Category FAQS

If you’re healthy and have some money in the bank, you might want to consider a high-deductible health insurance plan.

The plans offer cost savings over plans because of the high deductible, and they protect you from catastrophic health events.

If you’re in good health, rarely need prescription drugs, don’t have a pre-existing condition and don’t intend to get pregnant, you might consider a high-deductible plan.*

Under those circumstances, you won’t have many out-of-pocket expenses. Meanwhile, you can relax and enjoy the comfort of having protection against any unexpected and expensive medical costs.

The only caveat: You should put aside enough money (typically from $1,000 to $5,000, depending on your policy), to cover your deductibles in case of an emergency.  That’s why pairing your high-deductible plan with an IRS qualified health savings account makes this combination attractive.

(*Note: Some plans have a one-year waiting period before they cover maternity care or pre-existing conditions.)

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There’s good news for children with pre-existing conditions who are below the age of 19.

Under the Affordable Care Act passed in 2010, they can’t be denied coverage under group plans and most individual family or child-only policies. This applies even if your child has a potentially life-threatening medical condition like asthma or diabetes.

This rule applies to all job-related health plans and individual health insurance policies issued after March 23, 2010.

Children account for nearly 9 percent of the estimated 57.2 million Americans under age 65 with pre-existing medical conditions, ranging from deadly cancers to routine chronic conditions.

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If you have a pre-existing medical condition and are shopping for health insurance, expect special treatment.

How special? Well, kind of like a felon carrying the Ebola virus. You may as well stick a “kick-me” sign on your back. You’ll either be denied coverage, charged extra for premiums and out-of-pocket costs, or you might just have to abide a conditional waiting period.

The good news is that the Patient Protection and Affordable Care Act signed into law last year will help individuals with pre-existing conditions. But not until the start of 2014.

Until then, you should look into the Pre-Existing Condition Insurance Plan (PCIP), the federal version of high-risk insurance pools. To qualify, you must have been uninsured for six months, have a pre-existing condition, and have been denied insurance by a private insurance company.

Details vary depending on where you live in and whether your state’s PCIP is operated by your state or by the Department of Health and Human Services. Check out this interactive guide to learn more about howPCIP plans work in your state, how to apply, what they cost and what they cover.

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An accountable care organization (ACO) is a new health care delivery model envisioned by theAffordable Care Act (ACA) in which a group of doctors, hospitals and other health care providers work together to coordinate care for people enrolled in Original Medicare.

Many Medicare beneficiaries have several chronic conditions and see several different doctors. As often as not, the doctors don’t work together, and the patient receives redundant or conflicting care. Under the new model, an ACO will be responsible for all providing all health care services for a Medicare beneficiary. Through better coordination and communication, ACOs are expected to provide better care and lower costs.

As with Original Medicare, ACOs will still be paid on a fee-for-service basis. However, they will also be able to earn more if they keep costs down while meeting quality targets. If the ACO saves money, the savings will be shared between the ACO and the Medicare program.

ACOs are expected to save Medicare $960 million over three years, according to HealthCare.gov.

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You probably know that generic drugs are a lot cheaper than brand name drugs, but you may wonder why. Are they lower quality? Less effective?

The FDA requires that a generic drug have the same active ingredient, quality and strength as the brand-name equivalent. The cost difference between brands and generics comes from the cost of bringing them to market.

A “brand name” drug is discovered, developed and marketed by a pharmaceutical company. Once discovered, the company quickly files for a patent to prevent other companies from copying and selling it. This gives them time to recoup research and development costs. On average, it takes $1 billion and 12 years for a single drug to travel from research lab to patient. That’s why brand names are more expensive.

Generics only become available once the patent expires – usually after 10 to 17 years. Then, other drug makers can step in and market the brand as generics. Because generic drug companies don’t have to recover research, development and marketing costs, generics are less expensive.

About 70 percent of prescriptions dispensed in the U.S. are generics, and using a generic drug is a great way to save money. For example, a popular brand name blood pressure pill costs $150 for a 30-day supply. A generic version costs $16.

If you have prescription-drug insurance, your copay for a generic is likely much lower than that for brand name drugs. For example, in a common “three-tier” copayment structure, you might pay $10 for a generic, $25 for a preferred brand, and $35 for a non-preferred brand.

If your doctor writes you a prescription, ask if a generic is available and appropriate for your condition.

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There are two basic and very different types of drug plans: prescription discount plans and prescription drug insurance.

In a discount plan, you typically pay a monthly or annual fee and get a card. You present your card when you fill a prescription, and the pharmacy gives you a certain percentage off the cost of the drug. The discount may vary drug by drug or by brands versus generics. Discount plans are NOT insurance plans. Discount plans are sold by drug manufacturers, drug stores and membership organizations like AARP.

Prescription drug insurance is similar to medical insurance. You (or your employer) pay a premium, and then you pay a copay when you fill a prescription. If you are insured through an employer or other group plan, prescription drug coverage may be a stand-alone plan or integrated with your medical insurance. In the individual, non-Medicare market, you’re most likely to find prescription insurance bundled with health insurance.

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Yes, the Affordable Care Act requires large employers to provide coverage to full-time employees or pay a penalty. This provision, called the “play or pay” rule, goes into effect Jan. 1, 2014. Small employers – those with fewer than 50 employees – are exempt from the coverage requirement and penalty.

As a side note, be aware that the ACA uses different definitions of “large employer” for different provisions of the overall law. While any company with 50 or more employees is considered large for the play-or-pay rule, the more frequently used definition is a business that maintains an average of 100 employees over the course of a year.

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Specialty drugs are high-cost prescription medications used to treat complex, chronic conditions like cancer, rheumatoid arthritis and multiple sclerosis.

Specialty drugs often require special handling (like refrigeration during shipping) and administration (such as injection or infusion). Patients using a specialty drug often must be monitored closely to determine if the therapy is working and to watch for side effects.

Specialty drugs might be covered through either medical or prescription drug insurance. How a specialty drug is covered usually depends on where the patient receives the drug.

If the patient takes a pill or self-injects the drug at home, it is more likely to be covered through his or her prescription drug benefit. If the patient receives the drug at a doctor’s office or an outpatient clinic, it’s more likely to be covered through the medical benefit.

Specialty drugs are very expensive – $1,000 or more per month – and spending on them is growing 15 to 20 percent a year. Many prescription drug plans that cover specialty drugs have a separate “tier” that specifies how much an individual has to pay for specialty drugs. Individuals may be required to pay a percentage of the drug cost or a flat-dollar copay.

Many drugs manufacturers offer patient assistance programs to help people with and without insurance get access to specialty drugs.

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Health care reform bill components

The health care reform bill passed earlier this year contains a variety of different components that, cumulatively, will have a substantial impact on the overall health care landscape. The following information breaks down some of the various components of the bill.

Grandfathered Health Plans

Your current health care plan, whether individual or through your employer, can generally be kept intact on a grandfathered basis if the only plan changes are limited to the addition or deletion of dependents. An exception to this guideline is if your employer makes changes to your plan as a result of a collective bargaining agreement. However, even if your plan is grandfathered, some of the health care reform bill’s provisions will still be applicable.Grandfathered status is available for plans effective immediately.

Small Employer Tax Credits

A tax credit is available for small employers that provide health care coverage to their employees and meet certain requirements. To qualify, the business must have no more than 25 full-time employees for the tax year and the average annual wages of its employees for the year must be less than $50,000 per full-time employee. Effective with tax years beginning in 2010.

Blue Cross Blue Shield Plans

Blue Cross Blue Shield plans are required to expend at least 85 percent of their total premiums on reimbursement for clinical services provided to enrollees in order to take advantage of the special tax credits that have been provided to them. Effective with tax years beginning in 2010.

Employer Subsidies of Medicare Part D Premiums

Employer subsidies of Medicare Part D premiums are eliminated. Effective with tax years beginning in 2013. However, there is an immediate accounting impact.

Grants for State Insurance Ombudsman Programs

The secretary of the Department of Health and Human Services can award grants to states to establish or expand health insurance ombudsman programs. For fiscal year 2010, $30 million is appropriated to fund the grants. Additional money will need to be requested to fund additional years. Effective immediately.

Rate Review

Federal review is established to monitor increases in health insurance premiums.  Additional money is made available to states to increase their review and approval of health insurance premium rate hikes. Effective immediately.

Therapeutic Discovery Tax Credit

Creates a federal tax credit for businesses with up to 250 employees that make a qualified investment in acute and chronic disease research. Effective immediately based on investments paid in taxable years beginning in 2009 or 2010.

Indian Health Benefits

Native Americans may exclude from gross income the value of qualified health benefits received directly or indirectly from the Indian Health Service or from an Indian tribe or tribal organization. Effective immediately for health benefits and coverage provided after enactment of the health care bill.

Pre-existing Condition Coverage for Individual Market Consumers

High-risk pool coverage is established for those who have been uninsured for at least six months and who can’t get current individual coverage due to pre-existing conditions. Effective within 90 days of enactment of the health care bill. Ends on Jan. 1, 2014.

Early Retiree Reinsurance Program

This temporary program provides partial reimbursement to employers providing health insurance coverage to retirees over the age of 55 who aren’t eligible for Medicare. Effective within 90 days of enactment of the health care bill. Ends on Jan. 1, 2014.

Web-based Information Portals

You will have access to portal options, including an Internet site, that provide information on affordable health coverage, Medicaid, Children’s Health Insurance Program and high-risk pool coverage. Available no later than Oct. 1, 2010.

Excise Tax on Indoor Tanning

A 10 percent excise tax is established on amounts paid for indoor tanning services. This applies whether or not your insurance policy covers the service. Effective for services performed on or after July 1, 2010.

Salary-based Health Plan Rules

Group health plans must comply with IRS rules that prohibit favoritism toward highly compensated individuals.  Effective with plan years beginning on or after Sept. 23, 2010. Grandfathered status applies.

Limits on Lifetime Benefits

Lifetime limits on the dollar value of benefits are prohibited. This includes health plans with grandfathered status.Effective with plan years beginning on or after Sept. 23, 2010.

Limits on Annual Benefits

Annual limits on benefits are limited to non-essential benefits for plan years beginning prior to Jan. 1, 2014. Annual limits are prohibited entirely for subsequent plan years. Effective with plan years beginning on or after Sept. 23, 2010.

Increased Dependent Coverage

The age of dependents eligible for health plan coverage increases to 26 years of age. Dependents can be married. The group health insurance income tax exclusion applies to the value of the benefits provided for these dependents. Through 2014, for grandfathered group health plans, coverage is only extended to these dependents if they don’t have employer-sponsored health insurance. Effective with plan years beginning on or after Sept. 23, 2010.

Policy Rescissions

Your health insurer can no longer rescind your health coverage once you become sick. Exceptions are made for cases of fraud. Effective with plan years beginning on or after Sept. 23, 2010.

Preventive Care Coverage

Mandates coverage for specific preventive care and screening services with no cost sharing by you. Covered care and services come under recommendation of the U.S. Preventive Services Task Force, the Health Resources and Services Administration and the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention. Effective with plan years beginning on or after Sept. 23, 2010. Grandfathered status applies.

Emergency Services Coverage

Emergency services must be covered at in-network levels regardless of provider. Effective with plan years beginning on or after Sept. 23, 2010. Grandfathered status applies.

Designating a Primary Care Physician

You may designate any in-network doctor as your primary care physician (including OB/GYN and pediatrician) if your plan requires the designation of a primary care physician. Effective with plan years beginning on or after Sept. 23, 2010.

Coverage Appeals

Health plans are required to have coverage appeal processes in place. Effective with plan years beginning on or after Sept. 23, 2010. Grandfathered status applies.

Coverage for Children’s Pre-existing Conditions

Health plans must cover pre-existing conditions for children 19 years of age and younger. Effective with plan years beginning on or after Sept. 23, 2010. Grandfathered status applies.

Grants for Small Employer Wellness Programs

$200 million in funding from fiscal years 2011 through 2015 is available to create grants for small, employer-based wellness programs. Effective Oct. 1, 2010.

Minimum Loss Ratios

A minimum loss ratio of 85 percent will be established for large employer health plans and 80 percent for individual and small employer (100 and below) health plans. Minimum loss ratio is the specified minimum percentage of premium dollars spent on medical care. Your health insurance carrier must issue a premium rebate if they fail to meet the minimum loss ratio requirement. Requirements and potential rebates apply to the 2011 plan year.

W2 Form Reporting

For informational purposes, your employer must put the aggregate cost of the employer-sponsored health care coverage they offer on your W2. Contributions to health savings accounts, Archer medical savings accounts and salary reduction contributions to flexible spending arrangements are excluded. Effective for benefits payable during taxable years beginning 2011.

Health Savings Account Distribution Tax Increase

The tax on health savings account distributions not used for qualified medical expenses will increase from 10 percent to 20 percent. Effective for distributions beginning in 2011.

Over-the-Counter Drug Exclusion from Account-Based Plans

If you have a health savings account, medical flexible spending arrangement, health reimbursement account or Archer medical savings account, over-the-counter drugs will no longer be reimbursable unless prescribed by your doctor. Effective for taxable years beginning 2011.

Tax on Brand-Name Prescription Drug Manufacturers

Drug manufacturers and importers will be subject to a new annual non-deductible fee. Payable in 2011 for sales in 2010.

Safe Harbor Cafeteria Plan for Small Employers

Employers with 100 or fewer employees may establish a cafeteria plan if they satisfy certain minimum participation and contribution requirements. Cafeteria plans allow employees to choose from a list of benefit options. Effective Jan. 1, 2011.

CLASS Act

Creates a new public long-term care program that your employer automatically enrolls you in unless you opt-out.Effective Jan. 1, 2011.

Business Tax Reporting (1099 Forms)

Business tax reporting will expand to include a wider variety of payments. Effective Jan. 1, 2012.

Federal Study on Large-Employer Plans

A federal study is mandated that will examine the impact on large employer health plans that result from the market reform requirements of the health care bill. Completion required prior to March 23, 2011.

Federal Study on Self-Insured Plans

Annual federal studies are mandated on self-insured plans that include such information as number of participants, benefits offered, assets and liabilities. In a self-insured plan, a company provides group health care insurance directly to its employees rather than purchased through an insurance provider. Completion required prior to March 23, 2011.

Non-profit Hospitals

Non-profit hospitals must meet new requirements to satisfy their tax-exempt status. Applicable to taxable years beginning after March 23, 2010.

Summary of Benefits

When you apply, enroll/re-enroll for coverage, or if the terms of your coverage are modified, you will receive a summary of benefits and coverage explanation containing more information than was previously presented.Notification must begin no later than March 2012.

Group Health Plan Quality Information Reporting

During the annual open enrollment period, you must be provided with a report detailing whether or not your health plan meets health quality criteria established by the secretary of the Department of Health and Human Services. The reports will also be made available through an Internet website. Must begin no later than March 23, 2012.

Tax on Group Health Plans to Fund Comparative Effectiveness Research

A premium tax on group health plans designed to fund a comparative effectiveness research program. Effective for plan years that end after Sept. 30, 2012.

Health Insurer Executive Compensation Limits

A $500,000 deduction limitation will be imposed on taxable year compensation to officers, employees, directors and service providers of covered health insurance providers. Applies to compensation paid during taxable years beginning on or after Dec. 31, 2012. Also applies to deferred compensation earned in the taxable year beginning after Dec. 31, 2009.

Flexible Spending Arrangement Limit

Will limit flexible spending arrangement contributions for medical expenses to $2,500 per year. The cap is indexed for inflation. Effective for taxable years beginning Jan. 1, 2013.

Tax on Medical Devices

Medical device manufacturers will be subject to a new excise tax equal to 2.3 percent of the price for which the device is sold. Devices of the type available for regular retail purposes such as eyeglasses and hearing aids will be exempt. Effective Jan. 1, 2013.

Medicare Payroll Tax Increase

For those with earnings and wages above $200,000 (individual) or $250,000 (joint filers), the Medicare payroll tax will increase to 0.9 percent. Those who are self-employed will not be allowed to deduct any portion of the additional tax. For those with adjusted gross income of more than $200,000 (individual) or $250,000 (joint filers), there will be a new 3.8 percent Medicare contribution tax on certain unearned income. Effective Jan. 1, 2013.

Medical Expense Tax Deduction Limitation

The threshold for the itemized deduction for unreimbursed medical expenses will increase from 7.5 percent of adjusted gross income to 10 percent of adjusted gross income. If you are 65 years of age or older, the increase will be waived for tax years 2013 through 2016. Effective Jan. 1, 2013.

Employer Notice Requirement

Your employer must notify you about the existence of Exchanges. Exchanges allow you to compare a variety of health insurance plans at a glance. Effective March 1, 2013.

Pre-existing Conditions

Coverage must be offered on a guaranteed issue basis and be guaranteed renewable. Guaranteed issue is a governmental requirement that says that health plans must allow you to enroll regardless of your health or other factors that might predict your use of health services. Prohibits exclusions based on pre-existing conditions. Effective for plan years beginning on or after Jan. 1, 2014. For enrollees under the age of 19, pre-existing conditions are prohibited beginning with plan years on or after Sept. 23, 2010. Grandfathered status applies for group health plans.

Tax on Private Health Insurance Premiums

Private health insurers will be subject to annual taxes based on net premiums written and third-party agreement fees received. The tax will not apply to self-insured plans and governmental entities. Self-insured plans are those where employers operate their own health insurance plan and pay a third party to administer it. Effective Jan. 1, 2014, for net premiums written after Dec. 31, 2012, and third-party agreement fees received after Dec. 31, 2012.

Modified Community Rating Requirements

Modified community rating standards with premium variations only allowed for age, tobacco use, family composition and geographic region will be in place for individual health insurance policies and fully-insured employer group policies covering 100 lives or less. Effective for plan years beginning on or after Jan. 1, 2014.

Group Size

Small employer groups will be redefined as having 1-100 employees. States may also elect to reduce this number to 50 employees for plan years prior to Jan 1, 2016. Effective Jan. 1, 2014.

State-Based Exchanges

Every state must create an Exchange to facilitate the sale of qualified benefit plans to individuals. A catastrophic-only policy will be available for those age 30 and younger. States must also create SHOP Exchanges to help small employers purchase coverage. Effective Jan.1, 2014.

Employee Free Choice Requirements

If you don’t enroll in the health plan offered by your employer and your household income is less than 400 percent of the federal poverty level, your employer can give you a free choice voucher that requires you to contribute between 8 percent and 9.8 percent of your household income toward the cost of coverage. The vouchers must be used in the aforementioned Exchanges to purchase coverage. Effective Jan. 1, 2014.

Essential Benefits

Standards will be established for coverage including mandated benefits, cost-sharing, out-of-pocket limits and a minimum actuarial value of 60 percent (meaning insurance covers an estimated 60 percent of health care expenses). Those 30 years old and younger can benefit from catastrophic-only policies. Effective for plan years beginning on or after Jan. 1, 2014.

Tax Credits for Lower Income Individuals

Sliding-scale premium assistance tax credits to buy coverage through the Exchange will be available for non-Medicaid eligible individuals with incomes of up to 400 percent of the federal poverty level. Effective Jan. 1, 2014.

Medicaid Expansion

The Medicaid eligibility level will increase to 133 percent of the federal poverty level. Effective Jan. 1, 2014.

Premium Assistance for Employer-Sponsored Coverage

States must offer premium assistance and Medicaid wrap-around benefits (Medicaid services that exceed coverage limitations) to Medicaid beneficiaries who are offered employer-sponsored coverage if cost-effective to do so.Effective Jan. 1, 2014.

State-Level Subsidy Programs

States may establish a federally-funded non-Medicaid state plan for people who fall between 133 percent and 200 percent of the federal poverty level. These people must not have access to affordable employer-sponsored coverage and would otherwise be eligible for subsidized coverage through a state-based Exchange. Effective Jan. 1, 2014.

Employer Mandate

Employers will have to pay a fine if they don’t offer coverage and employ more than 50 full-time equivalent employees (seasonal workers excepted) and one or more employees receives a premium assistance tax credit to buy coverage through an Exchange. The fine is $2000 per year times the number of full-time equivalent employees.

Employers will also have to pay a fine if they do offer coverage and employ more than 50 people and one or more full-time employees receives the premium assistance tax credit. The fine is the lesser of $3000 for each of those employees receiving a tax credit or $2000 for each of their full-time employees total.

Premium assistance tax credits will be available to individuals with family incomes up to 400 percent of the federal poverty level and the actuarial value of their employers’ coverage is less than 60 percent or their employer requires them to contribute more than 9.5 percent of their family income toward the cost of coverage. Effective Jan. 1, 2014.

Employer Waiting Period for Coverage

For new employees, the waiting period for coverage must not exceed 90 days. This also includes grandfathered plans. Effective Jan. 1, 2014.

Auto-Enrollment by Employers

Employers of 200 or more workers must auto-enroll all new employees into any available employer-sponsored health insurance plan. Waiting periods can apply. Employees can opt-out if they have another source of coverage. Effective date to be determined.

Individual Mandate

All American citizens and legal residents must purchase qualified health insurance coverage. The penalty for noncompliance will be an excise tax of either a flat dollar amount per person or a percentage of the individual’s income, whichever is higher.

Exceptions to this mandate include the following:

  • Religious objectors
  • Incarcerated individuals or those not lawfully present
  • Individuals who can’t afford coverage
  • Taxpayers with incomes less than 100 percent of poverty
  • Members of Indian tribes
  • Individuals who’ve received a hardship waiver
  • Individuals with incomes below the federal income tax filing threshold
  • Individuals who weren’t covered for a period of less than three months during the year

Effective Jan. 1, 2014.

Coverage Documentation

Health plans must provide coverage documentation to both individuals and the IRS. Effective Jan. 1, 2014.

Employer Wellness Plans

Wellness programs will be strengthened and the value of workplace wellness incentives will be increased to 30 percent of premiums with the cap possibly being increased to 50 percent. Effective with plan years beginning on or after Jan. 1, 2014.

Individual Market Wellness Plans

A 10-state pilot program will be created that will allow for wellness program rules to be applied to the individual health plan market during years 2014 through 2017. A study will also take place that examines the effectiveness and cost savings of wellness plans. Effective no later than July 1, 2014.

Children’s Health Insurance Program

The Children’s Health Insurance Program (provides insurance to uninsured children) will be extended through Sept. 30, 2015, but then must be reauthorized. Reauthorization by Oct. 1, 2015.

State Opt-Out Provisions

Provided that they create their own programs meeting specified standards, individual states will be allowed to apply for a waiver for up to five years for the following requirements relating to qualified health plans:

  • Exchanges
  • Cost-sharing reductions
  • Tax credits
  • Individual responsibility requirement
  • Shared responsibility for employers

Effective with plan years beginning on or after Jan. 1, 2017.

Large Groups in the Exchanges

States may allow large employer groups (100+ employees) to purchase coverage through the Exchanges. Effective Jan. 1, 2017.

Cadillac Tax

Insurers will begin paying a 40 percent excise tax on “Cadillac” health insurance plans (those plans thought to provide unusually generous benefits). These plans have values that exceed $10,200 for individual coverage and $27,500 for family coverage. Effective with taxable years beginning after Dec. 31, 2017.

DISCLAIMER:

The information provided in this document is for discussion purposes only.  IndianaHealthInsuranceExchange.com is not responsible for the tax and/or legal consequences resulting from the adoption and/or application of any plan or health insurance exchange language described in this document and/or the operation of your employee health benefit plan.

All data on this website is copyright © IndianaHealthInsuranceExchange.com. This data is not to be re-distributed, sold or used anywhere without the express written consent of IndianaHealthInsuranceExchange.com. We strictly enforce our copyright and if you are found to be in violation of this, we will seek a judgment against you.

© 2015 Nefouse & Associates
This website is operated by Nefouse & Associates Inc. We are certified to offer the federal exchange so we do comply with Personal Identifiable Information. This means any information you submit to this website will not be sold or misused. We will only use that information to assist you with obtaining a health insurance policy. At any time you may request us to destroy/deleted all information you have submitted. These are the rules under 45 CFR 155.220(c) and (d) and standards established under 45 CFR 155.260 that protect your privacy.

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Q: When does the new health care reform law take effect?

A: The health care reform law was enacted on March 23, 2010. Some of the law’s provisions took effect immediately. Other provisions will roll out gradually over the next several years.

Q: Are employers required to offer health care coverage?

A: Employers will have to pay a fine if they don’t offer coverage and employ more than 50 full-time equivalent employees (seasonal workers excepted) and one or more employees receives a premium assistance tax credit to buy coverage through an Exchange. Exchanges allow comparison of a wider variety of health plans at a glance.

Employers will also have to pay a fine if they do offer coverage and employ more than 50 people and one or more full-time employees receives a premium assistance tax credit.

Premium assistance tax credits will be available to individuals with family incomes up to 400 percent of the federal poverty level and the actuarial value of their employers’ coverage is less than 60 percent or their employer requires them to contribute more than 9.5 percent of their family income toward the cost of coverage.

Q: Am I required to have health insurance?

A: The law requires that all American citizens and legal residents purchase qualified health insurance coverage. The penalty for noncompliance will be an excise tax of either a flat dollar amount per person or a percentage of the individual’s income, whichever is higher. There are exceptions to this requirement that include:

  • Religious objectors
  • Incarcerated individuals or those not lawfully present
  • Individuals who can’t afford coverage
  • Taxpayers with incomes less than 100 percent of poverty
  • Members of Indian tribes

Q: I like my current health care coverage. Will I be allowed to keep it?

A: If your health care plan was already in place before the date of the law’s enactment, your plan is exempt from having to comply with some of the new law’s provisions. These are considered “grandfathered” plans. However, some of the law’s provisions impact grandfathered plans as well. Therefore, you may see some changes.

Q: What exemptions exist for grandfathered health care plans?

A: Generally, grandfathered plans are exempt from having to provide you with certain mandated health care benefits relating to emergency services and your choice of doctor. Grandfathered plans are also exempt from the requirement that prohibits discrimination (in eligibility/benefit offerings) in favor of highly compensated employees.

Q: Are grandfathered health care plans required to comply with any of the new law’s provisions?

A: Yes. Some of the law’s provisions impact grandfathered plans. The provisions that regulate lifetime and annual benefit limits, policy rescissions for sick enrollees and lengthy employee waiting periods (more than 90 days) for coverage all apply to grandfathered health care plans.

Q: Can my health care plan ever lose its grandfathered status?

A: Yes. Your plan could potentially lose its grandfathered status if it fails to meet any number of requirements. Following are some of the requirements:

  • Health plans must not eliminate any previously covered benefits that diagnose or treat a specific illness.
  • Health plans must not change their coinsurance levels for covered items or services in any way.
  • Health plans must not go beyond certain predetermined inflation calculations when they make changes to fixed-dollar cost-sharing amounts.

Q: I work for a small company struggling to provide health insurance to its employees. Will the new law help these companies in any way?

A: A tax credit is available for small employers. To qualify, the business must have no more than 25 full-time employees for the tax year and the average annual wages of its employees for the year must be less than $50,000 per full-time employee.

Q: Many health plans impose strict caps on annual and lifetime benefits. Will this change?

A: The new law prohibits lifetime limits on the dollar value of benefits. The law also limits caps on annual benefits to those benefits deemed non-essential.

Q: I have dependents on my policy. Will the new law impact them?

A: The age of dependents eligible for health plan coverage will increase to 26 years of age. Dependents can also be married.

Q: Does the new law address those with pre-existing health conditions?

A: Yes. Coverage must be offered on a guaranteed issue basis and be guaranteed renewable. Guaranteed issue is a governmental requirement that says that health plans must allow you to enroll regardless of your health or other factors that might predict your use of health services. You can’t be excluded based on pre-existing conditions. Health plans must also cover pre-existing conditions for children 19 years of age and younger.

Q: What happens to my coverage if I become extremely sick?

A: The law prohibits your health insurer from taking your coverage away if you become sick.

Q: Does the new law address preventive care coverage? What about emergency services?

A: The law mandates a certain level of coverage for specific preventive care and screening services with no cost-sharing by you. Emergency services must be covered at in-network levels regardless of provider.

Q: Does the new law impact my choice of doctors?

A: You may designate any in-network doctor as your primary care physician (including OB/GYN and pediatrician) if your health plan requires such designation.

Q: My health care benefits can be hard to understand. Will the new law help?

A: When you apply, enroll/re-enroll for coverage, or if the terms of your coverage are modified, the law requires that you receive a summary of benefits and coverage explanation that contains more information than you currently receive.

Q: I’m concerned about the quality of the health plans offered to me. Will the new law address this?

A: During the annual open enrollment period, you must be provided with a report detailing whether or not your health plan meets health quality criteria established by the secretary of the Department of Health and Human Services.

Q: What impact will the new health reform law have on my taxes?

A: For those with earnings and wages above $200,000 (individual) or $250,000 (joint filers), the Medicare payroll tax will increase to 0.9 percent. Those who are self-employed will not be allowed to deduct any portion of the additional tax. For those with adjusted gross income of more than $200,000 (individual) or $250,000 (joint filers), there will be a new 3.8 percent Medicare contribution tax on certain unearned income.

 

© 2015 Nefouse & Associates
This website is operated by Nefouse & Associates Inc. We are certified to offer the federal exchange so we do comply with Personal Identifiable Information. This means any information you submit to this website will not be sold or misused. We will only use that information to assist you with obtaining a health insurance policy. At any time you may request us to destroy/deleted all information you have submitted. These are the rules under 45 CFR 155.220(c) and (d) and standards established under 45 CFR 155.260 that protect your privacy.

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