About Us
Overview of the Affordable Care Act (ACA)
The Patient Protection and Affordable Care Act (ACA), also known as Obamacare, is the comprehensive health care reform legislation enacted in 2010 by the federal government.
Different pieces of the ACA have been implemented since the legislation passed, but in January 2014 a number of the major tenets will go into effect and have a significant impact on state and local governments, organizations, and individuals.
The ACA expands coverage and improves affordability in California by allowing the state to increase what services are covered, providing funding for California to expand eligibility for the Medi-Cal program, and establishing a health insurance marketplace that gives California residents greater ability to choose the health care plan that best suits their needs and preferences.
Minimum Essential Coverage
Beginning in January 2014, all health plans in the United States must cover these 10 essential health benefits:
- Ambulatory patient services
- Emergency services
- Hospitalization
- Maternity and newborn care
- Mental health and substance use disorder services, including behavioral health treatment
- 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.
Employers Must Offer Health Coverage
Employers with more than 50 full-time employees must offer employees a health insurance plan that pays for at least 60% of covered health care expenses for a typical population, AND, that isn’t more than 9.5% of the employee’s family income (see Note below). Smaller employers (less than 50 full-time employees) are exempt, but can receive tax credits for offering health insurance plans to employees.
Click here for more information on small business health coverage options.
This tenet of the ACA (employer mandated offer of coverage) has been delayed until 2015.
Note: The Health and Human Services department determined that all estimates for a typical population would be based off of the average 2009 premium for a preferred provider organization under employer-sponsored coverage, using an average population of people under age 65. (Source: Kaiser Family Foundation, “What the Actuarial Values in the Affordable Care Act Mean”, April 2011)
Individuals Must Obtain Coverage: “The Individual Mandate”
Beginning in January 2014, every individual, including children, must obtain health insurance with minimum essential coverage of services. There will be a penalty imposed upon individuals who have not obtained health insurance. The penalty will increase each year and will be withheld from an individual’s federal income tax return.
Exceptions to the Individual Mandate
Some individuals may not be fined if they do not have health insurance. These include those who:
- Cannot find insurance that costs less than 8% of their household income
- Are undocumented immigrants
- Are Native Americans
- Object to health insurance on religious grounds
- Are incarcerated
- Have incomes below the threshold for filing a tax return
New Rights and Protections
The following new protections from the ACA began rolling out in 2010. All of the protections will be in place on January 1, 2014
- A selection of preventive care and women’s services are now free (See Appendix C).
- Group health plans cannot exclude enrollees under age 19 based on preexisting conditions. For other plans, all pre-existing condition exclusions must be removed beginning in 2014.
- Insurers can no longer cancel coverage due to mistakes in forms, procedure, etc.
- Insurance companies must publicly justify any unreasonable rate increases.
- Insurance companies must spend at least 80% of the cost of consumers’ premiums on health care (not administrative costs).
- Individuals can seek emergency care at a hospital outside of their health plan’s network.
- Consumers have a right to ask their plan to reconsider when it denies payment for specific services.
Click here for more information.
* Source: Kaiser Family Foundation, 2013. “The Requirement to Buy Coverage Under the Affordable Care Act.”
Next Section: Changes to Health Care Coverage Across California