The Affordable Care Act
The Affordable Care Act (the ACA) is extensive healthcare reform originally passed and first implemented in 2010. Since then, the law has had dozens, if not hundreds, of amendments, making the law complex and hard to interpret correctly. We have provided you with the basic highlights of the law here on this page, however urge you to call us for more information and to insure you are in compliance.
As group health specialists who work with employers, we consider it our job to make sure your plan is ACA compliant and meeting regulatory requirements, helping you to avoid penalties with the IRS. Specifically we:
What You Need to Know – Highlights
Businesses with 50+ full time equivalent employees must offer a Minimum Essential Coverage (MEC) plan otherwise they could incur a penalty of $2,700 (in 2021) times the number of full time employees (minus the first 30 employees). A $4,060 (in 2021) penalty can also occur if an employee goes to the exchange and gets a subsidy (tax premium credit). Penalties can increase each year by the growth in insurance premiums.
Currently, most individuals are not subject to a tax penalty and are not required to purchase health insurance. The ACA “shared responsibility payment” and the individual mandate has been eliminated by the Trump Administration for 2019 and beyond. However, some states have established their own individual mandates, so you still may be subject to your specific state tax penalty, if any. Check with an DGS Benefit Expert for more information.
- No pre-existing clause. Insurance companies can no longer increase rates or deny coverage because of a pre-existing condition.
- Dependents up to age 26 may be added to an insurance policy for both individuals and employer coverage.
- Gender is no longer a factor in determining rates.
- Renewal rates are the same as new business rates.
- Waiting period should not exceed 90 days.
November 1st through December 15th
Individuals must purchase their health insurance during the annual open enrollment period. Failure to do so may result in your having no coverage for the following year and having to wait until the next year’s open enrollment to sign up for coverage. However, you may enroll in a health insurance plan outside of the annual open enrollment dates if you have a qualifying event.
You can still sign up for health insurance after the deadline if you meet any of the following qualifying events:
- change in legal marital status
- a change in the number of dependants
- a change in place of residence and the current carrier is not available
- significant cost or coverage change
- a change in coverage of a spouse or dependant
- a COBRA qualifying event
- legal judgements, decrees and orders
- entitlement to Medicare or Medicaid
For Individuals, available health plans, on and off the marketplace, contain at least 60% coverage of the “essential benefits” listed below.
And, employers may be subject to a tax penalty if they do not offer benefits to their employees that cover at least 60% of these “Essential Benefits” of the ACA (please see tax penalty above).
Specifically, to be in full compliance with the law, your insurance policy must cover at least 60% of the costs of the following essential benefits.
- Ambulatory patient services
- Emergency services
- Maternity and newborn care
- Prescription Drugs
- Mental health and Substance Abuse disorder services
- Rehabilitative and habilitative services and devices
- Pediatric services, including oral and vision care
- Preventive and wellness services, and chronic disease management
Small Business and Individuals may be eligible for a tax credit under ACA healthcare reform laws. Thus, the credit is applied as a discount on your monthly insurance premium. Accordingly, to see if you are eligible for a tax credit, please use the Subsidy Calculator provided by the Health Insurance Marketplace. Or, if you are a business, use the Small Business Tax Credit Calculator provided by the Health Insurance Marketplace. In any case, both businesses and individuals must purchase benefits through the Health Insurance Marketplace to secure their tax credit.