Healthcare Update

The Patient Protection and Affordable Care Act

By Rachel Laforest
Public Policy Director

The April health care article painted a broad-stroked picture of what Equity members can expect from our new health care system. This issue contains an in-depth analysis of one component of the new act that will affect them, the individual mandate and subsidies. (Note: The Equity/League trustees are monitoring the possible impacts that the new health care act could have on our plan.)

Individual Mandate and Subsidies
(All information gathered from www.Healthcare.gov and http://voices.washingtonpost.com/ezra-klein/2010/03/how_does_the_individual_mandat.html)

The new health care reform legislation will require most individuals who can afford it to obtain basic health insurance coverage or pay a fee to help offset the costs of caring for uninsured Americans. Subsidies will be offered to assist with compliance and if affordable coverage is not available to an individual, he or she will be eligible for an exemption.

The individual mandate will require most Americans to have a minimum level of health insurance or else pay a penalty.

• In 2014 the penalty will be $95 a year or 1 percent of the household income, whichever is greater.

• In 2015, at least $325 or 2% of the household income, whichever is greater.

• In 2016, at least $695 or 2.5% of the household income, whichever is greater (with a maximum penalty of $2,085 per family).

After 2016, dollar amounts will increase by the annual cost of living adjustment.

Exemptions
The following people are exempt from the individual mandate requirements:

• people with low incomes who are not required to file taxes;

• members of certain religions who are exempt for religious reasons;

• people who are incarcerated;

• people who are not legal residents;

• members of an American Indian or Alaskan Native tribe;

• people who go without coverage for less than 3 months;

• people who do not have an affordable offer of coverage, either through the exchange or through their employer (coverage is considered "affordable" if the monthly premium does not consume more than 8% of a family's gross income in 2014. This will be indexed in later years to account for both premium and wage increases).

In addition, anyone who would face hardship if they purchased coverage may file for an exemption from the individual mandate requirements. There will be no criminal penalties for failing to meeting the individual mandate requirements.

Individual Subsidies
The federal government will provide tax credits to low and middle-income people, those earning between 133% and 400% of the poverty level, to help them buy health insurance from marketplaces called "exchanges", where they can compare prices and benefits.

Premium Limits and Cost Sharing Assistance

Role of AEA
Equity staff and members of the Health Care Committee have attended several forums, seminars and teach-ins on the new health care legislation. These sessions have increased our understanding of how things are rolling out. While the rules and regulations for each component of the bill continue to be forged, we will continue to monitor the process, weigh-in when necessary and report that details to the membership.

Past AEA Healthcare Updates...