As 2013 comes to an end, many are making plans and resolutions for the New Year. 2014 is also a big year for the Affordable Care Act, as many of the Act’s provisions go into effect, such as:

Individual Mandate. Under the Act, most individuals who can afford basic health coverage will be required to obtain such coverage or pay a penalty to help offset the costs of caring for uninsured Americans. Various exemptions to the individual mandate are available, including one if affordable coverage is not available.

Employer Mandate. Beginning in 2014, large employers who failed to offer qualifying health care coverage to their employees may have been required to pay a penalty (tax). However, enforcement of this provision has been postponed from January 1, 2014 to January 1, 2015.

Health Insurance Marketplace (Exchanges). Starting in 2014, individuals and small businesses can shop for and buy qualified health benefit plans on the Health Insurance Exchanges. These new marketplaces are designed to offer consumers with various options for health plans that meet certain benefits and cost standards.

Essential Health Benefits. The Act creates essential health benefits packages that provide coverage for specific services. These packages are separated into four categories that vary based on the proportion of plan benefits they cover.

Elimination of Annual Coverage Limits. The Affordable Care Act prohibits new plans and existing group plans from imposing annual dollar limits on the amount of coverage an individual may receive.

Ban on Discrimination Due to Pre-Existing Conditions or Gender. In 2014, insurance companies cannot refuse to sell coverage or renew policies because of an individual’s pre-existing conditions. Also, in the individual and small group market, the law eliminates the ability of insurance companies to charge higher rates due to gender or health status.

Protection for Clinical Trials. Insurers will be prohibited from dropping or limiting coverage because an individual chooses to participate in a clinical trial. This protection applies to clinical trials that treat cancer or other life-threatening diseases.

Increasing Small Business Tax Credit. The Affordable Care Act’s second phase of the small business tax credit for qualified small businesses and small non-profit organizations starts in 2014. The credit is up to 50% of the employer’s contribution to provide health insurance for employees. There is also up to a 35% credit for small non-profit organizations.

Individual Tax Credits. Starting in 2014, tax credits will become available for people with income between 100% and 400% of the poverty line who are not eligible for other affordable coverage. The tax credit can be advanced, so it can lower premium payments each month. It’s also refundable, so moderate-income families can receive the full benefit of the credit. Individuals may also qualify for reduced cost-sharing (copayments, co-insurance, and deductibles).

Access to Medicaid. Americans who earn less than 133% of the poverty level (approximately $14,000 for an individual and $29,000 for a family of four) will be eligible to enroll in Medicaid. States may receive 100% federal funding for the first three years to support this expanded coverage, phasing to 90% federal funding in subsequent years.

At Setnor Byer Insurance & Risk, we are committed to guiding you through the changes coming in 2014. Check back with us periodically for future informational updates about the Affordable Care Act. If you have specific questions about the Act or if you are ready to take action and would like to see how Setnor Byer Insurance & Risk can help, contact us.

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