HOW HEALTH INSURANCE EXCHANGE WORKS?
Effective January 1, 2014, as part of the Affordable Care Act (ACA), all Americans are required to obtain a minimum health insurance or be taxed by the government. U.S. citizens who do not have a minimum amount of health coverage (essential health benefits) will receive a penalty of $95 or 1% of their taxable income, whichever is greater and will increase to year 2016.
The ACA Law requires Health Insurance to be “guaranteed issue”. That means a person or a family cannot be denied for health insurance or charged more because of health conditions which she/he already has. People who do not get health insurance at work, or cannot afford it, may be able to get it through an Exchange.
Individuals not covered by a Government Health plan have three options to obtain Health insurance in January 2014:
1) Get Coverage through their employer, if available.
2) Buy Health Insurance through their state-sponsored Individual Market Exchange or through the traditional market from Insurance Companies
3) Go uninsured and pay a penalty, unless exempt.
All plans must include at least these ten “Essential Health Benefits” as defined by the Health Care Reform Law.
1.Prohibitions on lifetime and annual dollar limits
2.Prohibition on rescissions
3.Preventive services without participant cost sharing
4.Medical plan eligibility for dependent children up to age 26
5.Summary of Benefit and Coverage (SBC) and uniform glossary, and 60-day advance notice of material modifications
6.Prohibition on discrimination in favor of highly compensated employees (HCEs)
7.Elimination of pre-existing condition exclusions
8.Medical loss ratio requirements
9.New PPACA internal claim and appeal, and external review requirements
10.Prohibition on waiting periods in excess of 90 days
Individuals who do not have access to affordable minimum essential health benefits may buy a health plan from the Exchange and get a credit or subsidy if they meet income requirements. Credits and subsidies may help with the cost of premiums and out-of-pocket health care ex-penses. There are certain income requirements applied for subsidies and credits.
The exchanges do not replace buying health insurance privately. The exchanges are simply a new place to shop and buy health insurance. You will still have the options to buy the health insurance of your choice directly from the Insurance Companies.
There are four levels of coverage for the Exchange. These Exchange plans will be offered in a tiered format. Each tier will have several plans from which to choose, and will include the required essential health benefits. These tiers are named after precious metals:
1)Bronze – 60% coverage. Has the lowest monthly premium, but cost shares (co-payments) will be higher whenever health care services are provided.
2)Silver – 70% coverage.
3)Gold – 80% coverage.
4)Platinum – 90% coverage. Has the highest monthly premium, but cost shares (co-payments) will be the lowest.
Plans offered directly by insurance must contain the ten Essential Health Benefits, and may of-fer plans equal to or exceeding the above tiered plans.
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