The Patient Protection and Affordable Care Act, commonly referred to as Obamacare, is a landmark U.S. federal statute passed by the 111th Congress and signed into law by President Barack Obama on March 23, 2010.
The Affordable Care Act (ACA) encourages states to expand Medicaid programs so more low-income people are covered, and provides private insurance through online marketplaces called exchanges with subsidies for more affordable coverage. In addition to these reforms, the law also grants consumers numerous rights and protections.
1. Employer Mandate
Employer-sponsored health insurance is the main source of health insurance for approximately 160 million workers and their families in America, but it is not universal; many individuals do not have access to it.
One of the key provisions included in both House and Senate bills is an employer mandate, which would compel certain employers to offer coverage to their employees. Supporters of this requirement argue that it is essential for ensuring employees have affordable health coverage.
The employer mandate could make employment-based coverage more accessible to small businesses and their workers, thus stimulating economic growth. Furthermore, an employer mandate is likely more cost-effective than policies that introduce completely new institutional structures like insurance exchanges.
An employer mandate has the major benefit of being able to utilize existing resources and systems, such as federal tax law and wage reporting requirements. This makes administering this type of policy much less expensive than policies requiring the creation of new institutions or payment of additional taxes.
2. Subsidies
Individual health insurance plans offer two forms of subsidies: premium tax credits and cost-sharing reductions. The former helps cover the premium for a “Silver” plan, which has a lower sticker price than other plans.
Subsidies are calculated based on an estimate of your expected income for the year. If your earnings differ from what was estimated, subsidies could be reduced or not awarded at all.
However, if your income is relatively stable or changes over the year, it’s wise to report it throughout the year so your exchange can recalculate your subsidy for the remaining portion of the year.
Under the Affordable Care Act (ACA), households with annual incomes between 100 and 400 percent of the federal poverty level may qualify for subsidies. In states that have expanded Medicaid coverage, the lower threshold is above 138% of this level.
3. Open Enrollment
Employer-sponsored health insurance typically offers employees an annual window to enroll, change, or drop their plans. This period is known as open enrollment and it’s essential to stay abreast of deadlines during this time so your coverage meets your requirements.
Under the Affordable Care Act (ACA), insurance companies must offer plans with standard benefits like deductibles and copays. This makes it simpler for people to compare different plans and select one that meets their individual needs.
However, there is still some variation in how much people pay out-of-pocket for office visits and other services. That’s because some insurers add cost sharing reductions (CSR) to their silver plan premiums, leading to higher subsidies for those consumers.
One major change to the Affordable Care Act (ACA) is that families who had been disqualified in past years from receiving subsidies to purchase an ACA plan may now qualify. This resolves what has been referred to as “family glitch.”
4. Special Enrollment
Most employees rely on employer-sponsored health coverage as their primary source of health coverage. If an employee loses their job or moves away, they may require a special enrollment period (SEP) in order to replace their coverage.
The Affordable Care Act (ACA) mandates that large employers provide affordable health insurance. It sets minimum quality standards and premium affordability benchmarks for group plans.
Therefore, larger employers who fail to offer affordable coverage will face penalties; on the other hand, smaller employers who do provide such coverage may qualify for tax credits.
Some large and small employers are already providing more cost-effective health plans, or they have adjusted their employee coverage to meet the law’s requirements. But others are still trying to determine how best to make their coverage both more accessible and efficient.
HHS also provides a special enrollment period for people in the Medicaid coverage gap who qualify for premium subsidies based on their income. Initially, this was only an annual event; however, in February 2015 HHS finalized rules extending it to those whose earnings increase during the year to levels which make them eligible for subsidies.
