Since its rocky rollout in October, the Patient Protection and Affordable Care Act (commonly known as Obamacare) has been the subject of controversy and debate. But much of this has obscured the simple fact that, despite a number of changes that have been made to the law in recent months, the ACA’s major provisions still remain in force.
Here are 4 things about the ACA that you should be aware of as we near the end of the open enrollment period at the end of March:
1. March 31st is the deadline for purchasing a qualifying health insurance plan or paying a penalty. If you do not have qualifying health insurance through your employer, Medicare, Medicaid or a military or veteran’s plan, you must have coverage under a qualifying plan by April 1, 2014. Otherwise, you will have to pay a penalty equal to 1 percent of your taxable income or $95 per adult or $47.50 per child, up to a maximum of $285 per family (in 2014), whichever is greater.
In 2015, the penalty rises to the greater of 2 percent of your taxable income or $325 per adult or $162.50 per child, up to a maximum of $975 per family. And in 2016, the penalty rises to the greater of 2.5 percent of your taxable income or $695 per adult or $347.50 per child, up to $2,085 per family. After 2016, the penalty will be increased annually based on cost of living adjustments (or COLAs).
2. There are some exemptions to the requirement to purchase a qualifying health insurance plan. If you have household income above 400 percent of the federal poverty level and health insurance will cost more than 8 percent of your taxable income (after accounting for employer contributions or tax credits), you may be exempt from paying the penalty. You can also apply for an exemption if you have financial hardships or religious objections or are an American Indian, uninsured for less than three months, an undocumented immigrant, or incarcerated.
3. You can no longer be denied health insurance due to a pre-existing condition. This is one of the central tenets of healthcare reform: Insurers can no longer reject you for coverage due to a pre-existing health condition like high blood pressure or diabetes. Nor can they issue you a policy that excludes coverage for specific health conditions.
4. While your premium can’t be increased due to a disease, it can be increased from year to year. When your health insurance policy comes up for renewal, your insurer cannot increase your premium if you have been diagnosed with a disease over the past year. But your insurer can increase your premium as part of an across-the-board rate hike for all policy holders.
This could happen if insurers determine that they are paying out more in claims on marketplace policies than they originally anticipated. Any premium increases must be communicated to you during the open enrollment period for the following year, during which time you will have the option of choosing a different (and perhaps less expensive) plan for next year, if one is available.
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