The public health system seems to be in a continuous state of flux. It is always a hot topic of political debate, and as such, the requirements and coverage areas frequently change.
Medicare
Medicare is a government insurance program for the elderly and disabled.
To qualify for Medicare, you must:
- Be over 65 and eligible for social security or railroad retirement; or
- Be disabled and have obtained social security or railroad retirement for at least two years; or
- Be over 65 and pay for Medicare coverage.
Like health insurance, Medicare has deductibles and co-payments. Medicare has several additional plans available, so you should choose the one that suits your needs best.
Medicare Coverage
Medicare pays for a large number of medical services, including:
- Inpatient hospital care
- Some long-term care facility stays
- Physician visits
- Surgery
- Physical therapy
- Ambulance transport
- Medical supplies
But Medicare does not cover everything. For instance, Medicare does not cover:
- Prescription drugs
- Eye and physical examinations
- Dental Services
- Immunizations
- Cosmetic Surgery
Medicaid
Medicaid is a healthcare program funded by both the state and federal governments. While Medicaid eligibility is different in each state, it’s generally available to:
- The disabled
- The impoverished elderly
- Families with kids
Medicaid Coverage
Depending on the state, Medicaid coverage may include:
- Hospital Services
- Prescription Medications
- X-rays and Lab Tests
- Some long term care facilities
- Dental needs
- Optometrist visits
- Rehabilitative services
What Is the Healthcare Individual Mandate?
The Patient Protection and Affordability Act of 2010 (PPACA), also known as Obamacare, contains a provision known as the “individual mandate.” The individual mandate is a directive that all individual American citizens have healthcare insurance or face a tax penalty. The IRS will be the executive agency in charge of enforcing the mandate.
Will My Work Be Affected by the 2016 Changes?
In 2016, scheduled changes in the Affordable Care Act affected small businesses. The definition of a small business/employer changed from 1 to 50 employees to 1 to 100 employees. Employers with 50 to 99 employees faced the employer mandate penalty.
In 2015, employers with 50 or fewer workers received tax breaks/credits if they provided healthcare. But in 2016, some states still allowed employers with 100 or fewer employees to receive the tax breaks/credits.
Employers with 50 to 99 employees were still required to provide health insurance. In 2016 though, employees could access the benefits that were only available to employers with 1 to 50 employees.
What Is the Individual Mandate?
The PPACA required all individual Americans to have 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 resulted in an annual $95 penalty against the person. This penalty could reach up to $695 if the person fails to comply in subsequent years.
Since the Supreme Court ruled this mandate to be a tax, the IRS regulated the mandate. There are exemptions to the mandate for religious reasons or if the penalty would exceed 8% of an individual’s or family’s income. As of now, Obamacare is still the law of the land, but there is no penalty for not having insurance.
What Is the Employer Mandate?
The Patient Protection and Affordable Care Act (PPACA or ACA) employer shared responsibility requirements include an employer mandate―pay or play―and a requirement to provide affordable coverage of minimum value. Both provisions have penalty implications for employers with 50 or more full-time equivalent employees (large employers).
Employer Mandate or Pay or Play
Under the PPACA, the federal government, state governments, insurers, employers, and individuals are given shared responsibility to reform and improve health insurance coverage availability, quality, and affordability in the United States. The law does not require employers to offer health insurance but imposes penalties on large employers for not doing so.
Under the mandate, a large employer that does not offer health insurance coverage to substantially all (95 percent) of its full-time employees and their dependents could be subject to a penalty tax (the so-called pay-or-play provision).
Penalty
A penalty of $2,750 (for 2022) per full-time employee minus the first 30 will be incurred if the employer fails to offer minimum essential coverage to 95 percent of its full-time employees and their dependents and any full-time employee obtains coverage on the exchange.
For instance, if an employer with 150 employees does not offer health insurance to its full-time workers and their dependents, and if at least one full-time worker buys tax-subsidized health insurance through the marketplace exchange, the employer’s penalty in 2022 will be $330,000 (150 – 30 × $2,750).
Providing Coverage That Is Affordable and of Minimum Value
If an employee’s share of the premium for employer-provided coverage costs more than 9.61 percent (for 2022) of that employee’s annual household income, the coverage would not be considered affordable. Because employers generally will not know their workers’ household income, employers can take advantage of one or more of the three affordability safe harbors outlined in the final regulations, that are based on information the employer will have available, such as the employee’s Form W-2 wages or the employee’s rate of pay.
A plan provides minimum value if it covers at least 60 percent of the total allowed cost of benefits expected to be incurred under the plan. Additional information on affordable and minimum-value coverage is found in the IRS Q&A.
Penalty
An employer will be subject to a penalty if the employer-sponsored coverage is unaffordable or does not provide minimum value and if one or more full-time workers receive subsidized coverage through an exchange. An employee may qualify for subsidized coverage through an exchange if their household income is less than 400 percent of the federal poverty level and the employer’s plan is unaffordable or does not provide minimum value. The monthly penalty equals $4,120 (for 2022) divided by 12 for each full-time employee receiving subsidized coverage through an exchange for the month.
However, the penalty will not be greater than the monthly penalty if the employer offered no coverage at all ($2,750 divided by 12, multiplied by the number of full-time employees employed during the applicable month, not counting the first 30 full-time employees). Only full-time employees, not full-time equivalents, are counted to calculate the penalty.
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
- Disability
- Receipts of other health care plans
- Evidence of insurability
- Any other health-related status determined appropriate by the Secretary of Health and
- Human Services
Are There Any Exemptions?
Yes. There are several exemptions to the mandate:
- Economic Inability: The mandate does not apply if paying for employer-provided healthcare or the penalty exceeds 8% of the person’s income.
- Economic Hardship: Persons under severe economic hardship, as defined by the Secretary of Health and Human Services, will be exempt from the mandate
- Religious Exemptions: Individuals who are part of a recognized religious sect that consciously opposes accepting benefits from any insurance in the event of a death, disability, or retirement will be exempt.
Do I Need a Lawyer If I Can’t Meet the Mandate?
Since the IRS has the power and responsibility to enforce the mandates, An experienced insurance lawyer specializing in healthcare can fight for your legal rights.
