Affordable Care Act
Individual mandate – The individual mandate is the provision of the Affordable Care Act (ACA) requiring most people without employer-based coverage to buy qualifying coverage on their own, or pay a tax penalty. The goal of the individual mandate is to make coverage more affordable for less healthy people by bringing more healthy people into the insurance system and thereby balancing costs.
Pre-existing condition coverage – This is sometimes called the “guaranteed issue” provision of the law. It requires health insurance companies to extend coverage to all applicants regardless of their medical history or the presence of pre-existing medical conditions. Prior to 2014, many states could decline your coverage for individually purchased health insurance based on your pre-existing medical conditions.
Employer mandate – This provision of the ACA requires employers with 50 or more full-time workers (or the equivalent in part-time workers) to provide employer-sponsored health insurance to employees. Employers who fall under the employer mandate in 2014 but choose not to provide health insurance to workers may face financial penalties.
Subsidies – The ACA provides subsidies to make coverage more affordable for individuals and family who are required to buy it on their own. The amount of subsidy help received by consumers varies and is structured so that the insurance premium an individual or family will have to pay will not exceed a specific percentage of income, ranging from 2% for those with incomes up to 133% of the Federal Poverty Level (FPL) to 9.5% for those with incomes between 300 and 400% of the FPL.
Online health insurance exchanges – The ACA called for the establishment of online state health insurance exchanges by 2014 – websites where individual consumers and small businesses can compare and shop for health insurance plans available in their state. State-sponsored health insurance exchanges facilitate online enrollment in health insurance plans and enable eligible persons to obtain subsidies to help make their coverage more affordable.