On March 23, 2010, the President signed the Patient Protection and Affordable Care Act, P.L. 111-148, as amended by the Health Care and Education Reconciliation Act of 2010, P.L. 111-152, March 30, 2010. On June 28, 2012, the U.S. Supreme Court in National Federation of Independent Business v. Sebelius upheld most of the general provisions of this statute. The law contains a number of sections that create new requirements on insurance providers, states, individuals, and employers.
One provision contained in the law is known as the “individual mandate” which requires that all Americans (regardless of age) be covered by health insurance (through a group or individual plan) or pay an annual financial penalty assessed by the Internal Revenue Service, unless waived under certain limited circumstances. The minimum amount of the penalty is $95 during 2014 for each individual covered by the Federal income tax return, rising to $325 per individual for 2015 and then $695 per individual in 2016. The penalty amount is governed by a formula that contains certain capped limitations as well as an alternative computation based upon a percentage of household income. Significantly, to avoid the penalty, an individual (as well as the spouse and other dependents covered by the tax return) must maintain continuous coverage by a qualified health plan (satisfying minimum essential coverage) for at least one day of each and every month during the tax year.
Another provision of the law is the establishment of insurance “exchanges.” The exchanges consist of Internet websites (sponsored by the state or the Federal Government) through which an individual may purchase a policy covering typical healthcare costs, including in-patient and out-patient care and prescription drug benefits. Each exchange has at least two participating insurance carriers, and some exchanges have multiple plans to fit different budgets since they balance the cost of premiums against the cost of overall reimbursement. The Department of Health and Human Services (DHHS), Center for Medicare and Medicaid Services (CMS), has the responsibility for issuing certain regulations to implement the Affordable Care Act and has also facilitated the development of the information technology necessary to create the insurance exchanges. Information about the exchanges can be found at: https://www.healthcare.gov/, and https://www.cms.gov/. The Office of Personnel Management (OPM), under its Multi-State Plan Program, is separately charged with the responsibility of developing and administering standards for insurance carriers who wish to participate in the insurance exchanges, and also ensuring that at least two carriers participate in each exchange. Information about OPM’s program can be found at: https://www.opm.gov/healthcare-insurance/multi-state-plan-program/.
Individuals who may wish to receive price quotes for policies delivered through an exchange include:
- Individuals not eligible to participate in FEHB (as the primarily policy holder or as a family member);
- Individuals who cannot be covered as a family member under someone else’s non-FEHB employer-provided group plan;
- Former employees who are examining the cost of continuing participation in FEHB through the Temporary Continuation of Coverage (TCC) or Spouse Equity enrollment provisions; or
- Former employees or retirees ineligible for health insurance coverage through FEHB, Medicaid, Medicare, Tricare, or the Veteran’s Administration.
The Open Season enrollment period for the health insurance exchanges begins October 1, 2013, with policy effective dates of January 1, 2014, through December 31, 2014.
Employees who have questions regarding the Affordable Care Act may contact their servicing benefits specialist.
Employees may also wish to consult two Benefits Administration Letters released during 2013 regarding the Affordable Care Act: BAL 13-206, “The FEHB Program and Affordable Care Act - Marketplace Notice and Minimum Value Standard,” and BAL 13-205, “Federal Employees Health Benefits (FEHB) Program and the Individual Shared Responsibility Provision of the Affordable Care Act: The Requirement to Maintain “Minimum Essential Coverage” (MEC).” Both BAL’s can be found here.
A transmittal memorandum from OPM to Chief Human Capital Officers is available here.
|Current Health Insurance Participation||Common Examples||Impact|
|Employees and/or family members enrolled in FEHB||
||None. FEHB plans satisfy the Act’s individual mandate requirement.|
|Employees, former employees, and/or family members eligible for FEHB but not currently participating||
|Employees not eligible for participation in the FEHB program||