March 23, 2012 marked the second year anniversary of the passage of the Patient Protection and Affordable Care Act (PPACA) also known as the Affordable Care Act. This week the Supreme Court is hearing testimony both for and against the requirement that US Citizens purchase medical insurance if they are not provided the coverage by their employer; or pay a tax penalty. We won’t know the outcome until June.
Insurance Coverage for Children
What portions of the PPACA been passed and are in effect right now? You can now cover your dependent children up to age 26. They do not have to be a full time student. They can be married; they can live at home or independently. If they do not have coverage, they can remain on your plan. Children under the age of 19 cannot be denied coverage fro a pre-existing health condition. This was not the case before PPACA.
Say Good-bye to Lifetime Maximums
Policies can no longer have a lifetime maximum. Preventative benefits for polices that are not grandfathered must be covered at 100%. (A plan is considered grandfathered that was in place as March 23, 2010. Making changes to the plan generally results in the plan losing its grandfathered status.) There is a list of preventative services that have been established by Health and Human Services that are covered at 100%. Birth Control is to be added to the list as of August 2012.
The federal government has established The Pre-Existing Health Insurance Plan or (PCIP). Individuals who do not qualify for polices due to pre-existing conditions and who have been without insurance for 6 months or more, or who have a policy that excludes their pre-existing condition are eligible for the plan. This will help millions of women who are now considered ineligible due to pre-existing conditions.
Tax Credit for Small Business
The Small Business Health Care Tax Credit provides a tax credit for employers who have less than 25 full time employees who provide health insurance for their employees, and the employees average wages are less than $50,000. Business owners and their family members are not eligible for the credit.
Expanding Medicaid Coverage
What’s on the Horizon? In 2014 the act expands Medicaid eligibility for individuals with lower incomes up to 138% of the Federal Poverty Level ($15,028 for a single person and $30,843 for a family of four.) The Federal government would pick up the increase from 2014-2016, but the states would have to pick up 5% of the cost in 2017 and 10% starting in 2020. States that are struggling to balance a budget now are concerned about the cost of expansion.
Small employers, those with less than 50 employees will be able to purchase benefits through an exchange or a Small Business Health Options Program (SHOP) Exchange. The Exchange will allow employers to purchase insurance for their employees. Exchanges must offer 4 plans: Bronze, Silver, Gold and Platinum benefit plans. The plans will be community rated with no more than a 3 to 1 differential between the lowest and highest price, based upon a person’s age.
Pre-Existing health conditions will be covered, and an insurance company will not be able to base their rates on any factor other than age and smoker status. Smokers can be charged up to 50% more than non-smokers. Subsides will be available to employees who have a household income of less than 400% of the Federal Poverty Level. (Employers will also be able to purchase plan outside of the insurance exchange, but he subsidy will only be available via the exchange.)
There most likely will be an Individual Exchange for individuals not eligible for Medicaid to purchase insurance. The states can combine the individual exchanges with the small business exchanges. The benefits would be similar in an Individual Exchange, but they may be priced differently (but still subject to the 3-1 rate differential and smoking status rate up) from the SHOP and they may be offered by different insurance providers. Large employers, those with more than 50 full-time employees will be required to provide insurance benefits for their employees or face a penalty if any of their workers get through the exchange and receive a tax credit. The first 30 workers are exempt from the tax. There are many other provision in the law not addressed here. It is unknown what will change in the information provided above, based upon the outcome of the Supreme Court ruling due in June. So stay tuned…..I know I will!