Frequently Asked Questions

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Frequently Asked Questions About ObamaCare

Beginning in 2014, the Affordable Care Act includes a mandate for most individuals to have health insurance or potentially pay a penalty for noncompliance. Individuals will be required to maintain minimum essential coverage for themselves and their dependents. Some individuals will be exempt from the mandate or the penalty, while others may be given financial assistance to help them pay for the cost of health insurance.


ACA/ObamaCare Mandated Health Insurance

What is the penalty for not having the mandated health insurance?

The penalty is the greater of (note, there is a dollar amount cap on families)

For 2014, $95 per uninsured person or 1% of household income
For 2015, $325 per uninsured person or 2% of household income
For 2016 and beyond, $695 per uninsured person or 2.5% of household income

Is anyone exempt from purchasing the mandated health insurance?

Yes.

Individuals who have a religious exemption
Those living outside the United States or its territories
Non-U.S. citizens
Incarcerated individuals

Are there exceptions to the penalty for not having health insurance?

Yes. A penalty for not having the mandated health insurance will not be assessed on individuals who:

Cannot afford coverage based on formulas contained in the law (percentage of income),
Have income below the federal income tax filing threshold,
Are members of Native American tribes,
Were uninsured for short coverage gaps of less than three months;
Have received a hardship waiver from the Secretary, or are residing outside of the United States, or are bona fide residents of any possession of the United States.

Am I buying government health insurance on the online marketplace?

No. Insurance purchased through an exchange is provided by private insurance companies – not the government. The government may provide financial assistance for people who need help paying for healthcare coverage and expanded eligibility for public insurance programs like Medicaid.


Choice of Provider / Ob-Gyn Direct Access

Can any participating primary care provider be chosen as a primary care provider?

Yes. A plan that provides for designation of a primary care provider must allow the choice of any participating primary care provider who is available to accept the participant, beneficiary or enrollee, including pediatricians.

Can a plan require members to obtain a referral or prior authorization before seeking care from a participating ob/gyn provider?

No, a plan may not require authorization or referral for a female patient to receive obstetric or gynecological care from a participating provider and must treat their authorizations as the authorization of a primary care provider. A plan may, however, require prior authorization before providing benefits for certain services, such as a uterine fibroid embolization procedure.


Clinical Trials

What are the new coverage requirements?

Most clinical trials involve drugs or devices, and those drugs or devices are generally provided without cost during the trial period. Effective January 1, 2014, ObamaCare requires that if a “qualified individual” is in an “approved clinical trials,” the plan cannot deny coverage for related services. For example, if the member requires temporary hospitalization or monitoring in connection with the trial and there is a charge for those services. Plans are not required to cover treatments that fall outside the designated class of approved clinical trials, and plans may not deny coverage because a member is participating in an approved clinical trial conducted outside of the state in which the member lives.

What is a “qualified individual”?

A “qualified individual” is someone who is eligible to participate in an “approved clinical trial” and either the individual’s doctor has concluded that participation is appropriate or the participant provides medical and scientific information establishing that their participation is appropriate.

What is an “approved clinical trial”?

“approved clinical trial” is defined as a Phase I, II, III or IV clinical trial for the prevention, detection or treatment of cancer or other life-threatening condition or disease (or other condition described in ObamaCare, such as federally funded trials, trials conducted under an investigational new drug application reviewed by the FDA or drug trials exempt from having an investigational new drug application). A life-threatening condition is any disease from which the likelihood of death is probable unless the course of the disease is interrupted.

What are “routine patient costs”?

“Routine patient costs” include all items and services consistent with the coverage provided in the plan that is typically covered for a qualified individual who is not enrolled in a clinical trial. Routine patient costs do not include 1) the investigational item, device or service itself; 2) items and services that are provided solely to satisfy data collection and analysis needs and that are not used in the direct clinical management of the patient; and 3) a service that is clearly inconsistent with the widely accepted and established standards of care for a particular diagnosis. Plans are not required to provide benefits for routine patient care services provided outside of the plan’s network area unless out-of network benefits are otherwise provided under the plan.

May a plan require a qualified individual to participate in a trial through a participating provider?

Yes. If a participating provider is participating in an approved clinical trial, the plan may require the individual to participate in the trial through that participating provider if the provider will accept the individual as a participant in the trial. Plan sponsors should review their process and procedures related to clinical trials to ensure that their practices comply with ObamaCare, and consult with their own legal counsel.


Dependent Coverage

Does this provision impact current plans or just new plans? Does the dependent coverage requirement apply to all markets?

For plan years starting six months after ObamaCare’s enactment (i.e., Sept. 23, 2010), all plans providing dependent coverage are required to make that coverage available to adult children — both married and unmarried — up to age 26. Until 2014, grandfathered group plans are not required to offer coverage to dependents who are eligible for employer coverage other than through their parent.

Does the dependent mandate apply to married children?

Both married and unmarried dependents qualify for this dependent coverage. Coverage of the dependent’s spouse or children is not required.

Does it apply to grandfathered plans?

This provision applies to both new and grandfathered plans. However, for plan years before January 1, 2014, grandfathered group health plans may exclude an adult child if the adult child is eligible to enroll in an employer-sponsored health plan other than a group health plan of a parent.* Beginning in 2014, grandfathered group plans must comply with the requirement and children up to age 26 can stay on their parents’ employer plan even if they have other employer-sponsored coverage available.

* Verification of whether an adult child on a grandfathered plan is eligible to enroll in an employer-sponsored health plan other than a group health plan of a parent is considered a complex eligibility scenario/rule that the employer is required to enforce and administer.

When will dependents who would meet the new provision of the federal law be allowed to enroll for coverage? How do I get my 21 year old onto my insurance plan?

The law requires that an enrollment opportunity be provided not later than the first day of the first plan year beginning on or after Sept. 23, 2010 and continue for at least 30 days.
A notice regarding this opportunity must be provided and may be included with other enrollment materials if it is prominent. Coverage, if elected, must be effective on the first day of the first plan year on or after Sept. 23, 2010.
For most plans, this above requirement will be met through the open enrollment process. On an ongoing basis, enrollment could also occur during a subsequent open enrollment or due to a qualifying event.

Exactly when does coverage cease per dependents?

ObamaCare specifies that the coverage must continue until the dependent’s 26th birthday.

Default (at the end of the month during which the dependent turns 26), or
Any applicable state mandates, or
Customer election, if it can be administered (which can include variations such as termination upon the next billing cycle).
Whichever rule is the most generous will be applied.

If a dependent is covered by a parent’s plan and a spouse’s plan, which plan pays first?

The NAIC rules for order of benefit determination are applied to determine which of the plans should be the primary payer.

Can I get coverage even though I recently graduated from college and am no longer on my parents plan?

Yes. Check with your insurance company to see if they will provide that coverage to you now. If not, watch for the special open enrollment period and sign up then.

Does the young adult provision apply to plans or issuers that do not provide dependent coverage?

No. There is no federal requirement compelling a plan or issuer to offer dependent coverage at this time. However, the vast majority of group health plans offer dependent coverage and many family policies exist in the individual market.


Existing Insurance Coverage

I’m covered by a Medicare HMO which served my health very well. Will I be able to maintain the same coverage I have now that health insurance reform is implemented?

Seniors continue to have a choice when they turn 65 and beyond, to enroll in the traditional Medicare plan or to enroll in a Medicare HMO or Medicare Advantage Plan. Medicare Advantage plans will continue to offer services to beneficiaries.

Companies currently choose whether to offer Medicare Advantage plans. Some may make the business decision to exit the market, but nothing in health reform forces these plans to stop offering benefits and services.


Health Insurance Marketplace / Exchange

What Does Actuarial Value mean?

Under ObamaCare, four plan levels were developed based on percentages, or actuarial values. Actuarial value relates to the percentage ratio of what your health insurance carrier is responsible for paying within your selected health plan. These four levels are referred to as the metallic plans: Bronze (60%), Silver (70%), Gold (80%), and Platinum (90%). As plans increase in actuarial value they cover a greater share of your medical expenses overall.

For example, if a plan has an actuarial value of 60% (Bronze) the insurance carrier is responsible for (on average) 60% of the health care expenses and the consumer is responsible for the remaining 40%. This 40% is a combination of deductibles, co-pays, and co-insurance on a yearly basis to the maximum out-of-pocket amount per the metallic plan. The ratio for the Silver Plan is 70/30. The insurance carrier will pay (on average) 70% of the expenses and the consumer will pay 30% of the expenses.

What do they mean by Metallic Plans?

The four metallic plans (Bronze, Silver, Gold, and Platinum) represent the actuarial value of health insurance plans under ObamaCare. ObamaCare specifies a benchmark level of coverage for the purposes of premium tax credits (subsidies) using actuarial values The Bronze plan represents the minimum level of coverage most people are required to maintain under ObamaCare. However, premium tax credits will be tied to the Silver plan level. Premium tax credit amounts will vary depending on where your income falls within the Federal Poverty Level calculations.

The calculator also illustrates premiums and subsidies for Bronze plans, which have an actuarial value of 60%.

What’s a Health Insurance Marketplace? What’s a Health Insurance Exchange?

Health Insurance Exchange or Marketplace: a new competitive insurance marketplace where consumers can compare and purchase affordable and qualified health insurance beginning in plan year 2014.

What’s an Open Enrollment Period?

This is the period of time set up to allow you to choose from available plans, usually once a year. Under the new ObamaCare, open enrollment for consumers through the Marketplace/Exchange will begin October 1, 2013 for plan year beginning January 1, 2014.

Who can Qualify for a Premium Tax Credit (Subsidy)?

People purchasing coverage on their own (without access to health insurance through their employer, Medicare and Medicaid) will be eligible for a “premium tax credit” (government subsidy) towards their health insurance premiums based on income. Subsidies will be provided to people with a total family income between 100% and 400% of the federal poverty level.

Tax credits will only be available to those purchasing coverage through the state- or federally facilitated-exchanges. Also, tax credits are tied to a benchmark level of coverage based on actuarial value. When the Exchange determines that a person is eligible for a tax credit based on expected income, and that person enrolls in coverage, subsidies will be paid directly to insurers to lower the cost of premiums (and in some cases cost sharing).

Regardless of the level of actuarial value, insurers will have to cover a defined set of health care services and cap the total amount of cost sharing required of consumers at defined levels.

How do I apply for a Premium Tax Credit (Government Discount)?

If you receive or can you receive affordable employer-sponsored health insurance, Medicaid or Medicare you are not eligible for a premium tax credit.

To determine if you are eligible for a premium tax credit and for how much, you must first complete a multi-page application that captures the enrollees’ household income and number of dependents. Household income includes incomes of the taxpayer, spouse, and dependents. The Exchange, via the application, will then verify the information through the Social Security Administration and the IRS. Once the application process has been completed and the enrollee is found eligible for premium tax credits, then the enrollee will be able to select and purchase health insurance through the Marketplace with the premium costs offset by the tax credit.


Health Reform Information

What is the Affordable Care Act/ObamaCare?

The major goals of the Affordable Care Act (ACA also known as ObamaCare) are to reform the current healthcare system by providing affordable, minimum essential coverage to all legal Americans. And it is also supposed to reduce costs of insurance premiums to millions of families and small businesses. ObamaCare wants to put individuals, businesses, and small business owners in control of their own healthcare.

What is the Federal Poverty Level?

The Federal Poverty Level (FPL) varies by family size. In 2013, the 100% FPL for a single adult is $11,490 and $23,550 for a family of 4. The poverty level is estimated yearly based on Congressional Budget Office projections of inflation.

What is Medicaid?

Medicaid is a government funded /state-run program that provides free or low-cost health insurance to low-income individuals, families, and children. For many eligibility groups, income is calculated in relation to a percentage of the Federal Poverty Level (FPL). For example, in 2013, 100% of the FPL for an individual is $11,490 and for a family of four is $23,550 (excluding Alaska and Hawaii).

How does Medicaid relate to exchange subsidies?

Medicaid eligibility varies by state and is generally limited to certain categories of people (e.g., children, parents, people who are disabled, and people age 65 or older). Under ObamaCare, states have the option to expand Medicaid eligibility to everyone with incomes below 138% of the federal poverty level.

What is The Children’s Health Insurance Program?

The Children’s Health Insurance Program (CHIP) is a state and federal partnership program that works closely with Medicaid. It provides low-cost health insurance coverage for children in families who earn too much income to qualify for Medicaid coverage but can’t afford to purchase private health insurance.

What is Medicare?

Medicare is health insurance primarily for individuals 65 years of age and older, some people under 65 with certain disabilities, and all those with end-stage renal disease.

What is a full-time employee?

For purposes of ObamaCare’s employer mandate, a full-time employee is an employee who performs, on average, at least 30 hours of service per week.


Insurance Premiums

How do premiums vary by location?

As under the status quo, ObamaCare permits premiums to vary by geographic area, reflecting the fact that the cost of living and health care expenses vary significantly by location. Premiums also vary by location within states, so the range across communities nationwide is larger than the statewide averages suggest.

Premiums in the calculator are based on estimates of average premiums nationwide. Therefore, actual premiums may be higher or lower, depending on where you live.

How do premiums vary by age?

Beginning in 2014, ObamaCare limits the degree to which premiums may vary by age. The premium for someone who is 64 years old may not be more than three times the cost of a 21 year old. This means that premiums for older people may be lower than under the status quo while premiums for younger people may be higher.


Lifetime and Annual Limits

Lifetime Limits

When does the prohibition on lifetime maximums go into effect? Do lifetime maximums apply to grandfathered plans or only to new plans?

Lifetime limits on the dollar value of essential health benefits are prohibited for plan years beginning September 23, 2010. This applies to all plans both new and grandfathered.
Plans may apply lifetime per-beneficiary limits on any “non-essential” health benefits.
Benefits may be entirely excluded for a condition without being subject to lifetime limit rules.

What happens to people who have reached a lifetime limit?

The regulations create special enrollment or reinstatement rights for people who have reached a lifetime limit on a prior plan.
People whose coverage or benefits ended due to application of a lifetime limit on a prior plan should have been notified in writing of their right to reenroll or be reinstated.
People should have been offered a 30-day special enrollment period. Coverage, if elected, should have been effective on the first day of the first plan year on or after 9/23/10.
The notice should have been prominently located in materials and distributed prior to the first day of the first plan year on or after September 23, 2010.
Special enrollees should have been offered all benefit packages available to similarly situated people, without higher premium or cost share.
Under most plans, individuals who exceed their lifetime maximum often receive a limited auto-restoration benefit. Those members would have been eligible for re-enrollment into full coverage.

Annual Limits

When does the prohibition on annual limits go into effect?

For plan years beginning January 1, 2014, plans (excluding grandfathered individual plans) will be prohibited from placing annual limits on the dollar value of essential health benefits.
Grandfathered individual plans may keep the annual limits in effect as of March 23, 2010.
Day, visit and frequency limits are not subject to the annual limit rules.
Plans may have per-beneficiary annual limits on any non-essential health benefits.
Benefits may be entirely excluded for a condition without being subject to annual limit rules.
To provide a transition period, the regulations allow plans to include restricted annual limits on essential benefits, which increase until they are eliminated completely in 2014. This table identifies the minimum restricted annual limits allowed by the law for plan years beginning on or after the dates shown:

Plan Year Begins Minimum Annual Limit
9/23/10 $750,000
9/23/11 $1,250,000
9/23/12 $2,000,000

It is important to note that most plans do not have system capability to support these restricted annual limits for essential benefits, and we will not be offering this option.

We have removed annual dollar limits for all plans at the plan level beginning with plans new or renewing on or after September 23, 2010. We also have removed annual dollar limits from all essential benefits.
We do not have system capability to support restricted annual limits for essential benefits.

Can a plan accumulate all benefits (essential and nonessential) toward the restricted annual limit?

No. The regulation states that a plan may only take essential benefits into account when determining whether an individual has received benefits that meet or exceed the restricted annual dollar limit.

Are internal limits permitted, if in the aggregate they add up to the minimum restricted annual limit?

At this time it does not appear that internal limits lower than the restricted annual limits are allowed on essential health benefits.

Are lifetime and annual limits on out-of-network services permitted in plans that offer coverage for in-network and out-of-network services?

No. The regulations do not exempt out-of-network benefits from the restriction on lifetime and annual limits. The DOL has confirmed verbally that the annual limit restriction and the


Minimum Essential Coverage and Essential Health Benefits

What does Minimum Essential Coverage mean?

Minimum essential coverage is the level of health insurance coverage that is sufficient to satisfy the individual mandate under ObamaCare. This minimum level will be required by all insurance plans beginning in plan year 2014.

What are Essential Health Benefits?

ObamaCare defines “essential health benefits” as a set of 10 health care service categories that must be covered by all health insurance plans offered through the Exchange beginning with plan year 2014.

These categories are:

  • Ambulatory patient services
  • Emergency services
  • Hospitalization
  • Maternity and newborn care
  • Mental health and substance abuse disorder services
  • Prescription drugs
  • Rehabilitative and habilitative services and devices
  • Laboratory services
  • Preventive and wellness services and chronic disease management
  • Pediatric services, including oral and vision care
How does “Minimum Essential Coverage” differ from “Essential Health Benefits”?

Essential health benefits are required to be offered by certain plans starting in 2014 as a component of the essential health benefit package. They are also the benefits that are subject to the annual and lifetime dollar limit requirements.

This is different than minimum essential coverage, which refers to the coverage needed to avoid the individual mandate penalty. Coverage does not have to include essential benefits to be minimum essential coverage. Also, minimum essential coverage does not include health insurance coverage consisting of excepted benefits, such as dental-only coverage.

When does the mandate to include the essential health benefit package take effect?

The effective date in ObamaCare begins January 1, 2014.


Pre-Existing Conditions

I have a pre-existing condition. How can I get coverage?

If you have been uninsured for six months and have a pre-existing condition, you now have access to health insurance that was not previously available to you through the Pre-Existing Insurance Plan (PCIP) program. The Pre-Existing Insurance Plan (PCIP) program provides insurance for Americans who are uninsured and have a pre-existing condition. This program provides temporary protection for people with pre-existing conditions until 2014.

Under ObamaCare and beginning with the 2014 plan year, insurance companies will no longer be able to deny insurance coverage based on a pre-existing condition.

Can I now get coverage for my 6-year-old who has a pre-existing condition?

It is illegal for health insurance companies that cover children to deny coverage to your child based on a pre-existing condition for enrollees under age 19. This applies to all new employer plans, new plans in the individual market, and existing employer plans. Tthe requirements do not apply to individual grandfathered plans.


Preventive Care

ObamaCare requires non-grandfathered plans to provide coverage for “preventive care”. This coverage must be provided without cost sharing (e.g., coinsurance, deductible or copayment) for services provided in network. Interim final regulations were issued on July 14, 2010 and further clarify the requirements for preventive care. An amended interim final regulation was issued August 1, 2011, allowing for certain religious exemptions related to contraceptive services, and a final regulation was issued on February 15, 2012 confirming the exemptions. Also, on February 10, 2012, guidance was issued on the temporary safe harbor for certain entities that are not otherwise exempt from the contraceptive coverage mandate.

Does ObamaCare require coverage of preventive care?

All non-grandfathered group health plans (insured and self-funded) and non-grandfathered individual policies issued or renewed on or after September 23, 2010 must cover preventive services without cost share (e.g., coinsurance, deductible or copayment). With respect to the new guidance issued August 1, 2011 on women’s preventive health services, these preventive services are generally applicable to non-grandfathered plans with effective or renewal dates on or after August 1, 2012.

What services are considered preventive care?

ObamaCare defines preventive care services as follows:

  • Items or services recommended with an A or B rating by the U.S. Preventive Services Task Force
  • Immunizations recommended by the Advisory Committee on Immunization Practices of the CDC
  • Preventive care and screenings for infants, children and adolescents supported by the Health Resources and Services Administration
  • Preventive care and screenings for women supported by the Health Resources and Services Administration per the August 1, 2011 guidance:
    • well-woman visits
    • screening for gestational diabetes
    • human papillomavirus DNA testing
    • counseling for sexually transmitted infections
    • counseling and screening for human immune-deficiency virus
    • contraceptive methods and counseling*
    • breastfeeding support, supplies and counseling
    • screening and counseling for interpersonal and domestic violence
    • *A final regulation was issued on February 15, 2012 confirming an exemption for certain religious employers with respect to coverage of contraceptive services, effective August 1, 2011.
Do plans have to comply with notice requirements related to the designation of primary care provider and the direct access requirements for ob/gyn care?

Yes. Under the Final Interim Rules, the plan or issuer that requires or allows for designation of a PCP must provide a notice informing each participant of the terms of the plan or health insurance coverage regarding designation of a primary care provider, including designation of pediatricians for children. In addition, plans that cover ob/gyn care and require designation of a PCP must inform each participant (in the individual market, primary subscriber) that the plan may not require authorization or referral for obstetrical or gynecological care by a participating health care professional who specializes in obstetrics or gynecology. This notice must be provided whenever the plan or issuer provides a participant with an SPD or other similar description of benefits.


Wellness

What is the “wellness program”?

The wellness program established under health reform law does not apply to the individual market in all states. A 10-state pilot program will be established by July 2014 to permit participating states to apply similar rewards for participating in wellness programs in the individual market. If the Secretaries of HHS and Treasury determine that the pilot program is effective, the pilot program may be expanded to include additional states in 2017.


ACA Calculator

Does the calculator provide definitive estimates of what people will pay under ObamaCare?

No. The calculator is intended to illustrate how families in varying circumstances may be affected by the tax credits and limits on age rating included in the law. Premiums will vary from region to region and based on assumptions insurers make in setting premiums. In addition to what people would pay in premiums, they would also have out-of-pocket expenses for cost sharing (e.g., deductibles and coinsurance), which in some cases would be subsidized based on income. In addition, there are many other factors that could increase or decrease how much people pay, including efforts to make the health care system more efficient and additional revenue measures to finance the federal cost of reform.