The Patient Protection and Affordable Care Act (ACA), a piece of federal legislation commonly referred to as "Obamacare," made sweeping changes to how health insurance is procured and paid for. Signed into law on 2010, ACA requires individuals who don't receive health insurance benefits through their employers to purchase coverage or pay a penalty. The law also puts certain limits on what insurers may or may not do with respect to eligibility and coverage. The ACA has numerous, often-complex provisions that phase in over time (through 2022).
This article provides a concise overview of Obamacare, how it affects you, and what you need to do to take advantage of its benefits. See FindLaw's Health Care Law section for related articles and resources. To learn more about your rights and responsibilities as an employee, see Health Insurance Benefits.
The Affordable Care Act seeks to lower health care costs by making sure more people participate and receive preventive care, while prohibiting some of the insurance industry's more restrictive practices. The following is a list of key ACA provisions (with the implementation date in parentheses, where applicable):
If you haven't had health insurance in the past, the Affordable Care Act gives you and your employer some incentives and options. But if you already have coverage—whether it's Medicare, Medicaid, a private insurance plan, or through your employer—you may keep your current plan. You are free to explore your options in the broader marketplace, however you will not be eligible for subsidies (likewise, your employer will not be penalized if you voluntarily leave your work-based health insurance plan).
The following ACA provisions will impact existing plans (if purchased after March 23, 2010):
Perhaps the most controversial provision of Obamacare is the individual mandate, the requirement that nearly every individual in the U.S. have health care coverage. The rationale for requiring coverage is that young, relatively healthy people who pay regular insurance premiums ultimately help cover the costs of older and less-healthy individuals. And since insurance companies may not refuse to cover those with pre-existing conditions, the mandate will discourage people from simply waiting until they have a health care emergency.
If you refuse to get coverage, you will be charged a penalty (likewise, businesses who fail to offer health benefits to full-time employees are subject to a penalty). For 2014, the first year of the mandate, those without insurance will be charged 1 percent of their income or $95, whichever is greater. Families will be charged $47.50 per uninsured child and the most a family would pay in 2014 is $285. This fee increases each year (totaling 2.5 percent of your annual income or $695 in 2016, whichever is higher).
The ACA offers some limited exemptions from the non-compliance penalty:
While those with very low incomes are exempt from the individual mandate, the Affordable Care Act provides ways to make health care coverage more accessible. Visit the Health Insurance Marketplace and provide information about your household (size, annual income) to find out whether you qualify for free or low-cost coverage.
The Marketplace offers four categories of coverage to help with comparisons: Bronze, Silver, Gold, and Platinum. Bronze plans typically charge the lowest premiums, but pay a smaller share of costs when care is rendered. Platinum plans typically charge the highest monthly premiums, offer the lowest out-of-pocket costs, and pay more of the costs if you need expensive medical care.
The U.S. Supreme Court took up two separate challenges to the ACA, decided in 2012 and 2015 (respectively), but justices ultimately upheld key parts of the Act. In the first case, the Court ruled that the penalty paid by those without insurance technically was a tax and thus legally permissible. In the second case, the Court ruled that states without their own health care exchanges were nevertheless entitled to federal subsidies.
Consider speaking with a health care attorney if you have any additional questions or concerns about Obamacare.