PPACA Brief Summary

The health reform law known as Obamacare was signed as the Patient Protection and Affordable Care Act of 2010. On March 23 of that year, new rules were introduced both immediately and gradually over the next decade.

A controversial law, often viewed as a Democratic decision and President Barack Obama’s signature legislative accomplishment, reforming the American healthcare system was in the works as a bipartisan effort even before Obama was elected president.

During the course of the PPACA’s implementation, the term “Obamacare” was coined by opponents of the law. The administration then decided to embrace the name, and use it in a positive light for it’s own support.

By imposing new taxes and requirements on nearly every American, and by highlighting the divide between political parties, the Affordable Care Act quickly grew to historical proportions. Everyone is required to get insured, insurers can’t deny anyone coverage, and lower-income households can get help paying for policies.

 

What the ACA Means for You

Uninsured Individuals

The healthcare law attempts to make it easier for people to get insured if they don’t have coverage through an employer or government-sponsored health plan. Where the private individual insurance market may have been too costly before, the ACA created a discounted option through the health insurance marketplaces.

If your income is between poverty level and four times the current poverty guideline ($11,670 to $46,680 for an individual), you may qualify for a subsidy to reduce premiums and cost sharing. Subsidies only apply to policies purchase through your state’s marketplace.

Why sign up for health insurance? Firstly, it’s responsible, and secondly, it’s required. The Obamacare law requires all individuals to have health insurance or be penalized.

Starting in 2015, all taxpayers must report their insurance status on their federal tax return. If you don’t have a policy, you’ll have to pay an additional tax based on your income.

It’s also easier to get insured under the ACA due to the elimination of medical underwriting. This means insurers cannot deny you coverage or raise your rates because you have a medical condition.

Insurers are also prohibited from discriminating against applicants for their gender or occupation, which previously resulted in a rate increase like poor health. Instead, insurers can only rate up for age and tobacco use.

 

 Employers

If you’re an employer, the health law makes it mandatory to offer coverage to full-time workers. Not so different from before, but it’s not an option beginning in 2015.

Large companies of 50 or more full-time workers are required to offer a group health plan to each full-time equivalent employee (those that work 30 or more hours per week on average) that covers at least 60 percent of annual costs. If you own a company of this scale, you may have already jumped on the bandwagon and cut health benefits for part-time workers, a common theme in preparing for the employer mandate.

In 2018, the law imposes an exise tax on employers who offer generous policies that are too high-end by the law’s standards. These are referred to as “Cadillac” health plans, and exceed an annual limit of $10,200 for individuals and $27,500 for families.

If an employer offers such coverage, which is often very helpful to workers, they must pay a tax of 40 percent of any dollar amount over the cap of excess health spending, as determined by the ACA.

Trader Joe’s, Papa John’s, Sea World, Walmart, Target, and Home Depot each blamed Obamacare for needing to cut part-timers or health benefits due to the employer mandate or the Cadillac tax.

Timeline of PPACA