The Affordable Healthcare Act Overview
The Affordable Care Act is the shorter term for the Patient Protection and Affordable Care Act Law, or Obamacare. The Affordable Care Act is part of a comprehensive health care reform bill signed into law on March 23, 2010 and upheld by the Supreme Court on June 28, 2012. The Affordable Care is a mandate that requires the majority of United State Citizens to have health Insurance, the creation of a Health Insurance Exchange to allow individuals and small business to purchase health insurance, and health care related services. The law also aims at expanding health care coverage through subsidies for individuals within 133%-400% of the federal poverty level as part of Medicaid Expansion; additionally the Affordable Care Act requires business with 50 or more employees to pay a health insurance tax if they do not provide adequate health insurance to employees. The Affordable Care Act is compromised of various provisions.
Affordable Healthcare Act: The Individual Mandate
The individual mandate of the Affordable Care Act requires all citizen and legal residents living within the United States to possess health insurance, or health care coverage. Individuals who choose to forego purchasing health insurance through the Health Insurance Exchange, or decline employer provided coverage will be charge a Health Insurance tax to be administered by the IRS
Affordable Healthcare Act: Business Impact
Business with 50 or more employees with at least one fulltime employee must provide coverage to their employees. If coverage is not provided a fee of $2000 per full time employee will be assessed starting at the 31st employee. The law provides exemptions from the Health Insurance Tax for small business with less than 30 employees.
Affordable Healthcare Act: Medicaid Expansion
The Affordable Care Act asks states to expand their Medicaid enrollment eligibility. The new enrollment eligibility for states that choose to partake in Medicaid Expansion will be 133%-400% of the federal poverty level. The new eligibility requirement will be open to all individuals under 65 (Parents, Children, Adults with children, and pregnant women) The Federal Government will cover the cost at 100% for all new enrollees that are newly eligible due to the Medicaid Expansion provision of the Affordable Care Act from 2014-2016. 95% in 2016, 94% 2017 the coverage will continue to phase out until 2020 when it will be at 90% Please visit Medicaidexpansion.com for latest news on your states Medicaid expansion status.
Affordable Healthcare Act: Individual Subsidies
The Affordable Care Act ensures everyone is able to afford health coverage. Various subsidies will be available for individuals as part of the Affordable Care Act. Individuals who are at a specific poverty level will receive a refundable and advance premium credit. This credit is only available for US citizen and legal immigrants, and to individuals whose employer does not offer an employer based health insurance plan. Please use the Health Insurance Tax calculator to see if you qualify for a subsidy.
Affordable Healthcare Act: Small Business
The Affordable Care Act will provide business with 25 employees or less earning less than $50,000 on average that provide employees with health insurance, a small business tax credit. This small business tax credit will be rolled out in two phases. Phase 1: from 2010-2013 a tax credits to not exceed 35% of employers contribution towards the health insurance premium for employees. Phase 2: Starting in 2014 and forward any business that purchase health insurance through the Health Insurance Exchange will receive a small business tax credit not to exceed 50% of their out of pocket employer contribution if the business provides at least 50% of the employees premium. Small business with 10 or less employees earning less than $25,000 per year will be eligible for the full subsidy for up to two years.
If your head is spinning from all the details so far, here is a quick video clip that explains it all in under four minutes. If you still want to continue read below.
Affordable Care Healthcare Act: IRS Tax Implications
The Affordable Care Act will provide new set of rules regarding IRS tax implications. IRS tax implication including, Health Insurance Tax, HSA/FSA maximum contribution, Medical Excises Tax, Medicare Part D retirees drug subsidy, Adoption Credit. Please read the IRS Tax implication Article for more detail.
Affordable Healthcare Act: Health Insurance Exchange
The Affordable Care Act Health Insurance Exchange will be set for open enrollment in October 2013 and plans will go in effect on January 1, 2014. States have the option of setting up their own health Insurance Exchange, or letting the Federal Government establish the exchange for the state. There will also be SHOP (Small Business Health Options Program) for business with 100 or less employees. These exchanges will be a market place to allow individual and small business to purchase affordable health insurance products.
Affordable Healthcare Act: Private Health Insurance
All new private health insurance policies that will be established after January 1st must comply with one of four mandatory benefit categories.
1) Limited deductibles that must be less than $2000 for individuals, and $4000 for families.
2) Limit waiting period for insurance coverage to a maximum of 90 days
3) Create a temporary reinsurance program
4) Provide the state where the business resides the option and ability to merge the Small group and individual market.
Affordable Healthcare Act: Preventative Services
The Affordable Care Act will eliminate cost sharing on various preventative services. Cancer Screening, Immunization for Children, infant, Women Preventative services even though many business are contesting this part of the law currently.