Health Insurance Benefits/Affordable Care Act

What is commonly referred to as the Affordable Care Act, or sometimes as Obamacare, is actually two bills signed into law by President Obama in March of 2010. These bills are the Patient Protection and Affordable Care Act (PPACA) and the Health Care and Education Reconciliation Act of 2010. Collectively they are sometimes referred to as the healthcare reform plan.

The ACA includes many provisions in the two very lengthy bills. Most importantly for workers, starting on January 1, 2014, the bill expanded Medicaid eligibility to “all low-income, non-elderly and non-disabled individuals including employed adults and working families–all people with income below $29,000 for a family of four (133% of poverty).”

It also prevented denial of coverage based on pre-existing conditions, created incentives for businesses to provide their own health care benefits (as well as mandating that some businesses do so), required most individuals to obtain health insurance coverage (exempting low-income individuals and several other groups, and subsidized private insurance company premiums.

Although many businesses are required to offer insurance to their employees, businesses with fewer than 50 full-time equivalent employees are exempt from this requirement. If you work for a small business with fewer than 50 full-time equivalent employees, your employer is not required to offer you insurance. However, you will still face the individual mandate to obtain health insurance and will therefore need to obtain insurance elsewhere.

The ACA mandates that an employer with 50 or more full-time workers offer and substantially pay for affordable and minimum value health insurance coverage. That minimum value of coverage must be made available to 95% of full-time employees and their children under the age of 26.

Under this mandate, full-time includes employees working 30 or more hours per week. Minimum value means that the plan pays for at least 60% of the costs of covered services. A plan is considered affordable when its annual cost it falls below 9.56% of your annual income. Failure to do so will subject the employer to penalties of up to $2320 per full-time employee who is left uninsured or insufficiently insured.

Businesses with more than 50 full-time equivalent employees are required to offer, and substantially pay for, health insurance for their employees. If the business fails to do so, it faces fees of up to $2390 per full-time employee who is uninsured.

Under the ACA employers are required to offer subsidized insurance to their employees if they employ 50 or more people. For every employee that is not offered subsidized insurance, the employer will face a $2000 fine. Furthermore, the government will be offering tax incentives to employers who do offer insurance to their employees.

Employers do not have to pay for the entire insurance premium, but are required to offer a subsidized insurance plan affordable to their employees. Tax incentives will be offered to employers who pay for at least 50% of the insurance plan, which means it is likely that your employer will pay at least some portion of the premium.

There is an individual mandate that requires people to get health insurance, either through the government-offered plan, through their employer, or through a private insurer. Starting in 2014, the penalty for failing to get health care coverage is $95, or up to 1% of income, whichever is greater, on individuals who did not secure insurance in 2014. In 2016, this penalty was $695, or 2.5% of income. Today, the penalties remain the same as those of 2016. People with religious objections or people who do not meet the income level for the mandate (i.e. individuals who do not make enough money to file taxes) are exempt. States are not required to implement the individual mandate, or even the public option, so long as they offer a health care plan which meets the minimum requirements of the Act. So these requirements may vary based on your state.

Both Acts that make up the health care plan offer a “religious conscience” exception to the individual mandate. This exception applies to members of a religious sect whose tenets reject government intervention or insurance benefits. This most notably affects the Amish, who prefer no government intervention in their lives and who rely on their community for medical intervention. The text of this exception can be found at Section 501 of the PPACA Bill.

You may be eligible for the expanded Medicaid program that was implemented along with the ACA, depending on your state. In this new expansion, all low-income adults who fall below 133% of the poverty level ($16,040 for individuals and $32,319 for a family of four) are eligible for Medicaid health coverage, whether or not they have children. If you make more than 133% and less than 400% of the federal poverty level (or $16,040-48,240 for individuals and $32,319-98,400 for a family of four) but still cannot afford health coverage, health coverage will be subsidized on a sliding scale based on how much income you have. If you make less than the amount required to file taxes ($3000 per year combining income and social security benefits), then you are exempt from the individual mandate and are not required to obtain health insurance.

As of October 1, 2013, you can compare healthcare options, apply for coverage, and enroll in a plan in one application through the Health Insurance Marketplace.

You can keep your current health insurance, though it is likely that your employer will offer you a health insurance plan. Because the coverage has changed, private insurance rates are likely to change as well. The precise ways in which private insurance rates change in response to this Act are somewhat unpredictable, some rates have increased while others have decreased.

The Affordable Care Act previously imposed an individual mandate, requiring individuals to get health insurance or face penalties if a minimum coverage threshold was not met. If not covered during part or throughout the entire year, those individuals who face penalties. Penalties for inadequate coverage in the most recent years were $695, or 2.5% of the individual’s income, and $2,085 for families.

As of 2018, with the enactment of the Tax Cut and Jobs Acts of 2017, this individual mandate has been repealed. This change will not take effect until 2019 and penalties will continue to be imposed until then.

People with religious objections or people who do not meet the income level for the mandate (i.e. individuals who make less than $3000 a year in combined social security benefits and income) are exempt. However, it’s worth noting that states are not required to implement the individual mandate, or even the public option, so long as their health care meets the minimum requirements of the Act they can write their own Act. So this may vary based on the state.

As of January 1, 2014 Insurers are prohibited from denying coverage to anyone with pre-existing conditions.

The health care plan is paid for in a variety of ways. There are new taxes on the highest income brackets (approximately the top 5%, or anyone making over $200,000 per year). There are also taxes on tanning beds, pharmaceutical companies, insurance companies, which may be passed along in the form of higher costs and premiums. Also, people who decide not to participate will be taxed a penalty for deciding not to obtain health insurance unless they are exempt due to income or other reasons.

The original ACA law changes too effect on January 1, 2014. The individual coverage mandate changes will not be in effect until 2019.

The legal challenges to the Patient Protection and Affordable Care Act began in 2010 when the state of Florida sued the United States Department of Health and Human Services, challenging whether the law was constitutional. When a district court judge ruled that Congress exceeded its authority in requiring individuals to purchase health insurance, (called the “individual mandate”) , the Department of Health and Human Services appealed to the 11th Circuit Court of Appeals. The 11th Circuit agreed with the district court, ruling that the individual mandate was unconstitutional. However, unlike the district court, the 11th Circuit ruled that the individual mandate could be stricken from the health care bills, allowing the rest of the ACA to stand. The case was eventually appealed to the U.S. Supreme Court. In a 5-4 decision, the Supreme Court upheld the individual mandate of the Affordable Care Act as a legitimate use of Congress’s power to tax citizens.

Recently in King v. Burwell, the Supreme Court upheld the Affordable Care Act allowing millions of Americans to keep their tax subsidies in order to help pay for health insurance. This is the second case decided in favor of the Affordable Care Act. The opponents of the Act contended that the language in the statute relating to subsidies was ambiguous. However the Supreme Court rejected this interpretation and thought that the clause should be interpreted with the rest of the law as subsidies are available for everyone who purchased health insurance through either a state or federal government exchange. Although it is unknown whether this will be the last challenge to the Affordable Care Act, it is important to note that the Court considered the Act’s design and purpose in issuing the decision.

The public policy implications of the Affordable Care Act include reducing the number of uninsured Americans and reducing the United State’s public debts. Estimates from the Congressional Budget Office have concluded that the implementation of the Affordable Care Act can reduce the number of uninsured Americans by 30 million. Some of the biggest increases in newly insured Americans will be employees of small businesses, as small businesses will be encouraged to provide health insurance to their employees through tax credits. Much of the studies of the effects of the Affordable Care Act have focused on the effects on US debt and US Government spending. While the Congressional Budget Office (CBO) has projected that health care spending over the next decade will rise to more than $1.7 trillion dollars, the CBO has also estimated that the US debt will be decreased by $220 billion dollars over the next decade as a result of the Affordable Care Act. Much of the decrease in government debt can be attributed to taxes on high insurance premiums and changes to the tax code, Medicare and Medicaid.

One of the main coverage provisions in the ACA is the expansion of Medicaid eligibility for low-income individuals with incomes at or below 138 percent of the poverty line. However as of March 2015, 22 states had not expanded their programs, and as a result many adults may fall into a coverage gap of having income above Medicaid eligibility but below the limit for Marketplace premium tax credits. Since 2013, four states (Ohio, New Hampshire, Indiana and Pennsylvania) opted to expand their Medicaid programs allowing uninsured adults to receive ACA related assistance. Unfortunately for those who reside in states that have not expanded Medicaid, adults remaining in coverage gaps are likely to face barriers for preventative care and health services as hospitals in those states will face increased demand and limited resources.

Prior to the passage of the ACA, no federal law provided comprehensive protection against sex discrimination in health care. However, proposed rule Section 1557 in the Affordable Care Act is the first federal law to prohibit sex discrimination in health care and also implements prohibitions against discrimination based on race, color, age, and disability. The rule specifically establishes prohibition on gender discrimination including discrimination related to gender transition. The rule also includes requirements for effective communication for individuals with disabilities and language assistance for those with limited English proficiency. This rule will ensure equal access to health care to in order to advance wellness, prevention, and improved access to health care services.

The scope of this section protects individuals from discrimination by any hospitals, clinics, employers or insurance companies that receive federal funding and also extends discrimination protection to individuals in any program or activity created under the ACA, including state health insurance exchanges or any federal health program such as Medicare, Medicaid or CHIP. This rule will be enforced by The Department of Health and Human Services Office for Civil Rights (OCR) who also has jurisdiction to oversee and investigate violations and compliances for Section 1557. However, the implications of including an exemption for religious organizations are unknown as the rule would not affect the existing protections for religious beliefs and practices.