08/21/2013
10 things you should know about the Affordable Care Act before 2014
The Affordable Care Act (ACA) was signed into law on March 23, 2010, with the intention of decreasing the barriers for obtaining health coverage. This list, while not inclusive of all the changes required by law, provides a snapshot of the important mandates that may impact you in 2014. Note: if you start to get confused go directly to #10.
1. Open enrollment
An open enrollment period has been established as an opportunity for individuals and families to explore their health plan options and enroll in coverage that best suit their needs. The extended initial open enrollment period for purchasing coverage begins on October 1, 2013, and lasts through March 31, 2014. However, special enrollment periods will be available for those who need to purchase plans through the Exchange or the traditional market outside of open enrollment due to special circumstances.
2. Health insurance exchanges
Health insurance exchanges are new marketplaces where individuals can shop for coverage beginning in 2014. California established “Covered California” as the state exchange which can be found at www.coveredca.com
3. Grandfathered plans
Members who are enrolled in grandfathered plans (individual and family plans purchased on or before March 23, 2010) can remain in their grandfathered plans in 2014.
4. Essential health benefits
All non-grandfathered health plans in the individual market, both inside and outside of Covered California, must offer the 10 “essential health benefits” categories that include services such as emergency services, hospitalization, prescription drugs, and preventive and wellness services. The ACA doesn’t mandate where you purchase your coverage. You can purchase it from Covered California, or just as you do today.
5. Standardized levels of coverage
In 2014, all non-grandfathered individual health plans will fall into four levels of coverage: bronze, silver, gold, and platinum. The levels represent the ”actuarial values” the plans must meet, 60%, 70%, 80%, and 90% respectively. The actuarial value represents the anticipated share of costs a plan will cover on. By grouping plans in these levels, you can more easily compare plans with similar levels of coverage. In addition to the four levels of coverage, a “catastrophic” plan is offered. This plan is for individuals younger than 30 years old or those who can provide a certification that they are without affordable coverage or are experiencing hardship.
6. Individual rating structure changes
Rate restrictions were implemented to limit how much premiums charged to individuals can vary. In California, the only rating factors that will be allowed to be used in determining rates are geography, age, and family size. Basing premiums on health status, medical conditions, genetic information, or evidence of insurability is prohibited.
Geography
• Rating will be based on the cost of care in a particular geographic area.
• There will be 19 geographic areas to improve access and affordability
Age
Rates based on age will differ by no more than a 3:1 ratio, where the cost for the highest age may be no more than three times the cost for a young adult.
Family size
In determining a family’s total cost, all adults (subscriber, spouse, adult children) age 21 and above are rated separately under family coverage, and only the three oldest children who are under age 21 will be rated in the total family premium.
Rate guarantee
• Rates for health plans will be guaranteed for a full calendar year or the duration of the calendar year for special enrollment
•Rate adjustments due to age changes can only occur during open enrollment or special enrollment periods.
7. Tax credits (subsidies)
In 2014, subsidies, in the form of tax credits and help with out-of-pocket health expenses for certain lower-income individuals, will be available to U.S. citizens and legal immigrants who purchase coverage through Covered California, and who have income up to 400% of the federal poverty level (FPL). To be eligible, individuals must:
• Not be eligible for public coverage including Medicaid, the Children’s Health Insurance Program, Medicare, or military coverage, and
• Not have access to health insurance through an employer, unless the employer does not cover at least 60% of covered benefits on average or the employee share of the premium exceeds 9.5% of the employee’s income.
8. ACA taxes
While the ACA provides tax credits for qualifying individuals, it also taxes plans to pay for subsidies
and to finance high-risk individuals. Here’s what’s new:
a) Health insurer tax: Beginning in 2014, this tax pays for a portion of the expenses related to providing premium subsidies and tax credits. This tax is estimated to be approximately 2.3% of dues and/or premiums.
b) Transitional reinsurance tax: From 2014 through 2016, this tax funds programs to finance the cost of high-risk individuals and is estimated to be $5.25 per member per month ($63/year).
9. Mandated coverage
Also, starting in January 2014, most people will be required to have health insurance or pay a penalty
if they don’t. Coverage can include employer-provided insurance, coverage purchased in the individual market, and certain government-sponsored plans such as Medicare or Medi-Cal.
10.As your local Health Care Reform Certified Agent I am ready to help you!
Whether you decide to purchase plans through Covered California or through the traditional market, depend on me as your trusted advisor to help you find the plans that best fits your needs & budget.
As of Oct 1, I will be able to provide you with information on the plans, help you determine if you qualify for a subsidy & help you with the application process. Don’t wait… millions of Californians will have to make changes to their current coverage, the earlier you get yours done, the more likely you will get personalized assistance. Call me to reserve your time slot (858)922-0777, we can meet in person or online.
Covered California is California's new health insurance exchange, where individuals, families and small businesses can find affordable health insurance.
