The Affordable Care Act (ACA) is a series of reforms intended to expand access to affordable health insurance policies while safeguarding consumers against abusive insurance company practices and prohibit insurers from denying coverage due to past-due premium payments.
In 2021, the Supreme Court upheld and extended the ACA through the Inflation Reduction Act which extended marketplace premium subsidies by three years.
The ACA is still in effect
The Affordable Care Act (ACA) introduces significant reforms to federal programs and tax policies that impact health insurance coverage, affordability and access. Furthermore, its implementation will have major ramifications on financing of healthcare delivery as well as its operation through Medicare.
Under the Affordable Care Act (ACA), private insurers are mandated to cover preventive services without charging a copay for cancer screenings, cholesterol checks and annual checkups – without this provision, millions would pay out-of-pocket for them.
Many states have implemented their own versions of the Affordable Care Act, such as expanding Medicaid eligibility and creating special enrollment periods, which has helped reduce uninsured rates; however, millions still remain uninsured due to high poverty rates in communities affected by temporary pandemic measures that will soon expire.
The Affordable Care Act has introduced many other important changes, such as eliminating the individual mandate penalty and making insurance easier to acquire for individuals. Furthermore, low-income Americans now find marketplace plans more cost effective.
The individual mandate is still in effect
The Affordable Care Act’s individual mandate, commonly referred to as the shared responsibility provision, required most Americans to have qualifying health insurance coverage or face a penalty when filing their taxes. This provision was later eliminated in the Tax Cuts and Jobs Act of 2017.
While the federal individual mandate is no longer in effect, some states still require residents to have qualifying health coverage; California, New Jersey, Rhode Island and Vermont among them. Furthermore, under ACA laws insurers cannot deny coverage due to preexisting conditions.
To qualify as qualifying health coverage, a plan must either come from an employer, government-sponsored plan or be purchased through exchanges. Furthermore, the plan must be affordable and provide essential benefits; additionally, the Affordable Care Act prohibits insurers from raising premiums too quickly in order to protect enrollee health and promote enrollment through individual mandate.
The employer mandate is still in effect
The Affordable Care Act (ACA) includes many essential provisions that remain in force today, such as its employer mandate requiring large employers to provide health insurance for their employees. This law stipulates penalties against employers who fail to abide by its provisions.
The employer mandate is intended to encourage large employers to provide comprehensive and affordable healthcare coverage for their employees by imposing financial penalties against those that do not offer enough coverage.
To determine whether an employee’s premiums are affordable, the IRS uses a percentage of household income. In 2022, this percentage is 9.61% – down from 9.83% in 2021 – which will have an impactful result in terms of how much an hourly worker must contribute toward their employer plan in order to be considered affordable by law. Employer mandate regulations also impact this calculation such as minimum value requirements and reporting.
The subsidies are still in effect
Millions of people purchase health insurance through marketplace/exchanges each year and benefit from premium subsidies to help pay for it. These subsidies depend on the price of benchmark plans in their area; should it become more costly over the year ahead, subsidy amounts will increase accordingly while decrease if it becomes cheaper; hence why consumers are advised to shop around during open enrollment each year.
In March 2021, Congress enacted the American Rescue Plan Act (ARP), which enhanced Affordable Care Act subsidies. Without further action taken before 2022’s end date, these enhancements would have returned to their pre-2021 structure and rules, potentially leaving millions of working-age adults unable to afford health coverage without access. Luckily, The Inflation Reduction Act extended these enhancements through 2025 ensuring affordability.