Affordable Care Act January 2014 Effective Provisions

By Bonnie Bochniak
Vice President, Government Relations
MBPA/MFBA

Jan. 30, 2014 – Here at the Michigan Business and Professional Association (MBPA), our government relations team and support staff have been working around the clock as changes to the Affordable Care Act (ACA) have been made. We have dedicated a specific website unlike any other to help you better understand the law and how it impacts you and your business.

It has been a long journey for the ACA to finally make its debut on January 1, 2014. This past January 1st has been a long standing kick-off date for this new healthcare law, despite its over 50 provisions that have already been put into effect. Together with the general public, businesses, and of course, our elected officials, there have been countless hearings, testimonies, interviews, speeches, and the list goes on, discussing and continuing to debate this topic and its intended and unintended consequences.

Now that the first of the year has passed, we wanted to review some of the provisions that have begun. For most, this is just a review, but for new businesses, this is critical information. Please see below.

January 1: Insurance coverage purchased either through the Federal Health Care Marketplace or through a State Based Exchange (SBEs) by December 24, 2013 became active. Companies with 50 full-time equivalent employees (FTEs) or fewer (in Michigan; 100 in some other states) that that signed up for coverage for their employees through the Small Business Health Options Program (SHOP) Exchanges will also see their coverage become active. This enrollment in Michigan was achieved by filling out paperwork and sending to the federal government or calling the healthcare.gov line directly (online enrollment available late November 2014). Many insurers have reported problems with the enrollment data that they have received from the federal government website that have included missing data and duplication. This has proven difficult to confirm whether healthcare enrollments are accurate and complete. As individuals show up at their doctor’s offices, hospitals or pharmacies, they will quickly find out whether their coverage is active or not.
 
January 1: Eligible employers that purchase health insurance for their employees in the SHOP Exchange may receive a tax credit up to 50% of the employer’s contributions toward health insurance premiums. The credit will only be available to an employer for two consecutive tax years.
 
January 1: The individual mandate goes into effect. Nearly all U.S. citizens and legal residents are required to carry health insurance that meets minimum standards or face a “shared responsibility payment.” Tax returns filed in 2015 will need to include information regarding health insurance carried. The ACA allows for a 3-month lapse in coverage in a year before a penalty is assessed. Therefore individuals without coverage will have until March 31, 2014 to sign up in order to avoid the fee. Those who had healthcare coverage that was cancelled as a result of the ACA will be exempt from the penalty this year.*
 
January 1: Insurers may no longer deny coverage for pre-existing conditions or because of the applicant’s health status or other factors. Employer group health plans may not impose annual dollar limits on essential health benefits. Plans must limit annual participant out-of-pocket maximums to $6,350 for single coverage and $12,700 for family coverage. Totals include copayments and deductibles but not premiums, and apply only to plans that are not grandfathered.
 
January 1: Financial assistance through tax credits and subsidies will be available for lower income individuals who purchase health insurance coverage through an Exchange. Credits are available for people with incomes above Medicaid eligibility and below 400% of the poverty level who are not eligible for or offered other acceptable coverage through their employer. The credits and subsidies apply to both premiums and cost-sharing. Individuals that receive either too much or too little in premium subsidies during the year will have those differences reconciled with the IRS in April 2015.
 
January 10: In most cases, individuals who signed up for insurance through the Marketplace (i.e., either the Federal or State exchanges) by December 24, 2013 have until January 10, 2014 to pay the first month’s premium in order to receive coverage for the month of January. Individuals should check with their insurance company, since some are not expected to honor the grace period, or actually give additional time to make payments.
April 1: Lower income individuals who didn’t qualify for Medicaid in the past will now have access to coverage in states that expanded their Medicaid safety net program. Twenty-five states (including Michigan) and the District of Columbia expanded Medicaid under the Affordable Care Act. Households with incomes between 100 and 138% of the Federal Poverty Level (FPL) are eligible for subsidized health coverage through the Medicaid program.

*Note: Individuals whose healthcare coverage was cancelled as a result of the ACA will be exempt from the individual mandate penalty for the year 2014.  Unless further legislative or executive action is taken, penalties begin again for these individuals January 1, 2015.

As always, please contact our government relations team with any questions, suggestions, or general comments. We are here to help guide you through the ACA and will continually keep you up to date as more changes occur. You can contact us by email, phone, or via the web. Email: bbochniak@michbusiness.org; Phone: 586-393-8800 or web: http://michbusiness.org.