Open enrollment for the Affordable Care Act begins Oct. 1. Are you prepared?

By Greg Grisolano, staff writer

When it comes to health care reform, the biggest change will be the transition from viewing health insurance as an elective benefit to viewing it as a necessity.

“Truck drivers are required to carry so many other things that are mandatory: their truck insurance, their different licensing and permits. … (Health insurance) was one of those things that was elective and let go,” said Brenda Smith, OOIDA medical benefits manager.

“They’re no longer going to be able to consider it an elective coverage. They may be able to opt out the first year and pay a penalty, but as this continues to go on down the line, it’s going to get to where they can’t afford the penalties (of not having coverage) and it won’t be feasible for them,” Smith said.

The Patient Protection and Affordable Care Act was signed into law on March 23, 2010. Since then, reforms have been phased in over the last three years.

The next major phase to be implemented will the opening of health care marketplaces or “exchanges” where all Americans who are above the federal poverty line can buy health insurance via an online marketplace through providers who meet the standards of ACA.

Shop around
Arguably, the biggest change for those people who currently don’t have health insurance will be the Oct. 1 open enrollment of health insurance exchanges, according to Meredith Olafson, senior policy adviser at the Small Business Administration.

“Each individual will have to make his or her own decisions about whether or not to purchase health insurance based on their own unique circumstances,” Olafson said in an email to Land Line. “Under the Affordable Care Act, self-employed business owners and all consumers now have more options than ever to find affordable health coverage, and it’s important to know the facts about the choices available.”

Beginning in January 2014, Olafson explained, self-employed individuals and other consumers will be able to purchase their insurance through new Health Insurance Marketplaces, or “exchanges.” All qualified health insurance plans offered in these exchanges will cover a core package of “essential health benefits” ranging from preventive and wellness services to maternity care and mental health services. The plans will vary according to the percentage of costs the health plan covers. In addition, issuers may offer catastrophic-only coverage, which includes free prevention and several primary care visits, primarily to young adults under 30 years of age.

The requirement to purchase health insurance applies only to people who do not currently have health insurance through their employers, or who are not eligible for Medicare, Medicaid, or some form of veterans insurance, Olafson said. The law also provides exemptions for those whose incomes fall below the threshold required for filing a federal tax return.

Olafson also said that individuals may also qualify to get lower costs on monthly premiums when they purchase private health coverage in the marketplace. When you fill out a marketplace application, you will learn whether you qualify for these lower costs. Depending on income, consumers and the self-employed may also qualify for lower out-of-pocket costs, so they won’t have to pay as much for deductibles, co-payments and coinsurance.

Olafson said that the exchanges will allow individuals, for the first time, to shop online and compare coverage plans to best fit their needs as small-business owners.

“Depending on how your business is organized, you will be able to purchase coverage through either the individual marketplace or through the SHOP (small business health options program) marketplace,” Olafson said “In either of these scenarios, you may be eligible for tax credits depending on your income, your business, and a few other factors.  You can learn more about which bucket you are covered by and how to enroll in the marketplaces at healthcare.gov.”

The Small Business Administration notes that another significant change under the Affordable Care Act will be the guaranteed coverage clause, which will require providers to insure the 129 million Americans with pre-existing conditions.

Penalties
According to the Kaiser Family Foundation, a bipartisan advisory group of 17 national leaders and experts in health care and public policy, individuals who are not insured through Medicare, Medicaid, the military or an employer-provided plan would face penalties for being uninsured. In 2014, the penalty would be $95 per adult and $47.50 per child (up to $285 per family) or 1 percent of family income, whichever is greater.

The foundation reports that those penalties increase in 2015 to $325 per adult and $162.50 per child (up to $975 per family) or 2 percent of family income, whichever is greater, before maxing out in 2016 and beyond at $695 per adult and $347.50 per child (up to $2,085 per family) or 2.5 percent of family income, whichever is greater.

Kari Russell, a supervisor in OOIDA’s Medical Benefits Group said she thinks a lot of people will opt to pay the penalty (for the first year).

“They’ve gone without it for this long, what’s $95 if they’re an individual, versus what a monthly premium would be,” she said. “I don’t think we’re going to see as many people immediately jump on that bandwagon. I think a lot of people will sit back and wait and see what rates are going to do.”

Employer-mandate forestalled until 2015 
The White House announced July 2 that it is delaying until 2015 the requirement that businesses with more than 50 employees provide health insurance to their workers or pay a penalty. The announcement came after numerous complaints from businesses that the requirements were too complicated and difficult to implement in time.

Other key parts of the law, including the health exchanges where individuals can buy insurance, are on schedule. The exchanges are on track to open on , Oct. 1, wrote Valerie Jarrett, a senior adviser to President Obama, in a White House blog.

The delay also does not change the individual mandate, which requires most Americans to purchase insurance. Some consumers may receive subsidies to help them pay for the insurance depending on their incomes. The individual mandate takes effect Jan. 1.

Other parts of the law have taken effect since its passage in 2010, including allowing children up to age 26 to remain on their parents’ insurance plans and discounts for prescription drugs for Medicare patients. LL

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