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.
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