6 Key Points to the Affordable Care Act

1)    Does your current health insurance plan need to change?

If you have a grandfathered plan, a plan whose coverage started before March 23, 2010 you do not have to change your coverage in 2014, if your plan is still available with your provider.   You may still be able to keep a plan purchased after March 23, 2010 if it meets the requirements of the Affordable Care Act. Plans that don’t meet all of the new benefit standards may need to be updated at some point in 2014 or risk a penalty on 2014 federal taxes.  Insurance coverage starting January 1, 2014 or later must meet the minimum Essential Health Benefit (EHB) requirements.  Understanding the EHB will help you make better decisions about your health care.

2)    How will you pay for your health insurance?

Everyone must have health insurance in 2014 or pay a tax penalty, designed in part to offset the cost of paying for the health care of people without health insurance. If you do not have employer-based health insurance you must purchase an individual health plan.  In order to qualify for a subsidy, in addition to having an annual income which  falls below 400% of the federal poverty level in 2014, you must you must also be a legal resident of the United States, not incarcerated, and not eligible for other forms of minimum essential coverage (for example, coverage through an employer-based plan or through Medicare or Medicaid).

3)    What do you need to know about health insurance exchanges?

The basic structure of health care benefits changed irrevocably in 2014.  All of the newly designed plans must cover the 10 essential health benefits.

Each plan will be assigned a metallic designation (bronze, silver, gold, or platinum) indicating a benefit level (60% -90%).  A bronze plan will pay an average of 60% of all covered medical costs, whereas a platinum plan pays 90%. 

Out-of-pocket costs like co-pays, coinsurance, and deductibles will also be limited under the law. The ACA restricts the maximum out-of-pocket limits on all plans to no more than $6,350 for an individual and $12,700 for a family in 2014.

4)    Where do you buy Health Insurance in 2014?

While many people will still buy insurance through an employer-based plan, individuals may benefit by researching alternatives. One objective of Health Care Reform was to give consumers more options and allow you to take control of your health care.  You are able to purchase certain kinds of plans through state-based health insurance exchanges or marketplaces, in addition to buying from licensed agents or direct from the insurance company.  Plans sold off government exchanges will also have varying deductibles and metallic benefit levels, tiered provider networks, and varying benefits not covered by major medical health insurance plans, like vision, dental, accident, short-term, and critical illness insurance.   Some states are creating their own exchanges while the federal government is building exchanges for others.

Some states allow private online exchanges which offer a variety of plans meeting ACA standards.

5)    What types of Health Insurance plans are available in 2014?

A health plan “Qualified” under the Affordable Care Act must cover 10 Essential Health Benefits (EHB) and be certified by an exchange.  A Qualified Health Plan (QHP) is eligible for purchase with a government subsidy.

Catastrophic Health Insurance Plans – Catastrophic plans are available for people under age 30, removing the potential tax penalty.  These plans provide fewer benefits.

Consumers who do not want to use a subsidy, or do not meet the qualifications, can purchase a Non-Qualified Health Plan which may not meet the 10 EHBs, will not qualify for a subsidy and will likely incur a penalty tax.

Supplemental Plans – Many consumers want benefits beyond what’s provided in a major medical health insurance plan. Benefits like life, dental, vision, critical illness, and accident insurance are a popular part of benefits packages offered by employers and will be available for individuals on private exchanges. Some government exchanges may offer some of these products as well.

Gap Insurance – The ACA allows people to be uninsured for up to 3 months without being subject to a tax penalty. The ACA also creates new enrollment periods when a person can enroll in major medical insurance. Outside of an enrollment period, people may have to wait to get coverage. Gap insurance products like short-term medical insurance may be helpful if you need limited coverage outside of the enrollment window.

6)    When and where you can buy insurance…and what happens if you don’t.

Enrollment for the new ACA health insurance began October 2013 and runs through March of 2014.  No one can be turned down for insurance any longer, one of the foremost initiatives of the ACA.  On the other hand, those who do not obtain insurance during this period will have to wait until the 2015 open enrollment unless they experience a qualifying life event. Furthermore, if you don’t have major medical health insurance that meets minimum federal standards for more than three months in a row, you may incur a tax penalty.

Qualifying Life Events include:

If you have not enrolled in a qualified health plan by March 2014 you will face a penalty of $95 or 1% of your income – whichever is greater, and unfunded medical bills if you get sick or injured.

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Sample Savings Chart
PPO and Indemnity Plan Differences
Plan NameIHC BayIHC Ridge (3)IHC Apex
Plan TypePPO (1)Indemnity (4)PPO (1)
Preventive Care
Coinsurance
100%80%100%
Waiting periodsImmediateImmediateImmediate
Diagnostic Care
Coinsurance
100%60%80%
Waiting periodsImmediateImmediate6-Months
Basic Care
Coinsurance
50%40%80%
Waiting periods6-Months3-Months6-Months
Major Care
Coinsurance
Not Covered (2)20%50%
Waiting periodsNA15-Months12-Months
Annual Maximums$1,000$500/$750/$1,000**$1,000
Deductible$50$100 Lifetime$100
Office CopayNANANA
One Time Enrollment FeeNANANA
Association MembershipYesYesYes

** IHC Ridge plan benefits increase each year for three years. After the third year, the plan levels off at a $1,000 calendar-year maximum. Underwritten by Madison National Life Insurance Company, Inc.. Read more>

Benefits vary between carriers. Refer to the plan details or request the certificate for further information.

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