The Patient Protection and Affordable Health Care Act frequently asked questions (FAQ)

Many people have many questions about the recently passed health reform legislation known as the Patient Protection and Affordable Health Care Act (PPACA).

Here are some answers to some frequently asked questions gathered from various sources.

Where does Asuris stand on health care reform?
Asuris supports ensuring long-term health care security and stability for all Americans. We will do all we can to ensure the critical elements of this bill succeed. That includes eliminating pre-existing barriers to coverage, making medical care more efficient, and modifying the system to be simpler and more transparent.

While we've long been an advocate for reform and support many of the new law's provisions, we also have some concerns regarding the ever-present challenge of cost containment. We will continue working closely with lawmakers, policymakers and our trade associations to develop recommendations for addressing these issues.

We have been monitoring and evaluating reform proposals since federal legislative action began. While there are many details that have yet to be determined, we stand ready to help our members navigate through these changes.

When does the new law take effect?
The new bill has many provisions, which are being phased in.

A preliminary set of changes take effect for plans purchased or renewed after September 2010, including reforms that will make it easier for parents to cover adult children, harder for insurance companies to cancel health policies, and more economical for small employers to cover employees. In addition, children with pre-existing conditions will have more health plan choices and immediate coverage. Source: Oregon Department of Consumer and Business Services Federal Reform Q&A

Do health insurers have to accept everyone now?
The big changes in the law—the ones that could affect tens of millions of people—don't kick in until 2014. Those include insurance marketplaces called 'exchanges'; rules requiring insurers to accept all applicants, even those with health problems; and an expansion of state Medicaid programs. Source: Kaiser Health News

What will happen to my premiums?
That's difficult to say, but most are expected to continue to increase in coming years.

The bigger question is what happens to rising medical costs, which drives up premiums. Even proponents of the new bill acknowledge that efforts in the legislation to control health costs won't have much of an effect for several years.

The nonpartisan Congressional Budget Office estimated that by 2016, an average individual policy provided by a large employer would cost about $7,300 a year (and slightly more for workers at small companies). An average family policy would cost about $20,300 a year (and slightly less for workers at small companies). As now, those premiums would probably be split between employers and employees.

By comparison, in 2009, the average employer-provided individual policy cost $4,824 a year, and the average family policy cost $13,375, according to an annual survey by the nonprofit Kaiser Family Foundation. Source: LA Times, Kaiser Health News

Is it true that everyone has to buy health insurance?
Not until 2014. Then, all Americans will be required for the first time to obtain insurance or face an annual penalty. There will be exemptions, e.g. low-income people. Source: Associated Press

Who gets subsidized insurance?
Aid is available on a sliding scale for households based on the federal poverty level. Source: Associated Press

What does the new law mean for kids and families?
It will affect families differently, depending on their incomes, home states, and job situations. In general, the health care reform bill expands coverage for kids, adolescents, and young adults. Source: Christian Science Monitor

I have two children, both in their early 20s, graduating from college. They aren't on my health insurance now. Once this law takes effect, can I put them on my policy?
Yes, you can add your children to your policy when your existing health plan renews. The federal reforms allow children to stay on family policies until age 26. No such requirement exists today, and many policies end dependent coverage before this age.

Here is what the federal government has said to date about this new protection:

• Adult children who are on their parents' plan now but who lose that coverage when they graduate from college can rejoin their parents' policy after Sept. 23, 2010, when the plan renews.
• Existing employer plans that offer dependent coverage will not have to keep adult children on the plan up to age 26 if those adult children can get coverage through their own employer. This changes in 2014, when all children up to age 26 can stay on their parents' employer plan even if they can get coverage through their own employer.
• Both married and unmarried children qualify for this dependent coverage.
• The Secretary of Health and Human Services will issue regulations that define "dependent" children. Source: Oregon Department of Consumer and Business Services Federal Reform Q&A

I own a business. Am I now required to provide health insurance for my employees?
Starting in 2014, employers with 50 or fewer workers would be exempt from coverage provisions. If you have more than 50 employees, and do not offer health insurance as a benefit, and at least one of your full-time employees gets a subsidy from the federal government to purchase health insurance on his or her own, you would have to pay a fee of $2,000 for every one of your full-time workers. (Company accountants take note: you could subtract the first 30 of your employees from that assessment.) Also, even if you do offer coverage, you might have to take some extra action to help any of your low- or middle-income workers who want to buy insurance on their own. Source: Christian Science Monitor

I have a small business. Can you explain the small business tax credits?
Retroactive for premiums paid beginning in January 2010, small businesses with the equivalent of 25 or fewer full-time eligible employees may get a federal tax credit of up to 35 percent of their premium costs if they meet the following requirements:

• The average annual wage is less than $50,000.
• The employer contributes at least half of the premium cost.
• The coverage meets minimum standards.

The IRS will administer this program. For information on the amount of the potential tax credit, how to count employees, and other details, consult your tax advisor or review the information posted on IRS.gov. Source Oregon Department of Consumer and Business Services Federal Reform Q&A

What are the rules for preexisting conditions?
Outlawing denial of insurance coverage to those with preexisting conditions is one of the most popular provisions in the entire 2,000-plus-page legislation.

The rollout starts with children. Six months from the day the bill was signed (Sept. 23, 2010), insurers will no longer be able to exclude children with preexisting conditions from being covered by their family policy. For current policies, that means insurers will have to rescind preexisting-condition exclusions.

Insurers will not have to take the same steps for adults until Jan. 1, 2014. Source: Christian Science Monitor

If the rules for preexisting conditions don't go in effect until 2014, what are people with health problems supposed to do between now and then?
The new reform law does create a temporary backup plan for those uninsured who have health problems.

This Plan B is a short-term, national high-risk insurance pool. US citizens and legal immigrants who have preexisting conditions and have been uninsured for at least six months will be eligible to enroll in this pool and receive subsidies to help them afford the premiums.

Under the law, the premiums for this pool will be the same as would be charged for a standard population of people with varying risks. Maximum out-of-pocket cost sharing for enrollees will be $5,950 for individuals and $11,900 for families, per year.

This risk pool is supposed to be up and running within 90 days and then fade into the sunset on Jan. 1, 2014. Source: Christian Science Monitor

I'm over 65. How will the legislation affect seniors?
The Medicare prescription-drug benefit will be improved substantially. This year, seniors who enter the Part D coverage gap, known as the "doughnut hole," will get $250 to help pay for their medications.

Beyond that, drug company discounts on brand-name drugs and federal subsidies and discounts for all drugs will gradually reduce the gap, eliminating it by 2020. That means that seniors, who now pay 100% of their drug costs once they hit the doughnut hole, will pay 25%.

And, as under current law, once seniors spend a certain amount on medications, they will get "catastrophic" coverage and pay only 5% of the cost of their medications.

Meanwhile, government payments to Medicare Advantage, the private-plan part of Medicare, will be frozen starting in 2011 and cut in the following years. If you're one of the 10 million enrollees, you could lose extra benefits that many of the plans offer, such as free eyeglasses, hearing aids and gym memberships. To cushion the blow to beneficiaries, the cuts to health plans in high-cost areas of the country such as New York City and South Florida—where seniors have enjoyed the richest benefits—will be phased in over as many as seven years.

Beginning this year, the law will make all Medicare preventive services, such as screenings for colon, prostate and breast cancer, free to beneficiaries. Source: Kaiser Health News

For more information, we suggest checking your state insurance commissioner's web site.

About Asuris Northwest Health
Asuris Northwest Health offers a full range of health care coverage options, including dental coverage, for eastern Washington employers and individuals. We also offer Medicare supplemental plans and Medicare Part D prescription drug coverage, and provide member access to more than 20,000 health care providers. Asuris is committed to improving the health of our members and our communities, and to transforming our health care system. For more information, please visit www.asuris.com or www.twitter.com/AsurisNWHealth. Asuris Northwest Health, a nonprofit health plan, is a subsidiary of Regence BlueShield, a leading health plan in Washington.

This information is printable and for external purposes. This information is current as of April 21, 2010 and should not
be construed as legal advice or a contractual obligation.

« Back to Employer Communications