The Affordable Care Act: Top 10 words to know

Governor Snyder came to Beaumont in early July to ask community leaders and Beaumont employees for help in promoting passage of his Healthy Michigan plan.

Governor Snyder came to Beaumont in early July to ask community leaders and Beaumont employees for help in promoting passage of his Healthy Michigan plan.

This morning, Michigan Medicaid expansion was signed into law. The “Healthy Michigan” plan allows the state to accept more than a billion dollars in federal funding in the next fiscal year as Michigan begins to reform Medicaid and expand its roles under the auspices of the Affordable Care Act. The goal is to eventually cover up to 470,000 additional Michigan residents.

To get a better handle on what the Affordable Care Act is and how it works, it is important to understand some of the common words and phrases surrounding it:

Affordable Care Act: A law passed in 2010, also referred to as “health care reform” or “Obamacare,” focuses on extending affordable health insurance to more people, offering more protections to those covered by health insurance and helping to control health care costs.

Employer mandate: Employers with more than 50 full-time employees must offer medical benefits that meet ACA requirements or pay a penalty. This mandate was originally scheduled to go into effect Jan. 1, 2014, but has now been postponed to Jan. 1, 2015.

Essential health benefits: Specific health benefits, such as prescription drugs, hospital care, emergency center care, maternity and baby care and preventive care that all of the plans found on the health insurance marketplace must cover. In addition, as part of ACA, large employers are no longer allowed to place annual or lifetime limits on these specific benefits.

Federal poverty level: The dollar amount set by the federal government, which determines whether people qualify for public programs like Medicaid or for special subsidies in the health insurance marketplace.

Full-time employee: Under ACA, an employee working 30 or more hours per week. Large employers must offer full-time employees a medical plan option that meets ACA requirements or pay a penalty. Employer definitions may vary.

Health insurance marketplace (exchanges): An online public shopping site where people and small businesses can compare and buy health insurance that meets the new ACA requirements. Each state will have a public health insurance marketplace.

Individual mandate: The recent ACA requirement that most people must have medical coverage by Jan. 1, 2014 or pay a penalty.

Individual penalty: The amount you’ll pay when you file your taxes for 2014 (and beyond) if you do
not buy medical coverage by the deadline:
  • $95 for an adult
  • $47.50 for a child under 18
  • No more than $285 per family or 1 percent of family income, whichever is higher.
Pre-existing condition: Illness or medical conditions a person has before enrolling for medical coverage. After Jan. 1, 2014, benefits can’t be limited due to a pre-existing condition.

Premium subsidy: The dollar amount (in the form of a tax credit that can be applied immediately) that helps off set the cost of health insurance coverage through the marketplace. Eligibility depends on household income and access to employer health insurance.
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