New online health insurance marketplaces should be open for business as of Tuesday if all goes according to plan, three years after President Barack Obama signed the Affordable Care Act into law.
Local businesspeople and insurance agents gathered last week to learn more about Obamacare from Kelly Fristoe, president of the Texas Association of Health Underwriters, at an event hosted by the El Paso Hispanic Chamber of Commerce.
“There are so many questions,” one participant said, echoing the sentiments of many in the room.
The act is more than 2,000-pages long, and overall, Fristoe said, there are now nearly 20,000 pages of regulations.
“We have the law and the best thing we can do is move forward and understand it, because the more we understand about it, the better we are going to be to make decisions in it,” he said. “Obamacare is the most used word in the media today, but we still don’t know many of the details about it.”
Based on Fristoe’s talk, here are five key questions and answers about Obamacare.
Q: Who can buy subsidized health coverage on the new online marketplaces?
First of all, if you already have health insurance through your employer or are enrolled in a government program, you can stay on that plan if you want to.
You can buy subsidized health care only if you earn less than 400 percent of the federal poverty level and your employer doesn’t offer a “qualified” health plan.
Use the Kaiser Family Foundation’s subsidy calculator online at http://kff.org/interactive/subsidy-calculator to see where your income puts you. In general, the greater your income, the smaller the subsidy.
For example: A “silver” level health plan for a family of four – two adults and two children – with income of $30,000 is expected to cost $6,520 annually. The government tax credit subsidy would cover $5,920 of that cost and the family would be expected to pay $600 per year, according to the calculator.
In Texas, the average premium for the lowest-cost “silver” plan on the online marketplace after government subsidies will be $287 per month for an individual.
For the lowest cost “bronze” plan, it will be $211, according to the U.S. Department of Health and Human Services.
Q: How big are the new penalties and who pays them?
In three months, most individuals will be required to have health insurance or pay a penalty, which means you need to commit to a plan by Dec. 15.
The penalty, to be assessed on 2014 tax returns, will be whatever is greater: 1 percent of your household income or $95 per adult and $47.50 per child, up to a maximum of $285 per family.
The penalties increase every year after that. The penalty in 2016, for example, is whichever is greater: 2.5 percent of your household income or $695 per adult and $347.50 per child, up to a maximum of $2,085 per family.
Penalties are prorated and there is no penalty for a single gap in coverage of less than three months.
Penalties for large employers that don’t provide a “qualified” health plan for workers have been delayed until Jan. 1, 2015. At that time, employers with more than 50 full-time equivalent workers would have to pay a penalty if they don’t offer a health plan to at least 95 percent of their full-time employees.
No penalty is assessed for the first 30 employees that aren’t covered, but after that, the employer would have to pay $2,000 a year for each employee.
For each employee that purchases insurance through the new marketplace and gets a subsidy, the company would pay $3,000.
Employers that fall under the Fair Labor Standards Act are required to notify employees in writing about the new health insurance marketplace by Oct. 1. Yes, that’s Tuesday.
Keep checking the U.S. Department of Labor’s website at www.dol.gov for more information, where you can also find sample notices.
Q: What is a ‘qualified’ health plan?
To be considered a “qualified” health plan, the plan must be affordable, which means the employee’s share of the premium cannot exceed 9.5 percent of their annual household income.
So an affordable annual premium for a family with a $30,000 income would be $2,850, or less.
The plan must also provide minimum value, meaning it must pay at least 60 percent of the total cost of medical services – the so-called “bronze” plan.
And the plan must contain essential benefits, which includes everything from maternity and newborn care to emergency services and behavioral health treatment.
Q: What about my spouse or children?
There is an ambiguity in the health care law some are calling the “family glitch.”
It means that many who don’t have access to affordable health insurance through their employer may also be denied a subsidized policy from the new marketplaces if Congress doesn’t intervene.
Why? Because the Affordable Care Act only considers the cost of covering an individual when calculating whether a plan is affordable or not.
It does not account for the costs of covering a spouse or children, even though family policies are often significantly more expensive than individual ones.
And if your employer offers your family a qualified health plan, neither you nor your dependents can qualify for a subsidized plan on the new marketplace.
Q: What if I have a pre-existing condition?
Beginning Jan. 1, health plans are forbidden from considering your health condition or history.
Email El Paso Inc. reporter Robert Gray at email@example.com or call (915) 534-4422 ext. 105.