Health Insurance Reform - Frequently Asked Questions
Please choose from the following FAQ Categories:
Why does the law require me to either purchase health insurance coverage or pay a tax?
The key goal of the federal health care reform law is to ensure that nobody may be denied coverage or be priced out of coverage due to a health problem. If people are allowed to wait until they have a health problem to purchase insurance, the health insurance market simply will not work. There would be a small number of very expensive choices, since insurance companies will assume that people won’t buy insurance until they are sick. This would make insurance unaffordable to responsible middle or lower income citizens. So, the law requires that everyone have minimum coverage – or pay a tax if they do not purchase coverage, creating a larger pool of both sick and healthy individuals.
What is a health insurance “exchange”?
The law requires states to establish insurance marketplaces known as “exchanges” by 2014. All legal state residents will be able to enroll in qualified health plans through the exchange. You may click here to learn more what Pennsylvania is doing with regard to insurance exchanges.
Will I be required to give up my current coverage?
No. Health plans in effect as of March 23, 2010, are grandfathered under the law and will be considered “qualified coverage” which means they meet the mandate to have health insurance that begins January 2014.
Will my health insurance premiums continue to go up?
The new law is designed to prevent unreasonable and unexpected spikes in premiums and, over time, to slow the growth in health care spending. Cost savings and responsible cost-sharing are built into these reforms. As health care spending is likely to continue rising faster than general inflation, some individuals and families with health problems could see their premiums decrease significantly under the new rating rules, though for most Americans premiums will continue to increase from year to year.
Can I still have a Health Savings Account (HSA)?
Yes. The new law does not infringe upon the ability of an individual to contribute to a Health Savings Account (HSA), or discourage an individual from doing so. The minimum level of coverage required to meet the individual mandate was specifically designed to allow for the purchase of a qualified high deductible plan that would complement the HSA.
People Without Health Insurance:
I want health insurance but can’t afford it. Will this law help me get coverage?
Certain individuals may be eligible for a subsidy which will help pay the premium cost of these plans. Beginning in 2014, depending on your income, you may receive a subsidy in the form of a tax credit to help you pay for health insurance.
If I don’t currently have health insurance, do I have to buy it now?
In order for the reforms to work, consumers have a personal responsibility to purchase health insurance. By 2014, when more affordable options will be available, most Americans will be required to have health insurance or be subject to a tax.
I don’t have insurance because I have a pre-existing condition. What will this law do for me?
You may be able to take advantage of PA Fair Care. PA Fair Care is Pennsylvania’s health plan for uninsured adults with pre-existing conditions. This temporary plan offers transitional insurance coverage until the broader coverage provisions of federal health insurance reform come to fruition in January 2014. Premiums are capped at the average cost of private coverage in our state's individual market. PA Fair Care will not be able to cover everyone, but it is a start towards coverage for all.
People With Health Insurance (including individual, family and employer-based coverage):
Will my insurance coverage or my premium be changing?
It is unknown yet how everyone’s insurance costs will eventually change. While healthier people might end up paying more, sicker people may be paying less. Insurance companies will no longer be allowed to charge older people more than three times what a younger person is charged.
Will my insurance policy still have a lifetime cap or annual limit of coverage?
All lifetime caps and most annual limits were eliminated for policies issued or renewed on or after Sept. 23, 2010.
Will my insurance company be able to rescind (cancel) my coverage when I get sick?
For plan years beginning after Sept. 23, 2010, the law prohibits insurance companies from rescinding insurance coverage after you are diagnosed with an illness. Exceptions would be in cases of intentional fraud or misrepresentation.
What should I do if my insurance company rescinds my coverage?
If your insurance company “rescinds,” or retroactively cancels, your health insurance coverage, the company will be required, in plan years beginning after Sept. 23, 2010, to provide advance notice of its intention to do so, and may only do so if you committed fraud or made an intentional misrepresentation of an important fact on your application. If your insurance company notifies you that it intends to rescind your policy, and you have not done either of these things, request more information from the company. If you are not satisfied with their explanation, immediately contact us to file a complaint.
When may my 21-year old be added to my plan?
For plan years beginning on or after Sept. 23, 2010, the Affordable Care Act requires that insurance companies and employers providing dependent coverage make that coverage available to adult children of enrollees up to their 26th birthday.
You will be able to enroll your adult child in group coverage at the first open enrollment period following this date. For individual policies, this date is either the annual renewal date or the beginning of the calendar year.
What should I do if my child has aged out of our employer-based policy?
For plan years beginning on or after Sept. 23, 2010, young adults who have already aged off their parents' policies and lack coverage through an employer may be placed back on the parents’ policy during the next enrollment period.
How is the federal law on adult children different from the law in Pennsylvania?
Here in Pennsylvania, our law allows employers, at their discretion, to continue dependent coverage through age 29. So after reaching age 26 – when the federally mandated coverage ends – insurance companies should provide coverage to your adult child if the employer chooses to extend the coverage.
When may I enroll my 10-year-old who has a pre-existing condition?
As of September 23, 2010, children younger than 19 years of age with medical problems will not be subject to pre-existing condition exclusions.
What about a child-only insurance policy?
Child-only policies are not a big part of the Pennsylvania marketplace. Some health carriers announced they would stop offering child-only policies; however, if you currently have a child-only policy in Pennsylvania the insurance company will not cancel your coverage. If the company does try to cancel your coverage, please contact us.
My child is enrolled in CHIP. Will anything be changing?
Current CHIP enrollees will continue to receive coverage through CHIP as they have been. The new law ensures federal funding that extends the program through 2015 and contemplates continuation of the CHIP program at least until 2019. In addition, the federal law has not extended the age limits currently in place.
My family income is about $45,000. My employer does not subsidize our health insurance and we cannot afford it on our own. What will the new law do to make coverage more affordable?
Low- and moderate-income individuals and families whose employers do not subsidize health insurance coverage will be eligible for subsidies to help them purchase coverage through the state exchanges. The amount of these subsidies, which will reduce premiums and out-of-pocket costs (deductibles, co-payments and coinsurance), will depend upon the size of your family and your household income.
How will the new law affect my Medicare benefits?
Your Medicare benefits will not be eliminated or reduced. As of 2010, preventive care services and immunizations are free of co-payments and deductible charges for both Medicare and Medicare Advantage plans.
How does this new law affect my prescription drug coverage?
In 2010, Medicare recipients reaching the “doughnut hole” will receive $250 to help pay for prescription medications. Beginning in 2011, those in the “doughnut hole” will receive a 50 percent discount on prescription drugs and the gap will be phased out until it is eliminated in 2020.
I currently have a Medicare Advantage plan. Will I be able to keep it? What might change?
You will not be required to drop Medicare Advantage coverage. What you can expect to see is more emphasis placed on providing preventive care and wellness benefits in your plan. Remember, Medicare Advantage plans are not guaranteed renewable. Carriers may make changes the end of the year, requiring enrollees to change carriers or return to Medicare.
When will the new preventive care improvements begin?
All Medicare beneficiaries began receiving preventive services without cost-sharing beginning Jan. 1, 2011. In addition, an annual wellness visit to create a personalized prevention plan will now be provided under Medicare.
I have a Medicare Supplement (Medigap) plan. Must I make any changes to my plan under the new law?
No, you are not required to change your Medigap coverage. However, the law will be adding cost-sharing requirements to Plans C and F that are sold after Jan. 1, 2015.
Small Business Owners and the Self-Employed:
What credits or options will be available to me as an employer?
The Small Business Tax Credit has been available beginning with the 2010 tax year. Businesses with fewer than 25 full-time equivalent employees (FTE) and average annual wages less than $50,000 per employee may qualify. To receive the tax credit, an employer must have a group health plan and must pay at least 50 percent of the premium for employees.
The tax credit is equal to a percentage of what the employer pays and is based on the average premium in the small group market in the state. For tax years 2010 through 2013, the maximum credit in each year is 35 percent of the employer’s contributions (25 percent for nonprofit employers). Beginning with tax year 2014, the maximum credit is 50 percent of the employer’s contribution (35 percent for nonprofit employers). The full 35 percent/50 percent tax credit is available for a business with 10 or fewer workers (FTEs) and average annual wages of $25,000 or less. The tax credit phases out completely at 25 workers (FTEs) or average wages of $50,000.
Beginning in 2014, small business owners will be able to purchase insurance for themselves and for their employees through an exchange. Each state will be responsible for maintaining its own exchange system. Eligible employers who purchase coverage through the exchange may receive a tax credit for two years of up to 50 percent of their contribution.
I have five employees. Will I be required to provide insurance for my employees?
No. Employer responsibilities under the health reform law do not apply to businesses with fewer than 50 employees. However, you will be able to enroll your employees in coverage through the exchanges beginning in 2014.
I am self-employed. Will the new law impact my health insurance choices?
Yes, you should have more choices. Beginning Jan. 1, 2014, self-employed individuals and their families must be included in the small group market in all states and will have the option of purchasing coverage through the exchange. This will increase plan choices and include the self-employed in a more stable pool.
How will the bill improve access to preventive care?
Plan years beginning after Sept. 23, must, upon renewal, eliminate any cost-sharing for preventive services covered under the contract.
Will my business be required to drop our current coverage?
No. Group health plans in effect as of March 23, 2010, are grandfathered under the law and will be considered “qualified coverage” that meets the mandate to have health insurance that begins Jan. 2014. Employees and dependents may be added to the policy without losing grandfather status.
May my business continue to provide assistance to my employees through flexible spending accounts?
Yes you may. There is nothing in the new law that eliminates or discourages these options.
I have more than 50 employees. Will I be required to provide insurance for my employees?
Yes. Beginning in 2014, employers with more than 50 employees are required to provide health insurance to their employees.