A Refresher on the Affordable Care Act
On March 23, 2010, a landmark healthcare law was passed which would fundamentally change the health insurance market as we knew it, and would have a direct effect on almost all Americans. With a seemingly endless stream of new regulations and requirements, coupled with the politically polarizing nature of the issue, it has proven quite easy to become confused with what is required of us. This illustrates the glaring lack of unbiased information, presented in easily understood terminology, and with no political slant.
It may be hard to believe, but this past March marked the six-year anniversary of the incredibly complex Affordable Care Act (ACA) being passed. Not surprisingly, many are still in a state of confusion regarding certain aspects of the law, and how they may or may not be affected by the law.
The first and most important piece of the law that needs to be understood is the individual mandate. Simply put, the ACA requires most individuals to obtain acceptable health insurance coverage for themselves and their family members, or pay a financial penalty for not doing so. This rule became effective on January 1, 2014.
In order to be able to implement this rule, some major changes had to be made in the health insurance industry as it stood, so everyone would be able to qualify for coverage without being discriminated against. This meant insurers would no longer be allowed to medically underwrite, and could not rider-out or exclude coverage for pre-existing conditions, nor would insurers be allowed to have two different sets of rates based on gender.
This means, for example, a 40-year-old woman undergoing cancer treatment would not only be approved for a medical insurance plan with no medical questions asked, but her rate would be exactly the same as a perfectly healthy male of the same age, living in the same zip code, on the exact same plan.
Furthermore, the law also features an employer mandate for businesses who meet a defined threshold in terms of number of full-time and “full-time-equivalent” employees. These employers are referred to under the ACA as “Applicable Large Employers” or ALE’s.
If we simply leave it at that, then all of this seems very simple; however, it all gets much more complex from that point. Granted, the individual mandate is very simple – purchase compliant coverage for yourself and your family, and you will not be penalized. Fail to do so, and be penalized.
For businesses, however, many are left feeling they are in an impossible labyrinth of determining size, market segment, measurement periods and a whole host of other requirements the law has imposed on businesses as a result of this law. And, this is all without mentioning all of the pitfalls and penalties that exist should a business fail to get all of this right!
Watch the video interview with Kathy Garza, a group and individual health insurance expert and contributing author on all topics Obamacare and health insurance. Kathy uses easy-to-understand terminology to help individuals and business owners familiarize themselves with the requirements so they don’t face financial penalties due to non-compliance.
The ACA is an incredibly complex law that started out with 2,700 pages and has since seen an additional 20,000 pages worth of amendments. This is enough to make anyone’s head spin, which reinforces the need for industry experts, such as Kathy Garza, to help navigate and provide strategies to manage the complexities related to the law. In this day and age, it’s all about minimizing the risk for financial penalties, which can, in some instances, be stiff enough to make a company close its doors for good.
Nationally syndicated financial columnist Steve Savant interviews employee benefit specialist Kathy Garza on the Obamacare Update. Right on the Money is a weekly one-hour online broadcast for TV and radio distribution. The show contains five ten-minute segments that are redistributed online as individual video press releases.