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The Affordable Care Act (ACA imposes the Individual Mandate which require you to be covered by Minimum Essential Coverage (MEC) or pay a tax penalty (shared responsibility payment) on your federal tax return.

Insurance policies that meet the MEC requirement are considered a Qualified Health Plan (QHP) therefore they must provide all Essential Health Benefits, follow established limits on cost-sharing (like deductibles, copayments, and out of pocket maximum amounts), and meet other requirements as required by ACA, including guaranteed coverage regardless of pre-existing conditions and Medical Loss Ratio (MLR) refund rules.

Unless you’re covered by an existing government, military or tribal plan, you must be covered by a MEC plan or pay a tax penalty on your federal tax return.  For plan year 2015 the penalty is $325 for individual, or 2% of your income up to a maximum of $975, whichever is greater.  Gor plan year 2016 the penalty is $695 for an individual or 2.5% of your income up to a maximum of $2,085, whichever is greater.

What is the Employer Mandate?

The Employer Mandate defines Shared Responsibility rules for employers with more than 50 Full Time Equivalents employees (FTE) to make available affordable Minimum Essential Coverage (MEC) to all employees working 30 hours or more per week. If the employer is non-compliant with the Shared Responsibility rules they must pay a $2000-$3000 per employee penalty, depending on the violation. The Employer Mandate and it’s penalties were postponed until 2015.

What is the Individual Mandate?

On January 1, 2014, the Individual Mandate applies to most US citizens and requires that every household purchase Minimum Essential Coverage or pay a penalty tax that is due with your federal tax return. There are premium and cost sharing subsidies for households with income below 400% of Federal Poverty Level (FPL) and Medicaid for people with income below 138% of FPL

What is the Required Contribution Percentage?

The Required Contribution Percentage (RCP) is the maximum percentage of income that is subject to health insurance premiums. RCP ranges from 2% – 9.5% of income for household income is between 138% and 400% of the Federal Poverty Level (FPL).

What is the Advanced Premium Tax Credit (APTC)?

The Advanced Premium Tax Credit is a government subsidy to provide health insurance premium assistance. To qualify, household income must be between 138% and 400% of the Federal Poverty Level (FPL). The tax credit will come in the form of an advanced tax credit paid directly to the insurance company that issues your plan.

What are Cost Sharing Reductions (CSR)?

The Advanced Premium Tax Credit is a government subsidy to provide health insurance premium assistance. To qualify, household income must be between 138% and 400% of the Federal Poverty Level (FPL). The tax credit will come in the form of an advanced tax credit paid directly to the insurance company that issues your plan.

What is the Federal Poverty Level (FPL)?

Federal Poverty Level (FPL) is a benchmark using the poverty guidelines issued by the Department of Health and Human Services (HHS) in order to determine financial eligibility for certain federal programs. The 2014 FPL for a 1 person household is $11,670. Alaska’s FPL is $14,580 and Hawaii is $13,420.

What is Minimum Essential Coverage (MEC)?

Minimum Essential Coverage satisfies the Individual Mandate and is defined as coverage under certain government sponsored programs, employer sponsored plans, individual medical plans, grandfathered plans and other plans recognized by HHS.

What are Metal AV plans?

The “Metal Plans” Platinum (90%), Gold (80%), Silver (70%) and Bronze (60%), refer to the 4 different levels of Actuarial Value (AV) that each plan must cover. In other words, a Silver (70%) plan must pay at least 70% of of covered charges.

What is a Qualified Health Plan?

A Qualified Health Plan (QHP) is a health plan issued on the public exchange eligible for premium and cost sharing assistance. In order to qualify for APTC or CSR subsidies a QHP must be purchased on the public exchange.

What is the difference between public exchanges and private exchanges?

The public exchanges exist to validate eligibility for government assistance subsidies and coordinate payment of the subsidies with the insurance carrier that issues the plan. Many insurance carriers do not offer their plans on the public exchange. Private exchanges offer both subsidized plans and non-subsidized plans, in addition to other benefits such as accident, dental and vision.

When is Open Enrollment, Initial Enrollment and Special Enrollment?

In order to signup for a health insurance plan you must enroll in 1 of the 3 enrollment periods. If you miss the enrollment period you will not be able to signup for a health insurance plan, and must wait until the next enrollment period. Initial Enrollment will start October 1, 2013 and end March 31, 2014. Open Enrollment will occur each year from November 15 through February 15 of the following year. In 2015 the Open Enrollment will be from November 1, 2015 and end on January 31, 2016. In 2016 the Open Enrollment will be November 1, 2016 and ends on January 31, 2017.  Special Enrollment will start when you have a “Qualifying Life Event” and will extend for 60 days. If previous coverage was Medicaid or CHIP the Special Enrollment Period will extend for 60 days.

Can I be denied because of pre-existing conditions?

The Affordable Care Act mandates all individual and small group plans guarantee issue, regardless of pre-existing conditions.

How much do these cost?

Rates vary depending on age, tobacco status, location, insurance carrier, metal plan and household income.

What if I can’t afford these plans?

You may qualify for the APTC premium assistance subsidy, Medicaid or CHIP. Medicaid is a government entitlement program for the poor, and does not cost anything. In addition CHIP is Medicaid for children and may cost little to nothing.

What are the new Medicaid eligibility guidelines?

Starting January 1, 2014 Medicaid eligibility will simplified for all states that have chosen to expand Medicaid under the Affordable Care Act. The minimum eligibility level of 138% of Federal Poverty Level (FPL) is now available for nearly all Americans under age 65. There is also non-financial criteria such as state of residency, immigration status and U.S citizenship.

What is the Children’s Health Insurance Plan (CHIP)?

The Children’s Health Insurance Program (CHIP) provides health coverage to children of families with incomes too high to qualify for Medicaid, but can’t afford private coverage.

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