Starting in 2014 if your employer doesn’t offer insurance, you will be able to buy it directly in an Affordable Insurance Marketplace. A Marketplace is a new transparent and competitive insurance market where individuals and small businesses can buy affordable and qualified health benefit plans. Marketplaces will offer you a choice of health plans that meet certain benefits and cost standards. Starting in 2014, Members of Congress will be getting their health care insurance through Marketplaces, and you will be able buy your insurance through Marketplaces too.
The law implements strong reforms that prohibit insurance companies from refusing to sell coverage or renew policies because of an individual’s pre-existing conditions. Also, in the individual and small group market, it eliminates the ability of insurance companies to charge higher rates due to gender or health status.
Workers meeting certain requirements who cannot afford the coverage provided by their employer may take whatever funds their employer might have contributed to their insurance and use these resources to help purchase a more affordable plan in the new Affordable Insurance Marketplaces. These new competitive marketplaces will allow individuals and small businesses to buy qualified health benefit plans.
The law implements the second phase of the small business tax credit for qualified small businesses and small non-profit organizations. In this phase, the credit is up to 50% of the employer’s contribution to provide health insurance for employees. There is also up to a 35% credit for small non-profit organizations.
Employers must provide employees written notice: (1) of the existence of the Health Insurance Marketplace which will become operative as of January 1, 2014; (2) of the employee’s potential eligibility for federal assistance if the employer’s health plan doesn’t meet affordability and minimum value criteria under PPACA and if employee household income is below certain thresholds; and (3) that employees may lose the employer’s contribution to health coverage if they purchase health insurance through the Health Insurance Marketplace.
An employer offering retiree prescription drug coverage that is at least as valuable as Medicare Part D coverage is currently entitled to a federal retiree drug subsidy. Employers can claim a deduction for the entire cost of providing the prescription drug coverage even though a portion of the cost is offset by the subsidy they receive. The ACA repeals the current rule permitting deduction of the portion of the drug coverage expense that is offset by the Medicare Part D subsidy.
Requires employers to report the cost of coverage under an employer-sponsored group health plan. Reporting the cost of health care coverage on the Form W-2 does not mean that the coverage is taxable: the value of the employer’s excludable contribution to health coverage continues to be excludable from an employee’s income, and it is not taxable. This reporting is for informational purposes only and will provide employees useful and comparable consumer information on the cost of their health care coverage.
Up to 4 million small businesses are eligible for tax credits to help them provide insurance benefits to their workers. The first phase of this provision provides a credit worth up to 35% of the employer’s contribution to the employees’ health insurance. Small non-profit organizations may receive up to a 25% credit.
Effective for health plan years beginning on or after September 23, 2010
Under the new law, young adults are allowed to stay on their parent’s plan until they turn 26 years old. (In the case of existing group health plans, this right does not apply if the young adult is offered insurance at work). Check with your insurance company or employer to see if you qualify.
To ensure premium dollars are spent primarily on health care, the new law generally requires that at least 85% of all premium dollars collected by insurance companies for large employer plans are spent on health care services and health care quality improvement. For plans sold to individuals and small employers, at least 80% of the premium must be spent on benefits and quality improvement. If insurance companies do not meet these goals because their administrative costs or profits are too high, they must provide rebates to consumers.