What Are Your Responsibilities Under the Affordable Care Act?

December 2013

The Affordable Care Act (ACA) of 2010 (often called Obamacare) established new rules and minimum standards for health insurance in the U.S. One important aspect of the act is the requirement that most individuals purchase insurance starting in 2014 or pay a penalty if they are not covered by insurance at work or by Medicare or other specific health insurance plans.

To make coverage possible for people who currently don’t have insurance or can’t get it, the ACA also provides new protections including:

  • coverage for individuals with pre-existing health conditions
  • assistance in paying premiums for low and middle income individuals and families
  • free preventive care
  • coverage of certain essential health benefits
  • no lifetime or annual limits on what the insurance will pay out for health care services

Questions about the Affordable Care Act

  • Who must have insurance?
  • What kinds of current health insurance meet the requirements?
  • Are there exemptions from having to get insurance?
  • How long do you have to enroll without paying a penalty?
  • Where can you buy individual and family health insurance if you must purchase it yourself?
  • What types of coverage can you purchase?
  • Can you still buy health insurance outside of the state and federal marketplaces?
  • How do you qualify for help in paying for insurance premiums?
  • How do you apply for health insurance on the Marketplace?

Read the full report for answers to these questions.

So what are your responsibilities under this new health insurance law? There is still a lot of confusion out there because of continued debate about the law and because of the troubled rollout of the federal “marketplace” website which many individuals must use to enroll.

This report provides answers to the basic questions you may have. And it provides links to more information and some tips on how to use it.

Also check here for updates. As the government continues to work to “fix” the problems with the enrollment process, you can also check here for regular updates.

Who Must Have Insurance?

Individuals who do not have insurance from other sources (such as their workplace) and who do not meet the requirements for exemption are required to purchase insurance starting January 1, 2014. Children up to age 26 may be covered under their parents’ insurance or they may qualify for insurance under the Children’s Health Insurance Program (CHIP). Failure to purchase insurance if you are required to will result in a penalty.

What Kinds of Current Health Insurance Coverage Meets the Requirement? What Doesn’t?

The majority of Americans are already covered by insurance that meets ACA requirements. These include

  • insurance offered by an employer
  • Medicare
  • Medicaid or the Children’s Health Insurance Program (CHIP)
  • TRICARE for active service members, retirees, and their families
  • The veteran’s health program
  • An independent insurance plan that meets at least Bronze ACA requirements and bought directly from an insurance company. Note that many insurance companies are cancelling current insurance policies that do not meet ACA requirements and offering individuals new options that do.
  • An individual insurance policy that is “grandfathered” in. This means your policy was in existence March 23, 2010, it has had no substantial changes in benefits or costs, and you have been continuously covered. Your insurance company will have informed you if your plan is grandfathered.

Are There Exemptions from Having to Get Insurance? What Are They?

Yes, the following exemptions may apply to you. You must apply for them to qualify, however. Read more here on the health.gov site.

  • Your family income is so low that you are not required to file an income tax return. In 2013, that cut off is $10,000 for an individual, $20,000 for a family.
  • To buy insurance would require that you pay more than 8% of your income, after you take into account any employer contributions or tax credits you may receive.
  • You are serving a conviction in prison.
  • You are not a legal resident of the U.S.
  • You are a member of a recognized U.S. Indian tribe.
  • You are part of a recognized religious organization that objects to accepting insurance, including Social Security and Medicare.
  • You belong to a recognized health care sharing ministry.
  • You qualify for a hardship exemption. Examples include being homeless or evicted in the past 6 months. For more details and how to apply in the Marketplace see this page on healthcare.gov.

How Long Do You Have to Enroll without Paying a Penalty? And What Is the Penalty?

You have until March 31, 2014 to sign up without penalty. This is called the Open Enrollment period. However, if you want your insurance to start on January 1, 2014, you must have signed up on the Marketplace by December 23, 2013. If you buy a policy directly from a health insurance company, the sign up dates required for first-of-the-month insurance start dates may vary slightly.

Penalties in 2014 are 1% of adjusted gross income or $95, whichever is higher. For a family, the penalty is $95 per adult and $27.50 per child or 1% of family income, whichever is higher. Penalties increase in 2015 and 2016.

Where Can You Buy Individual and Family Health Insurance if You Must Purchase It Yourself?

To qualify for assistance with premiums (if you are eligible), you must sign up for insurance through the state or federal health insurance Marketplace. You can access your state website or the federal website at healthcare.gov. You must use the federal Marketplace unless you live in one of the following states which provide state Marketplaces: California, Colorado, Connecticut, Washington, DC, Hawaii, Kentucky, Maryland, Massachusetts, Minnesota, New York, Nevada, Oregon, Rhode Island, Vermont, Washington. Note: Although the federal website is still having problems, all state marketplaces (with the exception of Oregon) are reportedly working well.

What Types of Coverage Can You Purchase?

Health insurance plans under ACA come in five levels: These are coded bronze, silver, gold, platinum and catastrophic. All provide the same set of essential benefits but the category affects how much you pay for premium and co-insurance costs. In brief, the lower the premium, the higher your deductible/co-insurance costs. Read more about the levels here.

You can see and compare plans available in your area by using Get Plan Information in Your Area on healthcare.gov. To determine the exact premiums you as an individual or family qualify for, however, you must establish an account at healthcare.gov and go through the application process.

In 2014 the maximum out-of-pocket costs for any level plan is $6,350 for an individual plan and $12,700 for a family plan.

Can You Still Buy Health Insurance Outside the State and Federal Marketplaces?

Yes, insurance companies may offer plans that have the same essential benefits outside the state and federal insurance marketplaces. However, you can qualify for and receive help with premium payments only by applying for insurance through the appropriate state or federal Marketplace.

Because the problematic rollout of the website enrollment for health insurance is still not resolved and is causing difficulties for many consumers, President Obama announced on November 14, 2013, that insurance companies could continue to provide in 2014 insurance plans that don’t conform to ACA to people who currently have such policies and would like to keep them. However, it is unclear how insurance companies (and which ones) may respond to this. We’ll keep you updated on this page.

How Do You Qualify for Help in Paying for Insurance Premiums?

The only way to actually qualify for assistance in paying for health insurance premiums is to establish an account at healthcare.gov and apply for insurance.

However, you can get an estimate of what assistance you may qualify for by using the calculator provided by the Kaiser Family Foundation. Generally, you will qualify for assistance if your income is below $45,960 for an individual and $94,200 for a family of 4. For more details, see this page on healthcare.gov. You will receive assistance you qualify for as a tax credit directly applied to lower monthly premiums.

How Do You Apply for Health Insurance on the Marketplace?

You may apply online or by phone. Go to www.healthcare.gov and open an account. Follow the steps. If you have a state-operated marketplace, you will be directed there. If your state uses the federal Marketplace, you will follow the appropriate steps. If the website times out, you may wish to try again. You may also apply by phone at 1-800-318-2596 (TTY 1-855-889-4325).

However you apply, you will want to have your social security number available and a way to accurately estimate your anticipated income for 2014. Working from your 2012 tax return’s Adjusted Gross Income may help if you are salaried. If you are self-employed and your income varies, you will want to give your best estimate. If during 2014, you realize that you have under- or over-estimated your income, you can report a change through your account.

Where Can I Find More Information?

Before you apply, there are several good websites you can explore to find the information you need.

  • Start with healthcare.gov. Although the enrollment process on the federal Marketplace site may still have problems, it’s easy to get to the information for individuals and families. We’ve provided links to individual pages throughout this report, but you may wish to explore all the information under Individuals and Families—Learn.
  • For a quick one page summary of what you need to do, see Get Covered—A One-Page Guide to the Health Insurance Marketplace from Healthcare.gov.
  • Consumer Reports is offering a wealth of information free to both nonsubscribers and subscribers. In addition to their tool, Health Law Helper, the daily blog answers lots of questions and provides updates that may be of interest to you.