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COURSE OVERVIEW This course describes the key elements of the federal health reform law passed in 2010. Subsequent courses describe in detail the steps California has taken to implement the law and to provide affordable, easily accessible health insurance for all Californians.
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COURSE OBJECTIVES
Understand the fundamentals of the Affordable Care Act Understand the new health insurance options available through the Affordable Care Act Describe the timeframe for implementing the new health insurance options in the Affordable Care Act (i.e., which were implemented prior to 2014 versus those scheduled for implementation in 2014 and after 2014) Understand the new requirements for individuals to have health insurance Understand the Affordable Care Acts insurance reforms Understand Essential Health Benefits Describe the expansion of Medicaid (Medi-Cal) Describe the new health insurance exchanges or Marketplaces Understand the financial assistance offered to individuals and families through the new Marketplaces Understand the tax credits offered to small businesses
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OVERVIEW
In this lesson you will gain an understanding of the fundamentals of the Patient Protection and Affordable Care Act (ACA). The law passed in 2010 made significant changes to the way health insurance will be provided. Covered California is the business name of Californias implementation of the ACA.
This lesson also describes the health insurance options available through the Affordable Care Act and the time frame in which these changes will be implemented. Click to edit Master title style
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OBJECTIVES
By the End of this lesson you should be able to: Understand the fundamentals of the ACA Understand the new health insurance options available through the ACA Describe the timeframe for implementing the new health insurance options in the ACA (i.e., which were implemented prior to 2014 versus those scheduled for implementation in 2014 and after 2014) Click to edit Master title style
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Improvements in the affordability of coverage through the expansion of Medicaid (Medi-Cal in California) and creation of new premium assistance and cost sharing reduction programs for those who buy Marketplace coverage.
New initiatives aimed at making it easier and more affordable for small businesses Click to edit Master title style to offer coverage.
Improvements to Medicare such as the elimination of cost-sharing for preventive services, a new annual wellness visit, better coverage of prescription drugs, and a bolstering of the financial stability of the program.
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Stronger appeals procedures Allowing patients to choose their primary care doctor No prior approval or higher out-of-network costs for ER use
Subject to review for excessive premium increases Prohibition on pre-existing condition exclusions for children (in individual coverage)
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States can further limit rate variation. California has opted to do so by not allowing smokers to be charged more for their coverage.
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Beginning January 2014, most people will be required to have public or private health insurance or pay a financial penalty.
Parents with children who are tax dependents also are responsible for ensuring those children have coverage or they may face penalties.
Click to edit Master title style or impossible to implement the Without this requirement, it would difficult ACAs insurance market reforms.
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ACA CHANGES IMPLEMENTED IN 2014 Affordable Coverage and Financial Support The ACA expands Medicaid and creates new premium assistance and cost-sharing reduction programs. The ACA also provides for a single, streamlined application. The No Wrong Door Approach helps people get into the right program by offering Click to edit Master title style a wide variety of sources in which consumers can submit applications.
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Employers with 50 or more full-time-equivalent employees who do not offer affordable health coverage that meets minimum standards may be subject to penalties. The penalties apply only if a company has employees who receive federally-funded premium assistance. Originally slated to be applied to large employers who failed to offer coverage in 2014, the Obama Administration delayed the large employer health care requirement by a year. Click to edit Master title style Businesses with fewer than 50 full-time-equivalent employees are not subject to a penalty for failure to offer coverage.
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MAJOR CHANGES
TO
HEALTHCARE
OVERVIEW
There are a number of different changes to health care that were included in the Affordable Care Act. This section will provide more detail on the major changes that were included in the ACA.
OBJECTIVES
Minimum Coverage Requirement Development of Essential Health Benefits Expansion of Medicaid (Medi-Cal) Health Insurance Exchanges or Marketplaces Click to edit Master title style and families and related Financial assistance for individuals improvements to application procedures Tax Credits for small businesses
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MAJOR CHANGES
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HEALTHCARE
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MAJOR CHANGES
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HEALTHCARE
Self-funded student coverage with a plan year that begins on or before December 31, 2014 is treated as minimum essential coverage under final rules issued by the Department of Health and Human Services 8/29/2013 22 22 of 52 (HHS). Colleges and universities must apply to HHS if they want to have their self-funded student health
MAJOR CHANGES
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HEALTHCARE
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MAJOR CHANGES
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HEALTHCARE
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MAJOR CHANGES
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HEALTHCARE
Year
$95 per adult and $47.50 per child (up to $285 for a family) $325 per adult and $162.50 per child (up to $975 for a family)
$695 per adult and $347.50 per child (up to $2,085 for to edit 2.5%Master title style a family)
Note: The total penalty for the taxable year will not exceed the national average of the annual premiums of a bronze-level health insurance plan offered through the health insurance marketplaces.
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MAJOR CHANGES
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HEALTHCARE
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WITH THE
WITH THE
WITH THE
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WITH THE
Adopting new ways of defining income when evaluating eligibility in order to allow for better coordination with other insurance affordability programs Click to edit Master title style Creating a new requirement to cover former foster care children up to age 26
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WITH THE
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Mental health and substance Laboratory services use disorder services, including behavioral health Preventive and wellness services Click to edit Master title style treatment and chronic disease management
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FINANCIAL ASSISTANCE
FAMILIES
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FINANCIAL ASSISTANCE
FAMILIES
To qualify, people generally must have income between 100% and 400% of the federal poverty line and meet a range of non-financial criteria, including a requirement that they lack access to other Click to edit Master title style affordable insurance options.
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FINANCIAL ASSISTANCE
Healthcare Premium Premium Assistance
FAMILIES
Premium After Assistance Joan pays $1,428 per year after applying premium assistance for a Silver plan. Her monthly payment is about $119.
Joan is a 40-yearold single mother with three kids. She earns about $35,000 per year.
Joans health insurance premium could be as much as $12,336 per year or $1,028 per month. Like Joan, Henry and Junes total health insurance premium is about $12,336 a year or $1,028 a month.
Under the ACA, Joan qualifies for $10,908 in premium assistance or $909 a month. With their income, Henry and June qualify for premium assistance in the amount of $8,892 or $751 a month. Tory qualifies for $2,607 in premium assistance a year or $217 a month.
Henry and June are married with two children. They earn about $50,000 per year.
The premium assistance brings the annual premium for a Silver plan selected by Joan and Henry down to $3,444 or $287 a month.
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FINANCIAL ASSISTANCE
FAMILIES
COST-SHARING SUBSIDIES
Cost-sharing subsidies reduce the amount that people are expected to pay when they use the services of a Marketplace health plan, such as deductibles, co-insurance and/or co-payment charges. Cost sharing subsidies, also referred to as cost sharing reductions, are available to individuals enrolled in Silver Marketplace plans. Consumers can enroll in and use both premium assistance and costsharing reductions.
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FINANCIAL ASSISTANCE
FAMILIES
COST-SHARING SUBSIDIES
CSR Tier Income Range Actuarial Value of the Silver Plan 94% 87% 73%
1 2 3
Special populations < 100% FPL; 100% FPL 150 %FPL 150% FPL - 200% FPL 200% FPL 250% FPL
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FINANCIAL ASSISTANCE
FAMILIES
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FINANCIAL ASSISTANCE
FAMILIES
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ELIGIBILITY
Small businesses may be eligible for tax credits if they: Have 25 or fewer full-time equivalent employees for the tax year
Pay employees an average of less than $50,000 per year (in later years, this figure will be adjusted for inflation).
Contribute at least 50 percent toward employees premium costs. This contribution requirement also applies to add-on coverage such as vision, dental, and other limited-scope coverage Small Business Tax Credit Fact Sheet: www.CoveredCa.com Click to edit Master title style
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Tax Year(s)
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For tax-exempt employers, the same employee and wage requirements apply, but the maximum amount of tax credit is 25 percent of eligible premium expenses during the first phase. Click to edit Master title style
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KEY TERMS:
Marketplace An online portal where people can shop for health coverage, compare plans, and see if they qualify for financial assistance. Essential Health Benefits A minimum set of core health care benefits that most health insurers must provide. Qualified Health Plan Private health plans offered on the Marketplace. They must cover a core package of benefits, known as essential health benefits, like prescription drugs and mental health. Metal Levels Types of plans offered on the Marketplace that vary in the extent to which they cover consumers medical costs. They include Platinum, Gold, Silver, and Bronze.
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KEY TERMS:
Insurance affordability programs Programs designed to make it more affordable to enroll in and use health care services. Includes premium assistance, cost-sharing reductions, Medicaid (Medi-Cal in California), and the Targeted Low-Income Childrens Program (TLICP in California). Premiums - What a person must pay in order to enroll in health coverage. Premiums are usually paid monthly to the insurer.
Cost sharing The amount a person must pay when they use health services, such as doctors or hospital visits. Cost-sharing can take the form of co-payments, co-insurance or deductibles.
Habilitative services - Medically necessary health care services and health care devices that assist an individual in partially or fully acquiring or improving skills and functioning and that are necessary to address a health condition, to the maximum extent practical.
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