Key Elements

Key Elements of the Affordable Care Act

The primary goal of the Affordable Care Act (ACA)  is to help millions of Americans obtain health insurance coverage.

To achieve that goal, the Affordable Care Act provides new coverage options, gives consumers the tools they need to make informed choices about their health care coverage, and puts in place strong consumer protections.

You must have Health Insurance or pay a penalty

If you do not have health insurance (specifically, a Qualified Health Plan, or QHP) you will pay a penalty, which will be taken from your tax refund or added as additional tax on your return. The penalty for 2014 was the greater of $95 or 1% of household income reported on the previous year’s tax statement. In 2015, the penalty was $325 per person or 2% of your yearly household income, and in 2016, it is $695 per person or 2.5% of your yearly household income. As time goes on it will continue to be adjusted for inflation.

We encourage you to contact a SASid representative to help you understand the ACA, to see if your existing plan qualifies, to access a new QHP, or to see if your family qualifies for a subsidy provided by the ACA.  We can even estimate your potential tax penalty and see if options other than major medical coverage might make the most financial sense for you.

There are two big ACA insurance changes that will impact you.

The Affordable Care Act includes many provisions aimed at making health insurance coverage more accessible and affordable. Key components of the Affordable Care Act that will affect you are:

  • Health law changes
  • Major consumer protections

Let’s discuss these components one at a time:

1. Health Law Changes in the Affordable Care Act

The health law changes include:

  • Creation of Public Marketplaces (Exchanges):    A marketplace is a mechanism for organizing health insurance options to help consumers shop for coverage in a way that permits easy comparison of available plan options based on price, benefits and services, and quality.  Through these exchanges, individuals who do not have access to public assistance programs or affordable employer-sponsored coverage may compare and purchase plans. Some individuals will be eligible for financial assistance through premium tax credits (subsidies) and/or cost-sharing reductions. REALTORS® Insurance Marketplace provides access to both private and public exchanges so that NAR members can explore their options.
  • Expansion of Medicaid in some states will cover individuals under age 65 whose household incomes are less than 138% of the Federal Poverty Level (FPL).  The 2014 Federal Poverty Level can be found here (click here).  Through the REALTORS® Insurance Marketplace NAR members can see if they may qualify for a state Medicaid program.  If you qualify for Medicaid we will provide you with information on how to take advantage of this coverage.
  • Penalty Mandate: a requirement that requires individuals to maintain minimum essential coverage, qualify for an exemption from coverage, or make a payment when filing their federal income tax returns.  Through the REALTORS® Insurance Marketplace members can get an estimate of the penalty for not acquiring a qualified health plan.

2.   Major Consumer Protections in the Affordable Care Act

The Affordable Care Act includes many provisions designed to help ensure that consumers have access to effective health care coverage, and to limit their costs. Key provisions to understand include:

  • Extension of health insurance coverage to children and young adults up to age 26
  • Expansion of the “guaranteed issue” requirement to ensure that health insurance issuers offer group and individual market policies to any eligible individual in a state, regardless of health status
  • Prohibition on charging consumers a higher premium based on health status or gender (only an additional surcharge can be added for smokers)
  • Elimination of annual and lifetime coverage limits
  • Prohibition on coverage limitations or exclusions based on pre-existing conditions
  • Prohibition on precluding a qualified individual’s participation in an approved clinical trial, or discriminating against that individual based on such participation
  • Introduction of an 80/20 MLR (Minimum Loss Rule) rule to ensure that at least 80 percent of the premium dollars paid to a health insurance issuer are spent on providing health care

Let’s discuss a few of these.

Young Adult Coverage

Under the Affordable Care Act, health plans that cover children must make coverage available up to age 26. Young adults can join or remain on a parent’s plan even if they are:

  • Married (coverage does not extend to married child’s spouse)
  • Not living with a parent
  • Not attending school
  • Not financially dependent on a parent
  • Eligible to enroll in their employer’s plan

Guaranteed Issue and Guaranteed Renewability

The Affordable Care Act requires health insurance issuers to offer all of their individual market and group market plans to any applicant in the state. It also requires health insurance issuers to accept any individual who applies for those policies, as long as the applicant agrees to the terms and conditions of the policy, including the payment of premiums. This provision is called “guaranteed issue.”

Coverage offered through and outside the Marketplaces may restrict guaranteed issue coverage to certain enrollment periods (you can only apply during open enrollment or special enrollment).

Additionally, the Affordable Care Act requires health insurance issuers to offer to renew or continue in force coverage at the option of the policyholder. This is called “guaranteed renewability.”

Coverage of Pre-existing Health Conditions Regardless of Age

The Affordable Care Act prohibits health insurance issuers from limiting or excluding coverage related to pre-existing health conditions, regardless of the age of the covered individual.

Generally, a pre-existing condition is any health condition or illness that was present before the coverage effective date, regardless of whether medical advice or treatment was actually received or recommended.

Nondiscrimination Regarding Clinical Trial Participation

The Affordable Care Act prohibits health insurance issuers from:

  • Precluding participation of qualified individuals in an approved clinical trial
  • Denying, limiting, or placing additional conditions on the coverage of routine patient costs for items and services furnished in connection with participation in an approved clinical trial
  • Discriminating against qualified individuals on the basis of their participation in an approved clinical trial


Frequently Asked Questions

Click on a question below to see the answer and more information on the topic. If you can’t find what you’re looking for call us at 877-267-3752.

How does health care reform affect me?

The Affordable Care Act (ACA) mandates that all Americans must have minimal major medical coverage (this is also known as essential benefits) or pay a penalty. We know that finding the right health insurance can be tough, and that health care reform can be confusing. We understand the mandates of the Affordable Care Act and the ongoing changes in health care reform. Rest assured. We are experts, so you don’t have to be! Give us a call. Our licensed benefit specialists are available to personally consult and advise you on your individual insurance needs. We help NAR members navigate the complex and often confusing world of PPOs, HMOs, HSAs, supplement plans, and more.  We can help you understand what you need to do and the options that are best for your situation.

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What is a Qualified Health Plan?

A Qualified Health Plan, or QHP, is a plan that meets the standards set forth by the ACA.  Only by purchasing a QHP (or continuing on one you’re already a member of) can you escape the yearly penalty. REALTORS® Insurance Marketplace will offer health insurance plans that are certified as qualified health plans, or QHPs. These QHPs must be licensed and accredited, and must meet certain requirements for transparency. To become certified, a QHP must meet a minimum set of criteria, including the following:

  • Coverage, at a minimum, of a comprehensive package of benefits, known as essential health benefits, or EHB
  • Benefit design standards, including non-discrimination requirements and limits on cost-sharing
  • Network adequacy standards
We encourage you to contact a licensed SASid representative at 877-267-3752 who will help you decide which exchange (public or private) and/or health plan is going to suit your needs best. NOTE: Some plans offered on the RIM are not considered QHPs. Purchasers of such plans who don’t also have a QHP will have to pay a penalty.  Sometimes this can be a favorable strategy when looking to save money.

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What are Essential Health Benefits (EHB)?

These are services that Qualified Health Plans (QHPs) are required to cover under the Affordable Care Act.   Essential health benefits, as defined in Section 1302(b) of the Patient Protection and Affordable Care Act, will include at least the following general categories:

  • 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 and chronic disease management
  • Pediatric services, including oral and vision care.
Women’s preventive health services were defined in detail via federal regulations published August 1, 2011, requiring broad coverage, without copayments or deductibles of:
  • Annual preventive-care medical visits and exams
  • Contraceptives (products approved by the FDA) - with exemptions for religious employers and a temporary enforcement safe harbor.
  • Mammograms
  • Colonoscopies
  • Blood pressure tests
  • Childhood immunizations
  • Domestic violence screenings for interpersonal and domestic violence should be provided for all women
  • H.I.V. screenings
  • Breast feeding counseling and equipment, including breast pumps at no charge.
  • Gestational diabetes in pregnant women screening
  • DNA tests for HPV as part of cervical cancer screening
Coverage provided for the essential health benefits package will provide bronze, silver, gold, or platinum level of coverage (described below).  A health plan providing the essential health benefits package will be prohibited from imposing an annual cost-sharing limit that exceeds the thresholds applicable to HSA-qualified HDHPs.   Small group health plans providing the essential health benefits package will be prohibited from imposing a deductible greater than $2,000 for self-only coverage, or $4,000 for any other coverage (annually adjusted thereafter).  Such limits will be applied in a manner that will not affect the actuarial value of any health plan, including a bronze level plan (described below). Consistent with the immediate reforms described above, plans providing the essential health benefits package will be prohibited from applying a deductible to preventive health services. PPACA will require the Secretary to define and periodically update coverage that provides essential health benefits. The Secretary will ensure that the scope of essential health benefits is equal to the scope of benefits under a typical employer-provided health plan (as certified by the Chief Actuary of the Centers for Medicare and Medicaid Services).   A health plan will be allowed to provide benefits in excess of the essential health benefits defined by the Secretary. However, if a state requires such additional benefits in QHPs, the state must reimburse individuals for the additional costs of those benefits.

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What Do the Bronze, Silver, Gold and Platinum designations mean?

All major medical health insurance plans for individuals and small employers will be assigned a bronze, silver, gold and platinum benefit level.  A Catastrophic option will also be available to those under the age of 30. These new Catastrophic, bronze, silver, gold and platinum benefit levels actually refer to a plan’s actuarial value level… or “AV.” You’re probably wondering, What is actuarial value? The easiest way to explain it is to say that it is the percentage of total average costs for the benefits a plan covers within a given year. So, a plan with a 70% actuarial value would typically cover 70% of the costs and the customer would typically be responsible for 30% of the costs after the plan’s out of pocket expenses have been met. The different “AVs” have metallic designations:

  • A bronze plan is 60 percent
  • A silver plan is 70 percent
  • A gold plan is 80 percent
  • A platinum plan is 90 percent
Insurers may also offer catastrophic-only coverage to eligible individuals under the age of 30, which would have higher cost-sharing than the standard Metallic plans. “Metal levels” are designed to allow consumers to compare plans with similar levels of coverage, based on monthly premiums, provider networks, and other factors with the goal of helping consumers make more informed decisions. The graphic below also helps explain these metallic levels:     Metalic Levels    

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What is the difference between a Public exchange and a Private exchange?

The Affordable Care Act provides public exchanges (or marketplaces).  You as a consumer have the option to shop for your health insurance through either type of exchange and there are pros and cons associated with both.  The REALTORS® Insurance Marketplace (RIM) offers both exchanges (public and private). Below is a snapshot of the differences between the Public and Private:

Marketplace Differences

Public

Private

Who sponsors it? Government entity - either a state or the federal government.  Depending on where you live; each state has decided to build its own exchange or default to the Federal.  Insurance agents can offer and enroll consumers into the public exchange. Private company such as the NAR Members health insurance exchange.
What does it offer? Primarily health, dental, and/or vision insurance through multiple carriers which have been approved by the government. Health, dental, vision, plus an array of other insurance products ranging from supplemental to life to critical illness to more - through multiple carriers
Who uses it? Primarily individuals buying insurance and small businesses with up to 100 employees Primarily individuals, self-employed people, employees, and retirees of sponsoring organizations.
Who pays? Consumer, small employer, or both (federal subsidies are available to individuals with household incomes up to 400% of federal poverty level). Consumers (both employed and self-employed individuals) and employers
Is coverage Guaranteed Acceptance? Yes, all plans on the public and private exchanges are guaranteed acceptance (meaning you cannot be turned down based on medical history). Yes, all plans on the public and private exchanges are guaranteed acceptance (meaning you cannot be turned down based on medical history).
 “What types of plans are offered?”  All plans must include minimum essential health benefits.  Plans are from various insurance companies and will offer five levels; Catastrophic (Only available to individuals under the age of 30), Bronze, Silver, Gold, and Platinum. All plans must include minimum essential health benefits.  Plans will vary based on plan design, geographical location, and insurance company.  You will find different insurance companies and offerings on private exchanges.  Many insurance companies have opted out of public exchanges.
Will all insurance companies from my state be represented on each exchange?  I guess the point we are trying to make here is that it is beneficial to explore both public and private exchanges.  No. Some insurance companies have decided to be on the public exchange, others on the private exchange, and still others on both. It is beneficial to explore both public and private exchanges.

No. Some insurance companies have decided to be on the public exchange, others on the private exchange, and still others on both. It is beneficial to explore both public and private exchanges.

In general, private exchanges will offer more selection and options (more plan designs), which means lower costs.  However, you cannot get a subsidy on a private exchange – only on a public exchange.

To see what your state is doing regarding public marketplace (exchange) you should register for a quote on the www.RealtorsInsuranceMarketplace.com website.  We encourage you to contact a licensed SASid representative at 877-267-3752 who will help you decide which exchange (public or private) and/or health plan best suits your needs.

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How do I find my exchange?

You can either go to http://www.realtorsinsurancemarketplace.com/products/member-health-insurance-exchange/ or you can contact SASid's professionally licensed staff at 877-267-3752 for advice and/or direction navigating your options. State-based health insurance marketplaces, or exchanges, are a component of the Affordable Care Act (ACA).   States had the option of a) building a fully state-based marketplace, b) entering into a state-federal partnership marketplace, or c) defaulting to a federally facilitated marketplace. Types of Public Exchanges (Marketplace):

  • StateBased Marketplace (SBM) – State is responsible for all functions (QHP, Premium fees, oversight/Monitoring, eligibility/enrollment, IT, outreach/education, consumer complaint, In‐Person assistance and the call center).
  • Partnership Marketplace – Marketplace is operated by the federal government, however State retains responsibility for Plan Management and/or Consumer Assistance functions.
  • Federally‐facilitated Marketplace – All functions are the responsibility of the federal government.
Remember, products and insurance companies may be different per exchange.

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What and when is Open Enrollment for the Affordable Care Act?

Individuals may enroll in a Qualified Health Plan during various timeframes throughout the year. The timeframes are the open enrollment period, and special enrollment periods (SEP).

  • The Open Enrollment period for 2017 coverage started on November 1, 2016 and runs through January 31st, 2017. During this timeframe you will be able to change your coverage at will, for any reason.
  • SEPs occur throughout the year, based on individuals’ special circumstances.

Special Enrollment Periods

Under certain circumstances, individuals may change QHPs outside of the annual open enrollment period. These SEPs are based on certain triggering events or exceptional circumstances. Events that permit a SEP include, but are not limited to:

  • Gaining or becoming a dependent;
  • Gaining status as a citizen, national, or lawfully present individual;
  • Loss of minimum essential coverage (e.g., loss of Medicaid eligibility, termination of a QHP), except if enrollment is terminated based on failure to pay premiums;
  • Loss of affordable employer-sponsored coverage;
  • Determination that an individual is newly eligible or ineligible for premium tax credits or a change in eligibility for cost-sharing reductions;
  • Permanent move to an area where different QHPs are available;
  • Other exceptional circumstances identified by the Marketplace.

In most cases, SEPs will extend for 60 days from the date of the triggering event. Under certain circumstances, such as the pending loss of minimum essential coverage due to the termination of a QHP, a SEP may begin before the triggering event takes place.

Special Enrollment Period for Marriage

As mentioned in triggering events, a SEP exists for marriage. This means that, if a qualified individual gets married, he or she has the chance to either enroll in a QHP for the first time, or add a spouse to the plan without waiting for the annual open enrollment period.

  • If a marriage occurs and the Individual Marketplace is notified before the last day of the month when the marriage occurred, coverage will begin the 1st of the following month.
  • If a marriage occurs and the Individual Marketplace is notified after the end of the month when the marriage occurred, coverage will begin the 1st of the month following the notification.

The Individual Marketplace would need to be notified within 60 days of a marriage for a spouse to be covered. If the 60-day deadline is missed, the spouse cannot enroll until the plan's annual open enrollment period.

Special Enrollment Period for Birth or Adoption

Another important SEP exists for the birth or adoption of a child.

The effective date of coverage can be the date of the birth or the official date of adoption as long as the Individual Marketplace is notified in a timely manner.

The Individual Marketplace would need to be notified within 60 days of a birth or adoption for dependents to be covered. If the 60-day deadline is missed, the dependents cannot be enrolled until the plan's annual open enrollment period.

Premiums would be pro-rated for the month, based on when the child was added to the policy.

NAR members should contact SASid's professionally licensed staff at 877-267-3752 for advice and/or direction navigating their options.  Products and insurance companies may be different per exchange.

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Could there be rate increases on my health insurance?

Yes. Rates are reviewed on an annual basis and undergo a formal rate review process. All rate increases must be reviewed by the state insurance departments and receive approval before insurance companies can apply them to you. If your plan is going to experience a rate increase, your insurance company will notify you. You will have the opportunity to continue at the increased rate or select a different plan during open enrollment. Renewals take effect January 1st of the following year.

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Can I receive a subsidy for my health insurance under the Affordable Care Act?

Possibly.  It depends on your household income and the number of people living with you. The Affordable Care Act (ACA) includes tax credits or subsidies for individuals and families to use toward qualified health plans found on public exchanges.  Subsidies will be available to qualified individuals and families that have previous reported incomes in the range of 138% to 400% above the Federal Poverty Level.  The below chart shows federal poverty guidelines based on family size:

Eligibility for Premium Tax Credits

Eligibility for the premium tax credit is based on household income and access to minimum essential coverage. The following summarizes the key eligibility standards for premium tax credits (tax credits that reduce the cost of insurance premiums).

You must meet the following criteria to be eligible for a premium tax credit:

  • You are not eligible for minimum essential coverage — including employer-sponsored coverage, Medicaid, CHIP, Medicare, and other forms of coverage — other than through the individual insurance market, unless your employer-sponsored coverage is not affordable or does not provide minimum value (based on by ACA standards).
  • You have an annual household income that is between 100% and 400% of the Federal Poverty Level (FPL), or below 100% of FPL for lawfully present non-citizens who are ineligible for Medicaid by reason of immigration status.
  • You are part of a tax household that will file a tax return for the coverage year and, if the tax household includes a married couple, that will file a joint return
  • You are eligible for coverage through a QHP

If you need guidance on the tax credits and subsidies SASid representatives are available to help you understand your best options.

Below is information on a subsidy estimate tool created by the Kaiser Family Foundation. It will provide you with an estimate tax credit.

The Kaiser Family Foundation health insurance cost and savings calculator

The health insurance costs and savings calculator we link to below provides only an estimate. Your final premiums and costs may differ from the estimates, perhaps significantly, depending on where you live and the coverage you select. You’ll learn your final costs for specific plans when you apply in the Health Insurance Marketplace.

Before you use the Kaiser Family Foundation calculator, there are a few important things to know:

  • The calculator provides a rough estimate of costs for insurance, based on national averages and factors that may not apply to you. It will give you an idea of what someone with circumstances like yours could pay for health insurance.
  • The calculator accounts for some factors that may determine plan costs in the Marketplace: age, family size, and tobacco use. Individual plans will weigh these factors differently to determine final prices.
  • The estimate doesn’t account for differences based on where you live, which will significantly affect Marketplace prices and offerings.
  • The prices are based on a plan in the Silver category. Plans in different categories will likely have higher or lower premiums.  (Plans found on public exchanges offer “metallic plans” with categories of Bronze, Silver, Gold, and Platinum.  These were developed and designed by the government based on essential offerings for qualification.)
  • You won’t be able to get your exact costs for a specific plan until you fill out a Marketplace application during Open Enrollment. Then you’ll see all of the plans available to you, compare features and prices side-by-side, choose a plan, and enroll. You should expect that your final cost will be different from the rough estimate provided here.

The calculator was created by the Kaiser Family Foundation, a non-profit research organization, for use by the general public. The Kaiser Family Foundation is solely responsible for the tool. The Kaiser Family Foundation has no connection with Kaiser Permanente or any health care provider.

SASid did not participate in the creation of this calculator. SASid does not warrant or guarantee the accuracy of estimates provided by the calculator.

If you’re ready to see the estimates, visit the Kaiser Family Foundation website and use the Kaiser Family Foundation’s health insurance costs and savings calculator.

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What do I do if my situation changes during the year?

There are special enrollment periods for people who have life changes or other situations.  These include losing minimum essential coverage; gaining a dependent or becoming a dependent through marriage, birth, adoption or placement for adoption; becoming a citizen, national or lawfully present individual; or becoming newly eligible for a premium tax credit or cost-sharing assistance. If one of these life changes happens to you, you’ll have 60 days to go back to the Insurance Marketplace to enroll in a Qualified Health Plan (QHP). If you missed your 60 days; there are still other insurance plans you can enroll into such as Temporary Health Insurance or REALTORS® Core Health Insurance.  Understand, though, that these plans do not meet the standards of a QHP and a penalty may still apply. Members should contact SASid's professionally licensed staff at 877-267-3752 for advice and/or direction navigating their options.  Products and insurance companies may be different per exchange.

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How does the Affordable Care Act (ACA) affect my HSA?

The Affordable Care Act did make some changes to Health Savings Accounts – also called HSAs – and how they will work:

  1. First, the law eliminated one’s ability to use money in their HSA account to buy over-the-counter drugs.
  2. The second big change is that the law increased the penalty for withdrawing funds from your HSA before you reach age 65. The early withdrawal penalty increased from 10% to 20%.
HSA-compatible plans are available for purchase through public and private exchanges (private only available during the annual Open Enrollment period) such as the REALTORS® Insurance Marketplace.

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Do I need to be on the same health insurance plan as my spouse?

No.  There is no requirement in the Affordable Care Act that spouses be on the same plan. However, if you want to qualify for a premium tax credit to lower the cost, be aware that subsidies are based on your total household income level. So, even though your spouse will not be covered by the subsidized insurance plan, their income will be calculated when determining the level of subsidy for which you are eligible.

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Am I eligible for the Affordable Care Act plans?

Basically, what puts the “affordable” in the Affordable Care Act plans is the presence of subsidies, which are available only on plans purchased via a public exchange. There are eligibility requirements if a person wants to receive these subsidies. To qualify a person:

  • Must live in the U.S.
  • Be a U.S. citizen or national, or be lawfully present in the US
  • Have a household income between 133% and 400% of the Federal Poverty Level and
  • Cannot be currently incarcerated
If you do not meet these requirements, you may still apply for health insurance under the Affordable Care Act, but you would not qualify for government subsidies to help you pay for the coverage.  In this case you are probably better off purchasing through a private exchange during the Annual Open Enrollment period or through a private insurance agent (because there are more plans and carrier options in the private market).

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Can I still go on COBRA?

Yes, regulation has not changed for those who lose their job and wish to stay on their employer’s health insurance plan for up to 18 month – which is essentially how COBRA works. What’s nice about the Affordable Care Act is that is gives people on COBRA the ability to apply for individual coverage without concern that their application can be declined. Plus, people who opt out of COBRA and buy an individual insurance policy may qualify for low-income subsidies to help the pay for cost of their plan.

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Does the Affordable Care Act (ACA) provide any advantages to small businesses?

Yes, depending on your situation, ACA can make it possible for companies that may have previously been unable to afford insurance benefits to now offer it to their employees. Read on to learn more.

Small Business Health Options Program (SHOP) Features

Under the Affordable Care Act, during the first year of operation, small businesses that qualify for coverage through a SHOP will be able to offer their employees a single Qualified Health Plan (QHP) option. SHOPs will offer qualified small groups access to QHPs in each state, and will provide flexibility in the amount that members of the small group contribute toward the total premium. To qualify for SHOP coverage, a business must:
  • Be located in a SHOP's service area (generally a state)
  • Offer coverage to all full-time employees (those working an average of 30 or more hours per week)
  • Have at least one eligible employee on payroll
  • Have 50 or fewer full-time equivalent (FTE) employees on payroll
    • This methodology includes part-time employees, but not seasonal employees (those working fewer than 120 days per year)
    • While the Federally-facilitated SHOPs (FF-SHOP) must determine eligibility using the definitions above, State-based SHOP Marketplaces have flexibility in their counting approaches
The premium tax credits (subsidies) and cost-sharing reductions offered to individuals are not available to employers and families covered through a SHOP. However, employers meeting certain size and average wage requirements-see Shop Benefits section below—may receive a small business tax credit on their tax returns of up to 50% of the employer’s contribution to the premium.  

SHOP Benefits

The SHOP Marketplace provides consumers, both employers and employees, with many benefits. Only QHPs will be offered through the Marketplaces. Buyers will be assured that the available plans meet network adequacy and benefit design standards of the SHOP. Premiums for the employers and employees will not be based on their health or medical history, but can only vary based on age, family composition, geographic area, and tobacco use. A SHOP provides unbiased information and comparison tools for consumers. The tools available through the Marketplaces will help consumers with “apples to apples” comparisons among health plans. The small business tax credit applies to small businesses with up to 25 FTE employees that pay employees an average annual wage below $50,000 and that contributes 50% or more towards employees’ health insurance premiums. NAR members who are owners of small businesses should contact SASid's professionally licensed staff at 877-267-3752 for advice and/or direction navigating their options.  Products and insurance companies may be different per exchange.

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What are Grandfathered Health Plans?

As used in connection with the Affordable Care Act: A group health plan that was created—or an individual health insurance policy that was purchased—on or before March 23, 2010. Grandfathered plans are exempted from many changes required under the Affordable Care Act. Plans or policies may lose their “grandfathered” status if they make certain significant changes that reduce benefits or increase costs to consumers. A health plan must disclose in its plan materials whether it considers itself to be a grandfathered plan and must also advise consumers how to contact the U.S. Department of Labor or the U.S. Department of Health and Human Services with questions. (Note: If you are in a group health plan, the date you joined may not reflect the date the plan was created. New employees and new family members may still be added to grandfathered group plans).

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Do small employers have to pay a tax or penalty for not offering health insurance to employees?

No. Under the Affordable Care Act, businesses with fewer than 50 full-time equivalent employees are not required to provide health insurance to their employees—nor will they face  tax penalties if they decide not to do so.

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Will I qualify for a Premium Tax Credit?

The Affordable Care Act provides a new tax credit to help you afford health coverage purchased through a government Marketplace.  Please contact one of our licensed representatives at SASid to help you determine your options. Premium Tax Credit explained:  Advance payments of the tax credit can be used right away to lower your monthly premium costs. If you qualify, you may choose how much advance credit payments to apply to your premiums each month, up to a maximum amount. If the amount of advance credit payments you get for the year is less than the tax credit you're due, you’ll get the difference as a refundable credit when you file your federal income tax return. If your advance payments for the year are more than the amount of your credit, you must repay the excess advance payments with your tax return.

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Wouldn’t it be better for me to just pay the penalty for not purchasing a Qualified Health Plan?

The answer depends on your personal situation and whether or not you are comfortable paying a tax penalty.  Sometimes it can be favorable for an individual or family to purchase a non-qualified health plan and pay the penalty.  You should contact a SASid representative at 877-267-3752  to discuss your situation. The Affordable Care Act (ACA) includes a provision called the individual shared responsibility payment, or more commonly known as the "individual mandate" or tax penalty. It is applied to individuals and families who do not have a Qualified Health Plan for longer than 3 months (these 3 months do not need to be consecutive), and this took effect Jan. 1, 2014. Estimates from the Congressional Budget Office and Joint Committee on Taxation believe around 6 million Americans will choose to pay a penalty each year instead of purchasing health insurance. Here is what you need to know about the Tax Penalty and how it is applied:   How to avoid the penalty- To avoid paying the tax, individuals and families must purchase a health insurance plan which includes a minimum of 10 essential benefits.  These plans are known as Qualified Health Plans (QHP).  People who have other coverage through their employer or enrolled in government subsidized health plans (Medicare, Medicaid, CHIP, or TRICARE) do not need to worry about the tax. Also, those uninsured individuals with incomes so low they aren’t required to file a federal tax return who cannot find coverage that cost less than 8% of their income do not face a penalty.  Others exempt from the penalty include members of Indian tribes, people whose religion objects to health insurance, undocumented immigrants, Americans living abroad, members of a health sharing ministry and people who are currently incarcerated.   The Penalty Amount- The penalty for going without health insurance is either a flat fee or percentage of taxable income; based on whichever is greater. For 2017, the Flat Fee is $695 per adult and $347.50 per child (up to $2,085) and the Percentage of Income is 2.5%.   Prorated Penalty- If you were uninsured for less than three months of the year you will not need to pay the penalty.  After three months the tax applies to each month within a calendar year that you did not have coverage for yourself or a member of your household.  Insurance companies will provide documentation to prove you had coverage.   No criminal penalties- Individuals who do not comply with the individual mandate to carry a Qualified Health Plan face no criminal penalties or threat of liens and seizures by the IRS.   How is the Penalty Amount Applied?- The penalty will be determined when you file your income tax return and deducted from any potential refund. For 2017 plans, they will look at 2016 modified adjusted gross income (MAGI). The MAGI is different from Adjusted Gross Income (AGI) as it includes other deductions such as tuition fees or up to one-half of self-employment tax.   Should I consider a Non-Qualified Health Plan?- Many people will consider plans which do not meet the 10 minimum essential benefits; referred to as Non-Qualified Health Plans.  These plans include limited indemnity medical, short term medical plans, and others.  Because they do not meet the federal government's minimum standards these plans can be significantly cheaper.  Some experts believe many Americans will purchase a Non-Qualified Health Plan and pay the tax penalty in cost-saving efforts.

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