How is health insurance coverage changing in 2014?

Q: If I have health insurance coverage, what changes can I expect?

A: The changes made by the Affordable Care Act to health insurance differ depending on the type of insurance coverage you have. If you have individual or small employer group coverage, you will likely see more significant changes than if you have health insurance coverage through a large employer (one with more than 50 workers).

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Q: I have coverage from a large employer. What changes can I expect?

A: In 2014, large group coverage must comply with these rules: (1) plans may not exclude coverage for pre-existing health conditions; (2) out-of-pocket spending by enrollees cannot exceed $6,350 for individual coverage and $12,700 for family coverage; and (3) plans may not impose annual or lifetime limits on the total amount a health plan is required to pay. Most large employers currently provide comprehensive coverage, so you may not see many changes.

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Q: When do employers have to offer coverage to full-time workers?

A: In 2015 (not 2014), employers with more than 50 full time workers must offer coverage to full-time workers. Most large employers already satisfy this requirement, but large employers that don’t currently offer employee health insurance must begin providing coverage or face penalties.

Some employers are considering dropping coverage and paying the resulting penalties or keeping employees at part-time status to avoid providing them with coverage.

However, most employees are not likely to see significant changes in their health care coverage.

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Q: If I have coverage from a small employer, what changes can I expect?

A: Small employers (with 50 or fewer workers) may see significant changes to health benefits in 2014.\

Requirements. Some requirements include: (1) no pre-existing condition exclusions; (2) coverage of essential health benefits that include coverage in 10 categories such as physician, hospital, prescription drug, mental health, maternity, preventive, wellness and pediatric services; (3) coverage with copays and deductibles that fall into “metal tiers” (bronze, silver, gold and platinum plans); and (4) no annual or lifetime limits.

Also, the way insurers determine premium rates will change. Under the new law, insurers cannot consider the health condition of employees, and the age of employees will be only a limited factor. Therefore, small employers with healthy, younger workers are likely to pay more for insurance while small employers with older and less healthy workers likely will pay less.

On average, the cost of small group coverage is expected to increase.

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Q: What if I bought my own individual health insurance policy?

A: Ohio citizens with individual policies can expect to see many of the same changes as those covered by a small group employer, including: (1) no pre-existing condition exclusions; (2) coverage of essential health benefits; (3) copay and deductibles that fall into metal tiers; and (4) no lifetime or annual limits.

Your insurer will no longer consider your health status in setting your premium rate and your age will be a limited factor.

Also, if you earn less than 400 percent of the federal poverty level ($45,960 for an individual; $94,200 for a family of four), you may get low-income subsidies to buy coverage through the federal government’s Health Insurance Marketplace (HealthCare.gov).

Rates

Generally, premium rates for people who are young, healthy and not eligible for subsidies may go up, while premium rates for older individuals, people with serious health conditions and lower-income families may go down. Whether premiums will go up on down for you will depend on the circumstances.

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Q: If I don’t have coverage now, how will I be affected?

A: Ohio recently announced it will expand Medicaid eligibility beginning Jan. 1, 2014, for Ohio citizens with incomes at or below 138 percent of the federal poverty level ($15,856 for an individual and $31,119 for a family of four).

If your income level qualifies you, you can get Medicaid coverage without having to pay a premium. If your income is low, but not low enough to qualify you for Medicaid coverage, insurance companies can no longer deny you coverage, and the federal government will provide you with subsidies to buy affordable coverage if your income is at least 100 percent, (and no higher than 400 percent, of the federal poverty level.

Penalty

If, however, you can afford health insurance, but decide not to buy it, you likely will have to pay a penalty on your tax return. For 2014, the penalty is $95 per adult, or 1 percent of income, whichever is higher.

The penalty for failure to insure children is $47.50 per child (up to $285 per family) or 1 percent of the family income, whichever is greater.

Penalty amounts go up in 2015 to $325 per adult and $162.50 per child (up to $975 per family or 2 percent of family income, whichever is greater). In 2016 and beyond, the penalty is $695 per adult and $347 per child (up to 2.5 percent of family income, whichever is greater).

(This information was provided by the Ohio State Bar Association. It was prepared by Douglas L. Anderson, an attorney in the Columbus office of Bailey Cavalieri LLC.)