ACA and Your Health Plan
JOURNAL: ISSUE 1 - 2014
With the start of 2014, the goal of the Affordable Care Act (ACA) to have everyone covered by public or private health care is closer than ever to being realized. Under the ACA, almost everyone will be required to enroll in some form of insurance in 2014. This is called the Individual Mandate. Most BAC members are covered by the International Health Fund, a Local health plan or through spousal coverage. Members who are not covered under a group health plan like the International Health Fund or a Local plan are required to obtain coverage under a Qualified Health Plan or pay a penalty. An important distinction to bear in mind is that members who work under a collective bargaining agreement that stipulates health fund contributions but who are not eligible for benefits due to a lack of hours may still be considered to have employment-based insurance under the law and may not be subject to the penalties, discussed below. Speak with your plan administrator if you have any questions.
Individuals, however, with no employment based insurance have until March 31st to enroll in health insurance before being subject to the law's tax penalty for not having coverage. For individuals, the penalty for the 2014 tax year would start at $95 or up to 1 percent of income, whichever is greater and increasing each year. For families the penalty for the 2014 tax year is $285 or 1 percent of income, whichever is greater. That will increase to $2,085 or 2.5 percent of household income, whichever is greater, in 2016. These penalties are divided by the 12-month calendar year and assessed for the months in which an individual or family did not have the required coverage. There are exceptions, including for financial hardships and for some other reasons, and individuals will be able to purchase a catastrophic plan if they meet the exceptions or are under the age of 30.
On the other hand, individuals with no employment based insurance may be able to receive cost sharing provisions and premium subsidies to purchase insurance on an Exchange for themselves and their dependents. These premium subsidies will be available for individuals and families with incomes between 138 percent and 400 percent of the federal poverty level (FPL), or about $11,490 to $45,960 for individuals and $23,550 to $94,200 for family of four (based on current guidelines). People in qualified health plans will not have out of pocket expenses greater than $5,950 per individual or $11,900 per family. The amount of out of pocket expenses an individual will pay will increase in future years based on inflation. Some other provisions include limits on the deductibles an individual will pay as well as limits on waiting periods, which cannot exceed 90 days.
In states that have expanded their Medicaid programs, individuals and families below 138% of the FPL will be directed to Medicaid by the Exchanges. This means that some children who were previously covered by a state's Children Health Insurance Program (CHIP) will now be covered under Medicaid. If someone earns between 100 and 138 percent of the FPL and lives in a state that does not expand its Medicaid program, he or she generally will not qualify for a subsidy to purchase coverage (though his/her children may still qualify for coverage through state programs). In 2014, states will decide whether most people are eligible for CHIP or Medicaid by continuing a family's income using a formula called Modified Adjusted Gross Income (MAGI). MAGI changes to key factors in the eligibility calculation: the definition of household (affecting whose income counts in the eligibility calculation) and what applicants can deduct from income in calculating eligibility. The changes in eligibility calculation will not affect people with special needs.
In addition to the Individual Mandate taking effect, in 2014 members who receive coverage through Non-Grandfathered health plans will begin to see the majority of the provisions of the Affordable Care Act go into effect.
Other important changes to health plans include the removal of annual or lifetime limits. This means that insurers can no longer cancel coverage if the insured spends more than a specified dollar amount in a year or in a lifetime. Insurers also cannot cancel you for any diagnosis. Adult children must be covered until age 26. Non grandfathered plans also must cover preventive services at 100% with no cost sharing requirements. These services include adult and child immunizations, breast and colon cancer screenings and certain lab tests.
To get more information about your plan and whether it is a grandfathered plan, contact your plan administrator or your Local Union office.