The Patient Protection and Affordability Act (PPACA), or Obamacare, aims to provide health insurance to all Americans and to decrease healthcare costs. The Act includes individual and employer mandates to purchase healthcare insurance, the creation of healthcare insurance exchanges, the prevention of pre-existing condition discrimination, and federal subsidies for low-income individuals or families to purchase healthcare insurance. The bulk of the PPPACA is scheduled to take effect in 2014.
The Act also contained a provision to expand Medicare eligibility for low-income individuals, but that provision was declared optional for the states by the United States Supreme Court. Texas, Florida, Mississippi, Louisiana, and South Carolina have already declined to expand Medicare edibility for low-income individuals.
Will My Work Be Affected by the 2016 Changes?
In 2016, scheduled changes in the Affordable Care Act are going to effect small businesses. The definition of a small business/employer will change from 1 to 50 employees to 1 to 100 employees. So now employers with 50 to 99 employees will face employer mandate penalty.
In 2015 employers with 50 or less employees received tax breaks/credits if they provided healthcare. But in 2016, some states will allow employers with 100 or less employees to receive the tax breaks/credits.
Employers with 50 to 99 employees were and are still required to provide health insurance. In 2016 though, employees will be able to access the benefits that were only available to employers with 1 to 50 employees.
What Is the Individual Mandate?
The PPACA requires all individual Americans to have some form of approved health insurance by 2014. The approved health insurances are Medicare, Medicaid, an employer sponsored health plan, or a private insurance plan. Failure to comply with the mandate will result in an annual $95 penalty against the individual. This penalty can reach up to $695 if the individual fails to comply in subsequent years.
Since the Supreme Court has ruled this mandate to be a tax, the mandate will be regulated by the IRS. There are exemptions to the mandate for religious reasons or if the penalty would exceed 8% of an individual’s or family’s income.
What Is the Employer Mandate?
Companies which employ 50 or more full-time workers, but do not offer health insurance to its employees, will be penalized. The tax is $2,000 per employee who are federally subsidized outside of the company’s health insurance plan. The fee is paid over the year, which means the employer will pay $166.67 a month for 12 months.
If the company employs part-time workers, thirty hours of part-time work will be considered one “full-time” employee for purposes of taxation under the PPACA. Since the part-time worker portion counts hours, it doesn’t matter how many part-time workers a company has.
The employer must offer health coverage, but the employee may reject work coverage. The employee will not be subject to a fee if the employee if the employee declines work coverage, although the employee will be mandated to find personal health insurance.
The IRS will examine who controls the companies rather than what the companies will do. This means that normal employment loopholes, such as dividing the staff of 50 between two companies, will not defeat the employer mandate. Businesses separately owned by married couples may also be counted as single entities for purposes of the mandate.
What Is the Contraceptive Mandate?
The Patient Protection and Affordability Act requires that all health insurance plans provide coverage for FDA approved birth control. The coverage renders such birth control free, including co-payments. There is a religious exemption for religious organizations, but institutions which are supported by religious organizations are not exempt. Thus, churches are exempted but schools or hospitals supported by the church are not.
The FDA approved birth control, free birth control under the PPACA, are:
- Condoms, for either gender
- Birth control pills, both preventative and “morning after”
- Contraceptive patches
- DMPA injections
- Sponges with spermicide
Following a Supreme Court decision in 2014, small for-profit corporations may be exempt from providing any birth control through work provided health insurance. The owners of the corporation must inform the government that they object to the contraceptive mandate. The government will need to offer contraception to the corporation’s employees through independent services.
How Does the Ban on Pre-Existing Condition Discrimination Work?
Under the Patient Protection and Affordability Act, insurance companies cannot refuse to sell or renew policies to anyone with a pre-existing condition. The law specifically cites discrimination based on the following as illegal:
- Health status
- Medical condition
- Claims experience
- Medical history
- Genetic information
- Receipts of other health care plans
- Evidence of insurability
- Any other health-related status determined appropriate by the Secretary of Health and Human Services
Do I Need a Lawyer If I Can’t Meet The Mandate?
Although the penalty for the mandate doesn’t seem like much, the cost of living in the United States will go up. Since the IRS has the power and the responsibility of enforcing the mandates, an experienced bankruptcy attorney can help you if the mandate becomes a burden.
Do I Need a Lawyer If I Am Being Denied Insurance or Contraceptives?
The goal of the Patient Protection and Affordability Act is to provide expanded healthcare for everyone. If an insurance company or a healthcare provider is refusing healthcare service based on pre-existing conditions or restricting healthcare service by charging for birth control, then the PPACA has been violated. An experienced financial lawyers who specializes in healthcare can fight for your legal rights.