On March 23, 2010, President Barack Obama signed the Affordable Care Act (ACA) into law. The ACA has made sweeping changes to the U.S. health care system and its reforms have been primarily focused on reducing the uninsured population and decreasing health care costs.
Key features of the Affordable Care Act include:
- Dependent coverage up to age 26. Group or individual health plans that cover dependent children must make coverage available for adult children up to age 26.
- No pre-existing condition exclusions. Group or individual health plans may not impose pre-existing condition exclusions on any covered individual, regardless of the individual’s age.
- No lifetime limits/restrictions on annual limits. Group or individual health insurance plans may not impose lifetime limits or unreasonable annual limits on the dollar value of essential health benefits.
- No rescissions. The ACA prohibits retroactive cancellations of coverage, except in cases of fraud or intentional misrepresentation.
- No cost sharing for preventive care services. Group or individual health insurance coverage must provide coverage for certain preventive care services without cost sharing (e.g., deductibles, copayments or coinsurance). Grandfathered plans are exempt.
- “Pay or Play.” Beginning in 2016, employers with 50-99 employees must offer affordable coverage of minimum value to their employees or be subject to penalties (“pay or play” provisions for employers with 100 or more employees began in 2015).
- Individual mandate. The Affordable Care Act requires most individuals to obtain acceptable health coverage or pay a penalty. In 2016, the penalty will increase from the higher of $325 or 2.0 percent of income to the higher of $695 or 2.5 percent of income. In 2017 and onward, the penalty will continue to be the greater of 2.5 percent of income or a flat dollar amount, but the flat dollar amount will be indexed for a cost of living adjustment.
- Health Insurance Exchanges. The ACA allows each state to have a competitive marketplace, known as an Affordable Health Insurance Exchange, for individuals and small businesses to purchase private health insurance.
Please review all Heath Care Reforms sections of our website for more information on the Affordable Care Act and how it affects employers and individuals. Please contact The Wladis Companies, Inc. with any questions about how you can prepare for any of the health care reform requirements.