The Affordable Care Act is one of the biggest and most debated pieces of legislation since Medicare passed in 1965. Unfortunately, the ACA seems unnervingly complicated and any digestible information seems to come from biased, bipartisan ideologies. The whole process of learning about the law just seems aggravating and, until recently, easily avoidable. Working in the payroll, time & attendance and human resources industries requires I be knowledgeable on the subject and with a Dominion Webinar on this topic coming up, what better time to learn than right now. I hope you can take something away from my (hopefully) nonpartisan list of five things you should know about the Affordable Care Act.
Ban on lifetime and annual limits
Prior to the ACA’s inception, health insurance providers could and would set annual and lifetime limits (in dollars) on what they would spend total on your policy, which if maxed out required you to pay the overages. The ACA outlawed setting lifetime limits on most benefit plans starting in 2010. The ACA would phase out annual limits, starting in 2010 and ending in 2014, with no annual limits allowed on most plans starting January 1st, 2014.
Premium rebates if insurers underspend on care
This is one of the more interesting parts of the legislation. Insurers must spend at least 80% of the premiums you pay on medical care and quality improvements. If insurance companies spend more on their own overhead, they have to provide premium rebates to their customers every summer. The first round of these rebates went out in 2012 and health insurance companies had to pay out a total of $1.1 billion in rebates. About 12.8 million Americans received a rebate in 2012, according to the Department of Health and Human Services.
Children under 19 with pre-existing conditions
The ACA prohibits health insurance providers and group plans from excluding coverage from children under 19 with preexisting conditions. This mandate applies to grandfathered group health plans and group health insurance but not to grandfathered individual plans.
Breaks for small businesses
Companies with 50 or fewer employees make up 96% of all employer firms in the United States according to 2011 census data. Those companies will not face any kind of penalty or fine for not offering healthcare to their employees. Companies with 20 or fewer employees make up 89% percent of all employer firms and are eligible to receive tax credits that could cover up to 35% of premium costs. Qualifiers to receive these credits are:
The business must pay at least 50% of employees premiums and
Workers annual salaries can average no more than $50,000 per year
Members of congress must also get their insurance in the online marketplace
A previously misunderstood part of the ACA, members of congress are in fact legally mandated to pick their health insurance plan from the online marketplace.
Hopefully some of these stipulations on the Affordable Care Act shed some light or provided some new insight on potentially confusing aspects of the ACA. There’s still an enormous amount of information on this ever changing law and marketplace, so it’s imperative that you keep up on any developments to know how this affects you and your family.