Affordable Care Act

What it means going forward

national Health Care, ObamacareOn September 23, 2010, new reforms under the Patient Protection and Affordable Care Act (PPACA) Obamacare, became law. Over the next several years, massive changes will continue to be implemented and the law will most certainly evolve. With all the noise and debate the real question is: Do you know how it will affect you, your employees, your company now and in the coming years? It is our business to know the nuances of the current landscape and guide you down the smoothest roads. It's probably something you might want to have a conversation about with an expert.

What Are The Key Points You May Want To Know?

  • What about Subsidies?
  • What's the difference between buying a policy On or Off Exchange?
  • What about the “Cadillac Tax”
  • When do I get a non-compliance penalty?
  • How do I qualify for a 'Special Enrollment'?
  • How does COBRA fit?

Use the tabs below to get answers




Enhanced Access to Insurance
New and renewing plans may no longer have Pre-Existing Conditions limitations for children under 19.
Small Business Tax Credit
A tax credit up to 35 percent is allowed on an employer’s contribution providing health insurance for employees. A credit of up to 25 percent is available for small non-profit organizations.
Prohibiting Rescissions
Prohibits abusive practices whereby health plans rescind existing health insurance policies when a person gets sick as a way of avoiding covering the costs of enrollees’ health care needs.
Elimination of Lifetime Limits and Restricting Use of Annual Limits
Health plans will no longer have annual or lifetime limits on coverage for all employer plans and for new plans in the individual market.
First Dollar Coverage for Preventive Health Services
All health plans will be required to provide first dollar coverage for Preventative Care Services, such as immunizations, Screenings and routine care for adults and children.
Dependent Coverage Extended to Age 26
Requires that all plans in the individual market and employer plans include dependent coverage, for young adults to age 26
Improving Consumer Information through the Web
Requires the Secretary of Health and Human Services (HHS) to establish a website for people to search for health insurance coverage options, in their home state.
Rebates for the Part D “Donut Hole”
A $250 rebate is available for Medicare Part D enrollees, eliminating the coverage gap that occurs between $2,700 and $6,154 in total drug costs.
Expanded Adoption Credit and Adoption Assistance Program
Provides adoption assistance exclusion by $1,000.
Low Interest Loans Encourage Students to Pursue Health Care Careers
Expands programs, scholarships and loan repayment options for health students and professionals.
Tanning Tax
A 10 percent tax is levied on indoor tanning services.


Insurers Must Spend Majority of Premiums Received on Benefit Payments
Health insurers, including grandfathered plans, will have restrictions on profits and amounts that may be spent on administration. Consumer rebates will be required if less than 80 to 85 percent of premiums are not used to pay for medical benefits.
Free Preventive Health Coverage
There will be no charges for annual wellness visits, personalized prevention plan services and tobacco cessation services for pregnant women.
Discounts in the Medicare Part D “Donut Hole”
Offers a 50 percent discount on all brand-name drugs in the so-called prescription drug “donut hole” and phases in further discounts on all drugs to completely close the “donut hole” by 2020 for all Part D enrollees.
Reporting Health Coverage Costs on FormW-2
Employers must disclose the value of the benefit provided by the employer for each employee’s health insurance coverage on the employee’s annual Form W-2.
Standardizing the Definition of Qualified Medical Expenses
Sets the definition of qualified medical expenses for Health Savings Accounts (HSA), Flexible Savings Accounts (FSA) and Health Reimbursement Accounts (HRA) to the definition used for itemized deductions. Over-the-counter medicine will no longer qualify as eligible expenses.
Increased Additional Tax for Withdrawals from Health Savings Accounts and Archer Medical Savings Account Funds for Non-Qualified Medical Expenses
Penalty tax on Health Savings Account withdrawals prior to age 65 for funds not used for qualified medical expenses rises from 10 to 20 percent. The tax for Medical Savings Account withdrawals not used for qualified medical expenses increases from 15 to 20 percent.
Cafeteria Plan Changes
A Simple Cafeteria Plan will allow small businesses to set up tax-free benefits for their employees, which will reduce the administrative burden of sponsoring a cafeteria plan. The provision also exempts employers who make contributions for employees under a simple cafeteria plan from non- discrimination requirements applicable to highly compensated and key employees.


Health Flexible Savings Account Contributions Will be Reduced to $2,500 Per Year
CPI will index contributions for subsequent years.
Eliminating Deduction for Employer Part D Subsidy
Employer subsidy for prescription drug plans for employees eligible for Medicare Part D eligible retirees will end.
Increased Threshold for Claiming Itemized Deductions on Medical Expenses
The income threshold is raised from 7.5 to 10 percent. Individuals over 65 can claim the itemized deduction for medical expenses at 7.5 percent of adjusted gross income through 2016.


Guarantee Issue Coverage
Insurance companies may not refuse to sell or renew policies due to an individual’s pre-existing health conditions, or to charge a higher rate due to heath status, gender or other factors.
Annual Limits on Payments Eliminated
Coverage for Individuals Participating in Clinical Trials Guaranteed
Health plans can’t deny coverage for individuals participating in clinical trials, including routine care.
Health Insurance Exchanges
Health Insurance Exchanges are to be established in each state. Tax credits will be offered for people meeting income tests
Multi-State Option
Coverage may be available through nationwide health plans offered under the supervision of the Office of Personnel Management. At present, insurance is only offered by individual states.
Free Choice Vouchers
Workers who qualify for an affordability exemption, but not tax credits, can use employer contributions to join a Health Insurance Exchange plan.
Individual Responsibility
Most individuals will be required to purchase health insurance or pay a penalty of $95 for 2014, $325 for 2015, $695 for 2016 (or, up to 2.5 percent of income in 2016), up to a cap of the national average cost of a bronze plan premium. Families pay half the amount for children, up to $2,250 per family. After2016, dollar amounts are indexed.
Employer Responsibility
All employers with 50 or more employees must offer to pay $2,000 annually for coverage over the first 30 as long as one of their employees receives a tax credit. Waiting period to join a plan is limited to 90 days. Employers offering coverage, where employees receive tax credits must pay $3,000 for each worker receiving a tax credit up to an aggregate cap of $2,000 per full-time employee.
Increased Access to Medicaid
Medicaid eligibility will increase to 133 percent of the poverty level for all non-elderly individuals.


Independent Payment Advisory Board
A newly created Advisory Board must submit proposals to Congress to extend the solvency of Medicare, lower health care costs, improve quality and efficiency and expand access to evidence-based care.
Value-Based Compensation for Physicians
A value-based bonus program is created to promote increased quality of care for Medicare beneficiaries.


Excise Tax on Employer-Provided Health Plans
Employer coverage will face an excise tax if any plan that costs in excess of $27,500 (family coverage) and $10,200 (single coverage), increased to $30,950 (family) and $11,850 (single) for retirees and employees in high risk professions, indexed for inflation. This may be adjusted using the age and gender demographics of a national risk pool.