Welsh said the biggest change for both individuals and insurance providers is that insurance can no longer be denied to anybody based on health status. The ACA also bans lifetime and annual coverage limits; mandates enhanced emphasis on preventive care; and places a maximum 90-day waiting period on enrolling new employees in employer-provided plans.
As far as the new rates, Welsh said he's seen an impact for both older and younger clients.
"What I've seen so far is rates have come down a little bit for older folks," he said. "Younger folks are paying two to three times what they used to."
Welsh noted that the law has also changed the types of plans insurance companies are legally obligated to offer. All plans must now provide "Essential Health Benefits" – a series of 10 criteria that will make all insurance policies much more comprehensive.
|About 80 truck show attendees listened to Rick Welsh's|
presentation Saturday morning on the Affordable Care Act
and its impact on individuals and small business owners.
The caveat with having more comprehensive insurance, according to Welsh, is that comprehensive coverage costs more.
"There's not going to be any shell game anymore," he said. "If you see a policy for $300 a month, that's what you're going to pay. ... It's going to be a lot easier to figure out. You won't have to worry about something hidden in the fine print."
Under the new law, rates will be determined by four factors: age, area, marital status, and tobacco use. With age, rates are capped at a three-to-one ratio, where the most expensive policies can only be up to three times the rate of the least expensive.
Welsh also pointed out the ACA implementation will bring changes to Flexible Spending Accounts, which will now be capped at $2,500 annually.
Annual deductibles will also be capped at $6,350.
The Individual Mandate for Affordable Care Act takes effect on Jan. 1, 2014. Individuals who do not have a health care plan through their employer or those who don't qualify for veterans benefits or Medicare and Medicaid will be required to purchase a qualified health care plan or face a tax penalty.
Penalties will be 1 percent of the individual's adjusted gross income in 2014. For an individual making $40,000 per year, that amounts to a $400 tax hit. Penalty rates will increase to 2 percent in 2015 and 2.5 percent in 2016 before being chained to inflation index in subsequent years.
Open enrollment for this year runs from Oct. 1 to March 31, 2014. This is the only year for the extended open enrollment. Subsequent years will be from Oct. 15 to Dec. 7, the same time period as open-enrollment for Medicare.
OOIDA is currently working to set up a pilot program of private health insurance exchanges in six states. For more information about ACA, contact the Medical Benefits Department at OOIDA.