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Frequently Asked Questions

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I’ve heard a lot about the health care reform law. When do the reforms become effective?


The health care reform bill was signed into law in March 2010. The changes made by the health care reform law go into effect over a period of years. Some of the law’s changes are already in effect, such as the prohibition on pre-existing condition exclusions for individuals under age 19. Other key changes went in effect in 2014, such as the requirement for individuals to buy health coverage or pay a penalty.


Does health care reform allow people to keep their current health coverage? 


Yes. Nothing in the law requires individuals to terminate coverage that they had on the date the law was passed. However, due to new coverage requirements, the coverage provided under an individual’s plan may change, carriers may leave a coverage area or discontinue plans. Also, employers are not required to offer the same coverage in future years.


Are individuals required to have health coverage? 


Yes, most U.S. citizens must obtain health insurance coverage or they will be subject to penalties. Penalties are scheduled to increase on an annual basis, based on income. There are exceptions for low-income individuals and those who are unable to obtain affordable coverage.


What are the penalties for individuals who don't have health coverage?


The penalties for individuals who are not enrolled in coverage will be the greater of a flat dollar amount or an applicable percentage of income. The flat dollar amount for 2016 is $695. After 2016, the flat dollar amount is indexed for inflation. The applicable percentage of income is 2.5 percent for 2016 and later years. The penalty for children is half of that for an adult. A family's total penalty generally cannot exceed 300 percent of the adult flat dollar penalty or the national average annual premium for the "bronze" level of coverage through an insurance exchange.


How long can my adult child remain covered under my health plan?


Health plans are required to permit children to stay on family coverage until they turn 26. This rule applies to all plans in the individual market. Note that state law requirements may require offering coverage beyond age 26.


Is the coverage for my adult dependent taxable?


No, the value of the coverage is not subject to federal tax for the employee or dependent. The health care reform law revised the Internal Revenue Code to clarify that the cost of coverage for a taxpayer's child is excluded from income through the end of the year in which the child turns 26. However, state requirements may differ, so state taxes may apply.


Can I get coverage for my child who has a pre-existing condition?


Health plans that cover children are not able to deny coverage to your child under 19 years old based on a pre-existing condition.


What consumer protections will I get if I obtain insurance at work? 


Effective the first plan year after September 23, 2010, health plans are prohibited from placing lifetime limits on what they will pay for your medical care and they can only apply restricted annual benefit limits. Insurers will no longer be able to arbitrarily cancel your insurance policy when you get sick, except in cases of fraud or material misrepresentation.

Health plans will be prohibited from denying coverage to children with pre-existing conditions. This applies to all non-grandfathered and grandfathered plans.
All non-grandfathered group health plans must provide coverage for preventive services. Recommended prevention and vaccination services will be covered without any deductibles or copayments. Plans must also have a straightforward and independent appeals process so you can appeal decisions by your health insurance company.
Can my insurance company terminate my coverage if I get sick?
Effective the first plan year after September 23, 2010, insurance companies are prohibited form retroactively dropping, or rescinding, your coverage when you get sick. Rescissions of coverage will only be allowed in cases of fraud or material misrepresentation. This rule will apply to all non-grandfathered and grandfathered plans.
When does free preventive care start and will it affect my plan?
Effective for plan years beginning after September 23, 2010, all non-grandfathered group health plans and plans in the individual market must provide coverage for preventive services. Recommended prevention and vaccination services will be covered without any deductibles or copayments. Seniors enrolled in Medicare will also no longer have to pay for proven preventive services.

Effective for plan years beginning on or after Aug. 1, 2012, non-grandfathered health plans must provide additional preventive services for women without cost sharing, such as coverage for well woman visits, breastfeeding support and contraception. Exceptions to the contraceptive coverage requirement apply to religious employers.
Did the health care reform law eliminate COBRA? 
No. The health care reform law did not eliminate COBRA or change the COBRA rules.
Did the health care reform law extend the COBRA premium subsidy extension?
No. The health care reform law did not extend the eligibility time period for the COBRA premium reduction. Eligibility for the subsidy ended on May 31, 2010; however, those individuals who became eligible on or before May 31, 2010 can still receive the full 15 months as long as they remain otherwise eligible.
Did the health care reform law extend the time period I can have COBRA beyond 18 months?

No. The health care reform law did not extend the maximum time periods of continuation coverage provided by COBRA. COBRA establishes required periods of coverage for continuation health benefits. A plan, however, may provide longer periods of coverage beyond those required by COBRA.

COBRA beneficiaries generally are eligible for group coverage during a maximum of 18 months for qualifying events due to employment termination or reduction of hours of work. Certain qualifying events, or a second qualifying event during the initial period of coverage, may permit a beneficiary to receive a maximum of 36 months of coverage. Individuals who become disabled can extend the 18 month period of continuation coverage for a qualifying event that is a termination of employment or reduction of hours.

To qualify for additional months of COBRA continuation coverage, the qualified beneficiary must:


  • Have a ruling from the Social Security Administration that he or she became disabled within the first 60 days of COBRA continuation coverage (or before); and
  • Send the plan a copy of the Social Security ruling letter within 60 days of receipt, but prior to expiration of the 18-month period of coverage.
If these requirements are met, the entire family qualifies for an additional 11 months of COBRA continuation coverage.
How does the health care reform law help me learn more about my health plan coverage?
Your health insurance company or group health plan is required to provide you with an easy-to-understand summary about benefits and coverage. This requirement is designed to help you better understand and evaluate your health coverage choices. This summary is called a Summary of Benefits and Coverage, or SBC. You may also request a glossary of terms from your health plan or health insurer. The glossary includes definitions for commonly used terms in health insurance coverage, such as "deductible" and "copayment."



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