The Affordable Care Act – A Cheat Sheet

The primary goal of the Affordable Care Act (ACA)  is to help millions of Americans obtain health insurance coverage.

To achieve that goal, the Affordable Care Act provides new coverage options, gives consumers the tools they need to make informed choices about their health care coverage, and puts in place strong consumer protections.

Here is a quick glance at some of the key facts:

You must have Health Insurance or pay a penalty

If you do not have health insurance (specifically, a Qualified Health Plan, or QHP) you will pay a penalty, which will be taken from your tax refund or added as additional tax on your return. The penalty for 2014 was the greater of $95 or 1% of household income reported on the previous year’s tax statement. In 2015, the penalty was $325 per person or 2% of your yearly household income, and in 2016, it is $695 per person or 2.5% of your yearly household income. As time goes on it will continue to be adjusted for inflation.

We encourage you to contact a SASid representative to help you understand the ACA, to see if your existing plan qualifies, to access a new QHP, or to see if your family qualifies for a subsidy provided by the ACA.  We can even estimate your potential tax penalty and see if options other than major medical coverage might make the most financial sense for you.

There are two big ACA insurance changes that will impact you.

The Affordable Care Act includes many provisions aimed at making health insurance coverage more accessible and affordable. Key components of the Affordable Care Act that will affect you are:

    • Health law changes
    • Major consumer protections

Let’s discuss these components one at a time:

1. Health Law Changes in the Affordable Care Act

The health law changes include:

    • Creation of Public Marketplaces (Exchanges):    A marketplace is a mechanism for organizing health insurance options to help consumers shop for coverage in a way that permits easy comparison of available plan options based on price, benefits and services, and quality.  Through these exchanges, individuals who do not have access to public assistance programs or affordable employer-sponsored coverage may compare and purchase plans. Some individuals will be eligible for financial assistance through premium tax credits (subsidies) and/or cost-sharing reductions. REALTORS® Insurance Marketplace provides access to both private and public exchanges so that NAR members can explore their options.
    • Expansion of Medicaid in some states will cover individuals under age 65 whose household incomes are less than 138% of the Federal Poverty Level (FPL).  The 2014 Federal Poverty Level can be found here (click here).  Through the REALTORS® Insurance Marketplace NAR members can see if they may qualify for a state Medicaid program.  If you qualify for Medicaid we will provide you with information on how to take advantage of this coverage.
    • Penalty Mandate: a requirement that requires individuals to maintain minimum essential coverage, qualify for an exemption from coverage, or make a payment when filing their federal income tax returns.  Through the REALTORS® Insurance Marketplace members can get an estimate of the penalty for not acquiring a qualified health plan.

2.   Major Consumer Protections in the Affordable Care Act

The Affordable Care Act includes many provisions designed to help ensure that consumers have access to effective health care coverage, and to limit their costs. Key provisions to understand include:

    • Extension of health insurance coverage to children and young adults up to age 26
    • Expansion of the “guaranteed issue” requirement to ensure that health insurance issuers offer group and individual market policies to any eligible individual in a state, regardless of health status
    • Prohibition on charging consumers a higher premium based on health status or gender (only an additional surcharge can be added for smokers)
    • Elimination of annual and lifetime coverage limits
    • Prohibition on coverage limitations or exclusions based on pre-existing conditions
    • Prohibition on precluding a qualified individual’s participation in an approved clinical trial, or discriminating against that individual based on such participation
    • Introduction of an 80/20 MLR (Minimum Loss Rule) rule to ensure that at least 80 percent of the premium dollars paid to a health insurance issuer are spent on providing health care

Let’s discuss a few of these.

Young Adult Coverage

Under the Affordable Care Act, health plans that cover children must make coverage available up to age 26. Young adults can join or remain on a parent’s plan even if they are:

    • Married (coverage does not extend to married child’s spouse)
    • Not living with a parent
    • Not attending school
    • Not financially dependent on a parent
    • Eligible to enroll in their employer’s plan

Guaranteed Issue and Guaranteed Renewability

The Affordable Care Act requires health insurance issuers to offer all of their individual market and group market plans to any applicant in the state. It also requires health insurance issuers to accept any individual who applies for those policies, as long as the applicant agrees to the terms and conditions of the policy, including the payment of premiums. This provision is called “guaranteed issue.”

Coverage offered through and outside the Marketplaces may restrict guaranteed issue coverage to certain enrollment periods (you can only apply during open enrollment or special enrollment).

Additionally, the Affordable Care Act requires health insurance issuers to offer to renew or continue in force coverage at the option of the policyholder. This is called “guaranteed renewability.”

Coverage of Pre-existing Health Conditions Regardless of Age

The Affordable Care Act prohibits health insurance issuers from limiting or excluding coverage related to pre-existing health conditions, regardless of the age of the covered individual.

Generally, a pre-existing condition is any health condition or illness that was present before the coverage effective date, regardless of whether medical advice or treatment was actually received or recommended.

Nondiscrimination Regarding Clinical Trial Participation

The Affordable Care Act prohibits health insurance issuers from:

    • Precluding participation of qualified individuals in an approved clinical trial
    • Denying, limiting, or placing additional conditions on the coverage of routine patient costs for items and services furnished in connection with participation in an approved clinical trial
    • Discriminating against qualified individuals on the basis of their participation in an approved clinical trial