The Patient Protection and Affordable Care Act (PPACA) or ObamaCare is the Health Care reform signed March 23, 2010 by President Barack Obama. The law requires all Americans to have health insurance by 2014 or pay a per month fee for each month without coverage. The primary goal of the Affordable Care Act is to help millions of Americans obtain health insurance coverage.
ObamaCare doesn’t change the way insurance is obtained, you can still buy private insurance, get employer based insurance, or get insurance through a government program. You can also purchase insurance through the new Marketplaces that offer subsidized health insurance plans.
The law is comprised of 2 parts: the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act. To read the full-text of the law visit the links provided below.
Some of the provisions that comprise the Bill include:
- There can be no discrimination based on gender.
- Insurance companies cannot take away coverage from sick people.
- Americans cannot be denied coverage based off of pre-existing conditions.
- All Americans will have an option to purchase or be provided with health care based off their income and employment.
- Small businesses may receive tax credits for providing their workers with insurance.
The Tax Penalty
If someone can afford health insurance and decides not to have coverage in 2014, they may have to pay a fee also known as Tax Penalty. The penalty can be any of the options explained below (whichever is higher):
- 1% of your yearly household income.
- $95 per person for the year ($47.50 per child under 18).
This fee increases every year.
*If you’re uninsured for less than 3 months, you don’t have a make a payment.
Minimum Essential Coverage
To avoid the fee you need insurance that qualifies as Minimum Essential Coverage.
You’re considered covered and don’t have to pay a penalty if you have any of the following:
- A Marketplace plan.
- An individual insurance plan.
- Any employer plan with or without “grandfathered” status.
- The Children’s Health Insurance Program (CHIP).
- Veteran health care programs.
- Peace Corps Volunteer plans.
If you have “only” any of these types of coverage, you may have to pay the fee:
- Vision care or dental care.
- Workers’ compensation.
- Coverage only for a specific disease or condition.
- Plans that offer only discounts on medical services.
Other plans may also qualify. If you have questions call 1-800-318-2596, TTY: 1-855-889-4325.
Some people are exempted from the fee.
- People whose health coverage may cost more than 8% of their household income.
- People with incomes too low for filing taxes.
- People with religious exemptions.
- Undocumented immigrants.
- People who are incarcerated.
- Members of Native American tribes.
Other important things to know:
- Exclusions for pre-existing conditions for children under age 19 have been removed.
- Children may continue coverage on their parents’ plan until age 26.
- Lifetime limits have been removed from all new health plans.
- No out of pocket cost for Preventative Care.
- You may now request reconsideration of payment of a denied claim.
- Insurers must publicly disclose justification for big increases in premium.
- Affordable Care Act: To see, please click here
- Reconciliation Act: To see, please click here
Q. What is the shared responsibility fee?
A.The individual mandate is officially called a “shared responsibility fee,” which is part of the individual shared responsibility provision. The provision states that: “The federal government, state governments, insurers, employers and individuals are given shared responsibility to reform and improve the availability, quality and affordability of health insurance coverage in the United States. Starting in 2014, the individual shared responsibility provision calls for each individual to have minimum essential health coverage (known as minimum essential coverage) for each month, qualify for an exemption, or make a payment when filing his or her federal income tax return.”
Q. How does the Tax Penalty work?
A. The tax penalty or shared responsibility fee for not having insurance is paid on your taxes at the end of the year. If your taxable income is below 133% of the FPL you are exempt from this tax. The fee for 2014 is $95 per person per year or 1% of your Income. This fee increases every year. In 2015, for example, it will be $325 per person per year or 2% of your Income. The penalty is based on modified adjusted gross income and is pro-rated for the number of months you are without health insurance. There is no penalty for a single gap in coverage of less than 3 months in a year.
Q. How do know if the coverage for my employees is affordable?
A. Under The Affordable Care Act, if an employee’s share of the premium costs for employee-only coverage (not the entire family) is more than 9.5% of their yearly household income, the coverage is not considered affordable. Since you normally won’t know your employee’s household income, you can generally avoid a Shared Responsibility Payment for an employee if the employee’s share of the premium for employee-only coverage doesn’t exceed 9.5% of their wages for that year as reported on the employee’s W-2 form.
Q. What if I have a grandfathered health insurance plan?
A. If you are covered by a plan that existed March 23, 2010, your plan may be “grandfathered.” There are 2 types of grandfathered plans: job-based plans and individual plans. The individual plans are the kind you buy yourself, not through an employer. To know if your plan is “grandfathered” check your plan’s materials or check with your employer or health plan’s benefits administrator. Insurers must notify consumers that they have a grandfathered plan. You can also look for the insurance company‘s contact information and talk to them directly. Some of the consumer protections under ObamaCare apply to grandfathered plans and some do not. You can check your new options in your state’s Marketplace.
Q. What are my birth-control benefits?
A. Plans in the Health Insurance Marketplace must cover contraceptive methods and counseling for women. All Food and Drug Administration-approved contraceptive methods such as barrier methods, hormonal methods (birth control pills and vaginal rings), implanted devices (like intrauterine devices), emergency contraception and sterilization procedures are covered. The plans must cover the services without charging a copayment, coinsurance, or a deductible when they are provided by an in-network provider.