care, like immunizations and cancer screenings. Some health plans already cover a range of preventive services at no cost to you – even if you haven’t met your deductible, or usually have co-pays for other services. All health plans on the Exchange will cover certain preventive services at no cost.
New health plans created after the ACA was signed on March 23, 2010, or plans that have changed their coverage since then, are already required to cover preventive services for free. Older plans that have stayed the same since the law was signed are considered “grandfathered.” These plans don’t have to cover preventive services for free. If you aren’t sure if you have a grandfathered health plan, review your plan documents, check with your employer or contact your plan. Learn more about grandfathered plans here.
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. Monthly premium payments are higher for Platinum and Gold plans than for Silver and Bronze plans, but they also offer lower deductibles, co-insurance and co-pays. A catastrophic plan is a special type of plan for people under 30 and those with “hardship exemptions.” They typically have lower monthly premiums but cover your medical costs only after you’ve used a lot of medical care. 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 – the big difference will be how much you pay.
What If I Can’t Afford a 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, the employer generally pays a portion of the premium and you pay the rest, usually through regular deductions from your paycheck.
If you buy 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 whether you’re eligible on your own. When you submit your application, it will automatically be sent 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. Your income and family size also affect your eligibility for financial help.
You can learn more about tax credits by visiting https://www.healthcare.gov/glossary/premium-tax-credit/. The Kaiser Family Foundation offers a helpful subsidy marketplace calculator at http://kff.org/interactive/subsidy-calculator/ that you can use to see what type of assistance you may qualify for.
Medicaid and CHIP
Under the ACA, many states will be expanding Medicaid eligibility to more people. If you live in one of them, and your income is less than 138% of the federal poverty level (currently $33,534 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 https://www.healthcare.gov/medicaid-chip/childrens-health-insurance-program. http://www.healthcare.gov/are-my-children-eligible-for-chip/.
Your Action Plan: Get Your Affordable Care Act Together
If you won’t have health coverage by January 1, 2016 and you don’t want to pay a penalty fee for being uninsured, start thinking about buying coverage through an Exchange.
If your state does not have an Exchange, you can use the federal Exchange at www.healthcare.gov .
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!