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Health Care Reform


30 Day Free Client Portal TrialSigned into law in March 2010, the Affordable Care Act (ACA) is the most sweeping health care legislation passed by Congress since the adoption of Medicare in the 1960s. The precise impact of the ACA will continue to be shaped by new rules and guidance developed by the federal agencies in support of the law.

Some provisions of the ACA, including insurance market reforms, such as increased access for dependents and the prohibition of lifetime limits on coverage, have already impacted health care benefits for many.  Other provisions, such as requiring all Americans to obtain health care coverage and the establishment of insurance exchanges, will not take effect until 2014 and beyond.

At HRBC, we are committed to complying with health care law and to helping you understand its impact. The information throughout this site on health care reform is provided for informational purposes only and should not be construed as, or relied upon, as legal or any other advice.  Employer Groups should consult with their own legal counsel for a comprehensive explanation of the rules and the proper application of these rules to their particular situation.

Wellness Programs and Health Care Reform

The Affordable Care Act includes a number of provisions designed to promote wellness programs. Wellness programs are intended to improve and promote health and fitness. The programs are usually offered through the workplace, although insurance plans can offer them directly to their enrollees. The new law promotes wellness programs through premium incentives and state programs that reward people and employer groups for participating in these programs, as well as small business grants that encourage employers to offer these programs in the workplace.

Choice of Provider

The ACA provides that if a group health plan, or a health insurance issuer offering group or individual health insurance coverage, requires or provides for designation of a participating primary care provider (PCP), then the plan or issuer must permit the designation of any participating primary care provider (or any participating pediatrician for child member if plan requires designation of PCP for child) who is available to accept a participant, beneficiary, or enrollee.

In addition, plans and issuers that provide coverage for obstetrical or gynecological (OB/GYN) care, and that require the designation of a participating primary care provider, must allow direct access to an OB/GYN provided by a participating health care professional.

Health Care Reform Individual Mandate

Beginning in 2014, the Affordable Care Act includes a mandate for most individuals to have health insurance or potentially pay a penalty for noncompliance. Individuals will be required to maintain minimum essential coverage for themselves and their dependents. Some individuals will be exempt from the mandate or the penalty, while others may be given financial assistance to help them pay for the cost of health insurance.

What type of coverage satisfies the individual mandate?

“Minimum essential coverage”

What is minimum essential coverage?

Minimum essential coverage is defined as:
•Coverage under certain government-sponsored plans
•Employer-sponsored plans, with respect to any employee
•Plans in the individual market,
•Grandfathered health plans; and
•Any other health benefits coverage, such as a state health benefits risk pool, as
recognized by the HHS Secretary.  Minimum essential coverage does not include health insurance coverage consisting of excepted benefits, such as dental-only coverage.

How does “Minimum Essential Coverage” differ from “Essential Health Benefits”?

Essential health benefits are required to be offered by certain plans starting in 2014 as a component of the essential health benefit package.  They are also the benefits that are subject to the annual and lifetime dollar limit requirements.

This is different than minimum essential coverage, which refers to the coverage needed to avoid the individual mandate penalty.  Coverage does not have to include essential benefits to be minimum essential coverage.

Penalty for noncompliance

The penalty is the greater of:
•For 2014, $95 per uninsured person or 1 percent of household income over the filing threshold,
•For 2015, $325 per uninsured person or 2 percent of household income over the filing threshold, and
•For 2016 and beyond, $695 per uninsured person or 2.5 percent of household income over the filing threshold.

There is a family cap on the flat dollar amount (but not the percentage of income test) of 300 percent, and the overall penalty is capped at the national average premium of a bronze level plan purchases through an exchange.  For individuals under 18 years old, the applicable per person penalty is one-half of the amounts listed above.

Beginning in 2017, the penalties will be increased by the cost-of-living adjustment.

Who will be exempt from the mandate?

Individuals who have a religious exemption, those not lawfully present in the United States, and incarcerated individuals are exempt from the minimum essential coverage requirement.

Are there other exceptions to when the penalty may apply?

Yes.  A penalty will not be assessed on individuals who:

  1. Cannot afford coverage based on formulas contained in the law,
  2. Have income below the federal income tax filing threshold,
  3. Are members of Indian Tribes,
  4. Were uninsured for short coverage gaps of less than three months;
  5. Have received a hardship waiver from the Secretary, or are residing outside of the United States, or are bona fide residents of any possession of the United States.