When talking about health care reform, there are still areas about the law that are filled with uncertainties. Below are the five commonly asked questions about the Affordable Care Act:
1. What is the individual mandate?
The individual mandate by the health care reform law requires every American to have a health insurance plan in place by 2014 or pay a penalty. The annual penalty is $695 or up to 2.5 percent of your income (for 2016 and beyond).
2. Could I have a waiting period before employer coverage is available?
Companies subject to the employer mandate of the health care reform law (those with 50 or more full-time employees) will have a grace period of 90 days before offering new hires minimum essential coverage without incurring any penalties starting January 2014. On day 91 onwards, failure to offer affordable and adequate employer-sponsored healthcare coverage would mean paying a per person penalty.
3. What if employers offer coverage that’s unaffordable?
Employers with 50 or more full-time employees offering unaffordable health care coverage to their workers with at least one full-time employee getting health insurance via the exchange would still have to pay a penalty. Employers will be fined an annual penalty of $3,000 per full-time employee (the first 30 workers will be excluded).
4. How does household income determine if a plan is affordable?
Coverage is said to be unaffordable if the employee have to contribute more than 9.5 percent of their family income to employer coverage. According to the IRS, an employee’s household income will be verified using your tax filings. For individuals with income levels below 400 percent of the federal poverty guidelines, you’re qualified to get federal premium subsidies in the form of tax credits or free choice voucher. Under the law, the health insurance exchange will be ready by January 1, 2014.
5. What is a free choice voucher?
If your employer offers adequate coverage but is not affordable, you can request a free choice voucher from your employer to get health insurance coverage through the state-based health insurance exchange. The amount of the voucher is equal to the amount contributed by your employer for an individual or family plan. The voucher would still be tax deductible for employers. Take note that you can choose either the premium tax credit available via the exchange or get the free choice voucher from your employer. You cannot get both at the same time.