Over View

Require most U.S. citizens and legal residents to have health insurance.

Create state-based American Health Benefit Exchanges through which individuals can purchase coverage, with premium and cost sharing credits available to individuals/families with income between 133-400% of the federal poverty level (the poverty level is $19,530 for a family of three in 2013) and create separate Exchanges through which small businesses can purchase coverage.

Require employers to pay penalties for employees who receive tax credits for health insurance through an Exchange, with exceptions for small employers.

Impose new regulations on health plans in the Exchanges and in the individual and small group markets.

Expand Medicaid to 133% of the federal poverty level.

Individual Mandate

Require U.S. citizens and legal residents to have qualifying health coverage.

 

Penalties

Greater of $695 up to $2085 for families or 2.5% of household income

Phased in:

$95 2014 or 1.0% taxable income

$325 2015 or 2.0% taxable income

$695 2016 or 2.5% taxable income

 

Exemptions will be granted for financial hardship, religious objections, American Indians, those without coverage for less than three months,  undocumented immigrants, incarcerated individuals, those for whom the lowest cost plan option exceeds 8% of an individual’s income, and those with incomes below the tax filing threshold (in 2009 the threshold for taxpayers under age 65 was $9,350 for singles and $18,700 for couples).

 

Employer Requirements

Assess employers with 50 or more full-time employees that do not offer coverage and have at least one full-time employee who receives a premium tax credit a fee of $2,000 per full-time employee, excluding the first 30 employees from the assessment. (Health Insurance Premium Tax Credit Starting in 2014, individuals and families can take a new premium tax credit to help them afford health insurance coverage purchased through an Affordable Insurance Exchange.)

 

Employers with 50 or more full-time employees that offer coverage but have at least one full-time employee receiving a premium tax credit, will pay the lesser of $3,000 for each employee receiving a premium credit or $2,000 for each full-time employee, excluding the first 30 employees from the assessment. (Effective January 1, 2014)

 

  • Exempt employers with up to 50 full-time employees from any of the above penalties.

  • Require employers with more than 200 employees to automatically enroll employees into health insurance plans offered by the employer.
  • Employees may opt out of coverage

 

Medicaid

Expand Medicaid to all non-Medicare eligible individuals under age 65 (children, pregnant women, parents, and adults without dependent children) with incomes up to 133% Federal Poverty Level (FPL) based on modified adjusted gross income (as under current law undocumented immigrants are not eligible for Medicaid).

 

All newly eligible adults will be guaranteed a benchmark benefit package that meets the essential

health benefits available through the Exchanges.

The Supreme Court ruling on the constitutionality of the ACA upheld the Medicaid expansion, but limited the ability of HHS to enforce it, thereby making the decision to expand Medicaid optional for states.

 To finance the coverage for the newly eligible (those who were not previously eligible for at least

benchmark equivalent coverage, those who were eligible for a capped program but were not enrolled, or those who were enrolled in state-funded programs), states will receive 100% federal funding for 2014 through 2016, 95% federal financing in 2017, 94% federal financing in 2018, 93% federal financing in 2019, and 90% federal financing for 2020 and subsequent years. States that have already expanded eligibility to adults with incomes up to 100% FPL will receive a phased-in increase in the federal medical assistance percentage (FMAP) for non-pregnant childless adults so that by 2019 they receive the same federal financing as other states (93% in 2019 and 90% in 2020 and later).

 

States have the option to expand Medicaid eligibility to childless adults beginning on April 1, 2010, but will receive their regular Federal Medicaid Assistance Program (FMAP) until 2014. In addition, increase Medicaid payments in fee-for-service and managed care for primary care services provided by primary care doctors (family medicine, general internal medicine or pediatric medicine) to 100% of the Medicare payment rates for 2013 and 2014.

States will receive 100% federal financing for the increased payment rates. (Effective January 1, 2014)

 Treatment of Children’s Health Insurance Program (CHIP)

Require states to maintain current income eligibility levels for children in Medicaid and the Children’s Health Insurance Program (CHIP) until 2019 and extend funding for CHIP through 2015.

 Eligibility for Credits

Limit availability of premium credits and cost-sharing subsidies through the Exchanges to U.S. citizens and legal immigrants who meet income limits.

Employees who are offered coverage by an employer are not eligible for premium credits unless the employer plan does not have an actuarial value of at least 60% or if the employee share of the premium exceeds 9.5% of income.

Legal immigrants who are barred from enrolling in Medicaid during their first five years in the U.S. will be eligible for premium credits.

Premium Credits

Provide refundable and advanceable premium credits to eligible individuals and families with incomes between 100-400% FPL to purchase insurance through the Exchanges.

 

The premium credits will be tied to the second lowest cost silver plan in the area and will be set on a sliding scale such that the premium contributions are limited to the following percentages of income for specified income levels:

 

Up to 133% FPL: 2% of income

133-150% FPL: 3 – 4% of income

150-200% FPL: 4 – 6.3% of income

200-250% FPL: 6.3 – 8.05% of income

250-300% FPL: 8.05 – 9.5% of income

300-400% FPL: 9.5% of income

 

Increase the premium contributions for those receiving subsidies annually to reflect the excess of the premium growth over the rate of income growth for 2014-2018.

 

Beginning in 2019, further adjust the premium contributions to reflect the excess of premium growth over CPI if aggregate premiums and cost sharing subsidies exceed .54% of GDP.

Provisions related to the premium and cost-sharing subsidies are effective January 1, 2014.

Cost Sharing Subsidies

Provide cost-sharing subsidies to eligible individuals and families.

 

The cost-sharing credits reduce the cost sharing amounts and annual cost-sharing limits and have the effect of increasing the actuarial value of the basic benefit plan to the following percentages of the full value of the plan for the specified income level:

 

100-150% FPL: 94%

150-200% FPL: 87%

200-250% FPL: 73%

250-400% FPL: 70%

Require verification of both income and citizenship status in determining eligibility for the federal

premium credits

Subsidies and abortion coverage

Ensure that federal premium or cost-sharing subsidies are not used to purchase coverage for abortion if coverage extends beyond saving the life of the woman or cases of rape or incest (Hyde amendment).

 

If an individual who receives federal assistance purchases coverage in a plan that chooses to cover abortion services beyond those for which federal funds are permitted, those federal subsidy funds (for premiums or cost-sharing) must not be used for the purchase of the abortion coverage and must be segregated from private premium payments or state funds.

 

Small Business Tax Credits

Provide small employers with no more than 25 employees and average annual wages of less than $50,000 that purchase health insurance for employees with a tax credit.

 

Phase I:

For tax years 2010 through 2013, provide a tax credit of up to 35% of the employer’s contribution toward the employee’s health insurance premium if the employer contributes at least 50% of the total premium cost or 50% of a benchmark premium. The full credit will be available to employers with 10 or fewer employees and average annual wages of less than $25,000.

 

The credit phases-out as firm size and average wage increases. Tax-exempt small businesses meeting these requirements are eligible for tax credits of up to 25% of the employer’s contribution toward the employee’s health insurance premium.

 

Phase II: For tax years 2014 and later, for eligible small businesses that purchase coverage through the state Exchange, provide a tax credit of up to 50% of the employer’s contribution toward the employee’s health insurance premium if the employer contributes at least 50% of the total premium cost. The credit will be available for two years.

 

The full credit will be available to employers with 10 or fewer employees and average annual wages of less than $25,000. The credit phases-out as firm size and average wage increases.

 

Tax-exempt small businesses meeting these requirements are eligible for tax credits of up to 35% of the employer’s contribution toward the employee’s health insurance premium.

 

Reinsurance program

Create a temporary reinsurance program for employers providing health insurance coverage to retirees over age 55 who are not eligible for Medicare.

 

Program will reimburse employers or insurers for 80% of retiree claims between $15,000 and $90,000. Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan. Appropriate $5 billion to finance the program. (Effective 90 days following enactment through January 1, 2014)

 

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