Health care reform brings many changes for people and businesses. Freedom Benefits is here for you and we want to help you learn how reform will affect you and answer your questions. Our goal is to give you the latest information from the insurance companies to the government and each entity in between.

Am I buying insurance from the government?

The Affordable Care Act is based on more people buying health insurance from private insurance companies — not from the government. The government’s role includes making sure these private plans meet standards for coverage and service, providing financial assistance for people who need it to buy insurance, broadening eligibility for public insurance programs in some states, and encouraging efforts to improve quality and control costs.

What is an exchange?

The law requires a new Health Insurance Marketplace, also known as a Health Insurance Exchange, be established in every state beginning January 1, 2014. They will be a new way for individuals andsmall businesses to purchase health insurance. They will be run by state, federal or combined governments.

Exchanges will offer individuals standard health plans at five levels of coverage ranging from 60 percent to 100 percent of covered costs: bronze – at least 60%, silver – at least 70%, gold – at least 80%, platinum – at least 90%, and catastrophic – 100%. This program will help make health insurance more affordable for those eligible for a Federal Premium Subsidy (financial assistance).

What is a Marketplace?

The PPACA has a provision which requires the establishment of a Health Insurance Exchange in every state beginning January 1, 2014. In spring of 2013 the Department of Health and Human Services (HHS) started calling this program the Health Insurance Marketplace. While each state may have a different name for their state-based Marketplace, the federally run is called the Health Insurance Marketplace.

In a general sense, Health Insurance Exchange and Health Insurance Marketplace are one in the same.

What is the Employee Notice of Coverage Options, also known as the Employee Notice of the Exchange?

All employers subject to the Fair Labor Standards Act (which includes most employers) are required to notify all employees by October 1, 2013 of availability of the new Health Insurance Marketplace (also known as the Exchange) to purchase health insurance.

What is the Federal Premium Assistance Tax Credit?

Beginning in 2014, a Federal Premium Assistance Tax Credit is available to eligible individuals to subsidize the cost of insurance coverage purchased through a state exchange. In order to be eligible, the individual’s household income must be between 100 percent and 400 percent of the federal poverty level, and the individual must either:

Not be offered minimum essential coverage by an employer, or

Be offered minimum essential coverage, but the coverage is (i) unaffordable (i.e., the cost of coverage exceeds 9.5 percent of the employees household income), or (ii) does not provide the required minimum actuarial value (the plan’s share of the total allowed costs of benefits is less than 60 percent).

Current estimates indicate that 19 million people who secure healthcare coverage through a state insurance exchange are likely to be eligible for the subsidy.

What are grandfathered plans?

Any plan (insured or self-insured) in effect on March 23, 2010, the date the Patient Protection and Affordable Care Act (PPACA) became law, is treated as a grandfathered plan. Plans established after PPACA cannot be grandfathered.

The advantage of being grandfathered is that these plans do not have to follow some health insurance reform provisions, such as the requirement to cover all preventive care services with no cost-sharing, for as long as they remain grandfathered.

The Departments of Health & Human Services, Labor, and Treasury developed rules for maintaining grandfathered status. The rules identify the types of benefit reductions or employer contribution reductions that will trigger a loss of a plan’s grandfather status. A change of insurance carriers, TPAs or switching funding type (insured to self-insured or vice versa) does not affect a plan’s grandfather status.

For a group health plan to decide to stay grandfathered, the plan must weigh the financial result of following health reform rules against being able to make cost-effective benefit plan changes.

Insured collectively bargained plans are subject to a special grandfathering rule. They do not have to follow any PPACA health insurance reforms until the last of the collective bargaining agreements under the plan in effect on March 23, 2010 ends. At this point, the PPACA’s other grandfathered rules would apply.

My mom got turned down for insurance because of her diabetes. Will she be able to get covered under the new law?

In the past, insurance companies were able to decline or offer adjusted rates to individuals based on certain medical conditions. Beginning in January 2014, anyone who buys a new plan or renews their current plan will be guaranteed issue. This means that they’ll be able to get insurance that includes coverage for their medical conditions. (If a plan is purchased or renewed before January, 2014 they will not be guaranteed issue.)

Who qualifies for the small business subsidy?

Under the PPACA small business subsidies are provided to businesses that employ the equivalent of 25 or fewer full-time employees (excluding the owner) with average annual compensation below $50,000 per employee.

For tax years 2010 through 2013, the maximum credit for a for-profit business is 35 percent of the employer’s cost of health insurance, if the employer provides more than 50 percent of employee premium expenses. The credit is claimed on the employer’s annual income tax return. If the small business is a not-for-profit, the maximum subsidy is 25 percent. The Internal Revenue Service will provide further information on how tax-exempt employers claim the credit.

Subsidies will increase in 2014 to 50 percent of the for-profit employer’s cost of health insurance and 35 percent for the not-for-profit businesses. The subsidies will phase by 2014 for firms having 10 to 25 full-time workers, or the equivalent, with average wages between $25,000 and $50,000.

What are the 2012-2016 definitions of “small employer?”

For most purposes, PPACA defines “small employer” as an employer employing 1-100 employees, but the rules allow states to use their own definition until 2016. Up until 2016, most states define small employer as 2-50. In 2016, the standard definition of “small employer” automatically becomes 1-100. This could represent a significant change for a group with 85 lives, for example. Until 2016, they’re considered a “large” employer group and if their group health plan is insured, the insurer is not required to provide coverage for essential health benefits. But, starting in 2016, the employer will be considered a small employer, and if it insures its coverage, the carrier will be required to cover all essential health benefits – which may impact their premium rates.

Will my rates be adjusted if I smoke?

Tobacco use is a reason why health insurance providers can adjust your rates. Other reasons include: where you live, the size of your family and your age. This applies only to individual plans and small groups plans unless large group coverage is offered through the Health Insurance Marketplace.

What if I can’t afford health insurance?

You can expect to see more choices in health plans in 2014 that may allow you to find coverage that meets your needs and stays within your budget. You also may be able to get a new kind of tax credit that lowers your monthly premium. Depending on your situation, you may even be eligible for a $0 premium plan. You can see what your premium, deductibles and out-of-pocket costs will be before you make a decision to enroll. In some states, if you cannot afford health insurance and you meet certain requirements, you will not be required to pay a penalty.

If I am unemployed and don’t have coverage for a few months during a year, will I have to pay this penalty?

No. According to a proposed rule from the U.S. Department of Health & Human Services (HHS), short gaps in coverage won’t trigger the coverage requirement. In other words, if you are temporarily unemployed, you won’t be fined for losing your health coverage between jobs.

To see if you qualify for a subsidy click the link below