Healthcare Reform

  • Health Care Reform and You

    The Health Care Reform law known as the Affordable Care Act (ACA) is federal legislation passed in 2010. It represents the most significant government expansion and regulatory overhaul of the country's healthcare system since the passage of Medicare and Medicaid in 1965. Some aspects of the law took effect immediately; other requirements are phased in over a period of years. This new law is complex, multi-faceted and has an impact on both employers and individuals.

    How the new law may impact you

    Changes that took effect in 2013:

    • Banned co-pays and out-of-pocket expenses for preventative care, screenings and immunizations.
    • Family coverage may be extended to adult children up to age 26.
    • Annual coverage limits and lifetime coverage limits are prohibited on child coverage.
    • Children cannot be denied coverage due to a pre-existing condition.
    • Policyholders cannot be dropped once they become ill.
    • Pre-tax contributions to flexible spending accounts capped at $2,500 a year and can no longer be used for over-the-counter drugs without a prescription (except insulin).
       

    Changes in effect January 1, 2014:

    • Adults cannot be denied coverage due to a pre-existing condition.
    • Insurance companies are barred from basing cost on health status (for individual policies only), gender or other factors. However, they can base cost on age, tobacco use, or geographic location (and health status if it is a group policy).
    • All health plans must provide coverage that meets certain minimum standards.
    • Annual coverage limits and lifetime limits will be prohibited on all coverage. 

    “Individual Mandate” in effect January 1, 2014:

    • All U.S. citizens and legal residents required to obtain health insurance coverage for themselves and for their dependents by January 1, 2014. Failing to do so leads to a penalty.
    • The annual penalty for failure to obtain coverage is a flat dollar amount (see below) or a percentage of adjusted household income, whichever is more.
    • If you are currently not covered under any health insurance plan, you may want to consider enrolling in on our employee plan. Please ask for a copy of the Summary Plan Description and enroll within the required open enrollment period.
    • If you miss open enrollment, you will not be able to enroll again until next year (unless certain circumstances apply to you).
       
      • 2014 Penalty: $95 or 1% of adjusted household income
      • 2015 Penalty: $325 or 2% of adjusted household income
      • 2016 -2018 Penalty: $695 or 2.5% of adjusted household income
      • Family penalty on behalf of children under age 18 (half of the adult penalty)
      • Family penalty capped at 3 times the adult penalty
      • Some exceptions apply 
      • 2019:  Under the Tax Cuts and Jobs Act, passed December 22, 2017, the Individual Mandate federal penalty was reduced to zero (0) for months beginning after December 31, 2018.  For more information, please visit the IRS website: IRS ACA Publication

    The Health Insurance Marketplace (formerly known as an exchange)

    • Health Insurance Marketplace made available January 1, 2014 to provide health insurance coverage to individuals and families.
    • A government subsidy may be available to those who purchase coverage on the exchange who do not have access to other acceptable coverage. Please note: If you have access to acceptable coverage through your employer and choose to purchase your individual insurance through the Health Insurance Marketplace, you will not be eligible to receive a subsidy.
    • Acceptable coverage is an employer-offered plan that is “affordable” and meets minimum coverage requirements.

    As stated in the introduction, the law is complex and multi-faceted. It is also evolving with new guidance being issued regularly. We are following our employer responsibilities. Although not required to do so, the preceding is our best effort to summarize aspects of the law that may be important to you at this time. It is in your best interest and ultimately your responsibility to become familiar with this law.