Affordable Care Act Basics (“Obamacare”) for Washington State Residents

1.What IS it? The AFA is a federal law designed to help people get medical insurance coverage.  For employers who have 50 or more Full Time or Full Time Equivalent (FTE) employees, it is mandatory to provide affordable health insurance or else pay a tax penalty. For everyone else, it provides a route to obtaining insurance through “insurance exchanges”, which function as an open marketplace for you to shop for insurance.  If you can afford coverage but nonetheless choose not to obtain it, you will owe a tax penalty.   The tax penalties start small, but increase over time if you continue not to get insurance.  Of course, if you don’t get insurance, you will also have to pay out of pocket for your medical expenses, so it’s smart to get coverage.  See http://www.healthcare.gov

2.What do I do if I’m Self-Employed? Use the insurance exchange. WA is ahead of many states in getting set up. See http://www.wahbexchange.org/ and http://www.wahealthplanfinder.org/

3.What IS a health insurance exchange? It’s a way for health insurance companies and persons seeking coverage to connect (the federal government calls the exchanges “the Marketplace”). To get in, you have to sign up during open enrollment (currently October 1, 2013 to March 31, 2014). The insurance companies make their coverage options available to individual members of the insurance exchange. In WA, the process is arranged via the state government. The insurance companies get to sell coverage plans to a much larger customer base and thereby lower the underwriting risks, and individuals get to sign up for coverage if their employer (or spouse’s employer) does not already make it available.  There are a variety of coverage options, and like any marketplace, the coverage options may change with the amount of money the customer is willing to pay.

4.What do I do if I own small business that has less than 25 employees? Must I provide health insurance? No. But if you want to, great! If you want to provide insurance but think your company can’t afford it, the company may be eligible for tax breaks on the employer portion of the insurance premiums to help out.  Employers with 25 or fewer employees are generally also eligible to obtain policies for their employees via the “Small Business Health Options Program” (SHOP). In WA SHOP is available through http://www.wahealthplanfinder.org/

5.What is “affordable” health insurance? If your company provides insurance, it is “affordable” if the employee’s premium is no more than 9.5% of the employee’s household income. Because you may not know your employee’s household income, a good practice is to have the employee’s share be no more than 9.5% of what you pay the employee as reported on the W-2 issued by your company.

6.I’ve got a pre-existing condition; can I still get coverage? Yes!

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