The Affordable Care Act, aka Obamacare, has been the law of the land since 2010. This means that most of the most important parts of the mandate have already been in put into effect. However, with so many changes and updates being implemented on an annual basis it can get confusing as to what portions are valid and to what extent versus those that are still being overhauled or have yet to be executed in full.
In order to make it easier to understand the requirements and by-laws that are currently valid, let’s take a look at the parts of Obamacare that are in effect right now.
Young Adults Provision
This section of the law was put into effect almost from the start and it has become one of the many advantages that families in particular have enjoyed under the mandates of the Affordable Care Act. This new requirement states that individual and group health insurance policies must cover young adults age 26 and under on their parents’ plans.
The provision was put into place because this demographic is the most likely to be uninsured due to the cost of premiums or a belief that they don’t need coverage. If these individuals can remain insured as dependents on their parents’ policies, this will go a long way towards making sure that young adults have some form of sufficient coverage.
Premium Dollar Spend Provision
This portion of the Affordable Care Act was also put into effect early on as it provides a requirement for insurance companies to account for the amount of money they spend on actual services and quality of those services derived from monthly premiums. The minimum percentage allowed under the law is 85% for large group plans and 80% for individual and small group plans each year.
Should a company’s percentage fall below those minimums, then that company must provide its customers with rebates. With this provision in place, it ensures that the insurance companies are using the majority of their premiums on health care services to consumers instead of CEO’s lining their pockets with that revenue.
Under the new law, insurance companies are no longer allowed to charge higher fees or premiums based on the gender of the consumer. Women have often been expected to pay more for their health insurance policies because they are typically more likely to use benefits as a result of pregnancy.
Companies must now offer plans at the same price for both men and women. In addition, more preventive services are now accessible along with prenatal and postnatal care, all of it covered by most plans as mandated by Obamacare. This gender provision also extends to age and health status as well, both of which were used as a reason to charge higher premiums to certain consumers.
Preventive Care Provision
Women aren’t the only group who are being given renewed access to preventive care under the Affordable Care Act. The law now mandates all insurance plans to provide coverage for preventive health services without any out of pocket costs from the consumer. This requirement also extends to patients who are covered by Medicare. Ever since this portion of the law was put into effect as of 2011, the rules governing the type of preventive care that is expected to be covered have been defined by the Department of Health and Human Services.
Removal of Restrictions Provision
This is one of the foundational portions of the Affordable Care Act upon which the law is largely based and implemented. This provision lifts many of the restrictions and limitations that have long been determining factors to denying consumers health coverage in the past.
Under the new law, any policy issued or renewed after September 23, 2010 may not place lifetime coverage limits on any individual, may not cancel coverage should a person become seriously ill (unless insurance fraud has been committed), and deny coverage to children or adults with any preexisting conditions. All of these were committed with common practice by insurance companies prior to the enactment of the Affordable Care Act, a major reason why insurance reform was so necessary in the United States. In addition, the Department of Health and Human Services has also set limits as to the extent of annual limits that may be implemented on healthcare plans for individual customers.
Employee Mandate Provision
You may be familiar with the Individual Mandate which requires most American citizens to have some form of healthcare under the standards of minimum sufficient coverage. There is also an Employer Mandate that provides a set of requirements for businesses and firms to offer coverage to full time employees.
Under this provision, any company with 50 or more full time employees must offer healthcare plans to no less than 95% of their workers and all dependents under the age of 26 years. Larger firms employing 100 or more employees must also provide coverage to a minimum of 95%. Failing to comply will result in a penalty assessment for each employee not covered. Any company with 49 or fewer full time employees are exempt from the mandate and therefore will not be responsible for any fines.
Small Business Tax Credit Provision
The Affordable Care Act already mandates that many businesses must provide a percentage of their workforce with sufficient healthcare coverage. However, this provision also offers small businesses with fewer than 50 full time employees an incentive to offer health plans to their employees even though these companies and organizations are exempt from the employer mandate.
The Obamacare guidelines define a small business as any entity that employs 25 workers or less whose annual wages average less than $50,000. Any small business that elects to offer coverage to its workforce are allowed to claim a federal income tax credit of up to 35% of the costs to establish a healthcare insurance plan. The tax credit provision was added to the law to incentivize small business owners to do their part in helping all eligible American citizens get covered.