About The Affordable Care Act

Q: What is the Affordable Care Act (ACA)?

A: The federal health care reform law, called the Patient Protection and Affordable Care Act (ACA), is an initiative to increase health insurance coverage among U.S. residents. Enacted in 2010, the law’s purpose is to increase the quality and affordability of health insurance, lower the uninsured rate by expanding public and private insurance coverage, and reduce the costs of health care for individuals and the government. While parts of the ACA have been enacted, some key provisions take effect in future years.

The ACA’s individual mandate requires all U.S. residents, subject to certain exceptions, to secure minimum essential health coverage for themselves and their dependents by January 1, 2014 or pay an annualized penalty tax for each month of non-compliance. Those who are unable to obtain coverage under an employer plan by the deadline may secure private coverage through a state or the national health insurance exchange.

ACA requires employers with 50 to 99 full-time employees or full-time equivalents to offer affordable and adequate health coverage starting January 1, 2016 or pay a penalty tax. Employers with 100 or more full-time employees or full-time equivalents will be required to offer affordable and adequate health coverage starting January 1, 2015 or pay a penalty tax. Larger employees will have to cover 70 percent of workers in 2015 and then 95 percent the following year and thereafter.

All of the group health Insurance Programs administered by PacFed comply with the ACA.

Q: Are employers responsible for notifying employees about the ACA?

A: The ACA requires employers to have distributed a Notice of Health Exchange (NOE) to their employees by October 1, 2013. The NOE informs employees that they may be able to purchase lower-cost insurance on the government-run health exchanges, but may lose their employer contribution if they choose to do so. It may also include a statement that the employer does not provide health insurance. Employers will not face a penalty if they failed to inform their workers by the stated deadline.

Q: What is the group health plan eligibility period?

A: The ACA prohibits group health plans and group health insurance issuers from imposing eligibility waiting periods of more than 90 days after hire for plan years beginning on or after January 1, 2104. However, a California law prohibits waiting periods of more than 60 days.

Q: What about the ACA’s Form W-2 requirements?

A: Effective in 2012, the ACA requires employers to report the cost of coverage under employer-sponsored group health plans on each employee’s Form W-2. However, employers that participate in multiemployer plans have the option of providing this information.

Q: Will employees receive a summary of benefits and coverage from PacFed?

A: PacFed continues to work with various health insurers to ensure that a Summary of Benefits and Coverage (a benefit summary) is distributed to plan participants in accordance with the timeline outlined under the ACA. Participants will also receive a glossary that defines many commonly used health insurance terms.

Q: Where can I find more information about ACA?