The Affordable Care Act, often referred to as Obamacare, although passed by the Congress in 2010, was designed to be phased in each year with 2016 marked as full implementation. Along the way there have been challenges by some of the states and challenges by Congress; but, alas, the full-blown Affordable Care Act (ACA) has arrived. Each year, portions of this massive healthcare reform act were implemented, and the most significant are as follows:
Patient's Bill of Rights - This provision was designed to protect U.S. consumers from alleged abuses of the insurance industry. It also called for free preventative services to begin for U.S. consumers who become insure. There was also an additional twenty changes included with the 2010 implementations.
Medicare members are offered key preventive services at no cost and receive a 50% savings on brand-name drugs while in the "donut hole." There are an additional eight components that were also implemented in 2011.
This year was all about improving healthcare quality and reducing paperwork and administrative costs in the healthcare industry. 2012 was also the year for the implementation of CLASS, a voluntary long-term care insurance solution. There were also four other major implementations in 2012.
This was the year when open enrollment began for the Health Insurance Marketplace and will be remembered for the many failures of the HealthCare.Gov online portal. There were also four other major implementations that went into effect.
2014 is considered by many to be the year of the consumer. Pre-existing conditions, annual limits of coverage, and clinical trial coverage were the highlights for 2014.
Physicians who provide a higher quality of care rather than volume of care will receive higher payments than physicians who provide a lower quality of care.
2016 is scheduled as the year for complete implementation of the employer mandate:
- Any business that employs at least 50 full-time employees will be required to offer at least 95% of the full-time employees health insurance to avoid penalties.
- The definition of "affordability" is changed to 9.66% of an employee's total household income.
- Employers will be penalized for failure to provide minimum essential coverage to employees or offering an inadequate health plan. The new penalty under section 4980H(a) is increased to $2,160per full-time employee in excess of 30 employees.
- If an employer offers minimum essential coverage the doesn't satisfy the requirements of "Minimum Value and Affordability," a penalty will be levied if a full-time employee receives a premium tax credit to buy insurance on an exchange as a result of the following:
1. The employer health coverage did not offer "minimum value".
2. The employer health coverage was considered "unaffordable."
Challenges Over the Years
Although the ACA was passed by the Congress, it was done so on a razor thin margin and therefore there were many who felt that the massive health care overhaul might not pass constitutional muster, and so challenges were certainly to follow:
- Early on Republicans in 26 states challenged the mandate in the act, saying it was an unconstitutional expansion of federal power. The Supreme Court heard the case and in June of 2012 ruled that it was constitutional.
- In June of 2014 after a case was filed by Hobby Lobby that complained that the ACA forced closely held businesses to violate religious convictions while being required to pay for contraception, the Supreme Court ruled against the ACA.
- In another case in 2015, the Supreme Court ruled that health insurance subsidies could be awarded in states that set up their own and exchanges and in states that did not.
Whatever your feelings are regarding the Affordable Care Act, most can agree that it is a massive piece of legislation that is complex and confusing. To make certain that your business is adhering to the rules and regulations, contact an insurance professional at Skyline Risk Management (718) 267-6600 to learn more about managing your employee benefits.