The Changing Face of Health Insurance in the US
The Patient Protection and Affordable Care Act
is enacted March 23, 2010 (PPACA)
 Main Priorities
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 Expansion of access to health care coverage
 Reduction of premium costs and make coverage
affordable
 Creation of standardized coverage
 Guarantee issue & limited pre-existing
 State/Federal based exchanges where you can
purchase qualified health insurance
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In 2014 all US citizens and legal residents are
required to purchase health insurance or face
a tax penalty
Tax in 2014 is:
 Incomes under $20,000 will pay $95
 Incomes over $20,000 will pay 1% of income
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The IRS will issue notices and attempt to
collect penalties (individuals failing to pay will
not be subject to criminal prosecution)
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In 2015 the tax increases to:
 Incomes below $25,000 will pay $325
 Incomes above $25,000 will pay 2% of income
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In 2016 the tax increases to:
 Incomes below $37,000 will pay $695
 Incomes above $37,000 will pay 2.5% of income
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Incomes below the filing threshold of $9,350 in 2010
have no penalty (this threshold will be higher in 2014
but is not known at this time – indexed based on CPIU each year)
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The penalty for an individual will be capped at
the national average premium for a bronzelevel plan
The CBO (Congressional Budget Office)
estimates this amount to be between $4500
and $5000 in 2016
The following two illustrations show these
caps for individuals

In 2014:
 Incomes below $55,000 will pay $285
 Incomes above $55,000 will pay 1% of income
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In 2015:
 Incomes below $75,000 will pay $975
 Incomes above $75,000 will pay 2% of income
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In 2016:
 Incomes below $110,000 will pay $2,085
 Incomes above $110,000 will pay 2.5% of income
 Based on a family of four
General rule: Employee’s share of the self-only premium for the
employer’s lowest-cost plan that provides minimum value cannot
exceed 9.5% of household income or the employee may be
eligible for a premium tax credit to purchase Exchange coverage
 Treasury-proposed safe harbor: No employer penalty if the
employee’s share of the self-only premium for the employer’s
lowest-cost, minimum value plan does not exceed 9.5% of the
employee’s current W-2 wages from the employer
 Clarifies that an employer must offer coverage to employees and
dependents, but that the affordability test is based on employee
contribution to self-only coverage
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The ACA establishes community rates on all
qualified health plans which are marketed as tiers
with a pre-established Actuarial Value (AV) of the
required Essential Benefits

Proposed AV Tiers:
 Platinum = 90%
 Gold = 80%
 Silver = 70%
 Bronze = 60%
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Tiers will be based on Actuarial Value (AV)
Scores
AV Tiers will have a variation of +/- 2
percentage points
 For example rates for the Silver tier will have an
AV between 68 and 72%

This approach greatly reduces rate
differentials between plans and carriers

Recommended set of 10 benefits in each plan
which include:
 Ambulatory patient services
 Emergency services
 Hospitalization
 Maternity and newborn care
 Mental Health and Substance Abuse (behavioral
health)
 Prescription Drugs
 Rehabilitative and habilitative services and
devices
 Laboratory services
 Preventive and wellness services and chronic
disease management
 Pediatric services, including oral and vision care
No annual dollar limits
 Maximum deductible of $2000 individual and
$4000 family
Employers with 50+ employees:
 Employer requirement to offer essential
benefits
 Penalty of $2,000 per employee for failure to
comply
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Small group redefined as 1 to 100
Premium taxes on carriers – can be passed
directly to the fully insured plan
Medicaid Program Expansion – state decision
to offer coverage to individuals up to 133% of
the Federal Poverty Level
Guarantee Issue
No Pre-Existing Conditions for adults

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All health insurance plans will no longer be
underwritten – coverage is guaranteed
regardless of health
No pre-existing condition limitations for
adults
 Children have been exempt since 2010
 Must have Creditable Coverage

Creditable Coverage – must have had
continuous coverage for 12 months with no
gap longer than 63 days

No pre-existing condition limitations for
adults
 Children have been exempt since 2010
 Must have Creditable Coverage
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Creditable Coverage – must have had
continuous coverage for 12 months with no
gap longer than 63 days
Without Creditable Coverage an adult has a
12 month pre-ex limitation
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Mechanism to purchase health insurance for
individuals and employer groups with 1 to 100
employees
ACA was drafted for states to run exchanges,
but a majority of states have refused to
comply and deferred to the Federal
Exchange, including Ohio
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Certify that health plans are ‘qualified’ with
Essential Benefits
Operate website for comparisons
Operate a toll-free hotline
Determination of consumer eligibility for
plans and affordability programs (tax credits,
Medicaid, CHIP, etc.)
Facilitation of consumer enrollment
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Accepts all health insurance carriers
Guidance indicates intent to work with
agents and brokers
Will not replace a states Department of
Insurance
HHS (Health and Human Services) will
manage web site and consumer hotline

Exchanges will allow employer groups to
enroll
 Employees allowed choice among plans
 Coverage from multiple carriers but one bill
 Employers can also offer a single plan
 Includes groups with 1 to 100 employees
 In 2017 100+ employee groups can enroll
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Guidance from HHS suggests a role a
‘Navigators’
Must pass certification
Recent proposed legislation on MLR and
commission exclusion passed Senate in
September
HHS will integrate link to web portal for
certified agents/brokers
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Defined Contribution Health Plans
 For employers with under 50 employees drop
coverage altogether and fund a fixed dollar amount
into individual medical accounts for employees to
purchase their own coverage
 Eliminates renewals, fiduciary liability and provides
employees more choices
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ERISA (self-funded plans) are exempt from ACA
regulation
Additional exemptions – Unions, MEWA’s, etc.
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If you want to learn more about PPACA and
receive future updates subscribe to our
newsletter or call me:
Doug Helser, Life & Health Specialist
MMA Insurance
614-834-6624 or 614-961-0339
dough@mmains.net
www.mmains.net