Key reform provisions for individuals and families

The Affordable Care Act, or ACA, took effect Jan. 1, 2014. If you currently purchase or plan to purchase health insurance for yourself or for your family, you will be affected.

Helpful information for health care decisions

Providence Health Plan offers this information on some of the laws applicable to health care reform so that you can understand the general legal landscape and seek your own counsel. Where possible, we provide tips for how to find additional information from regulators. This guide is offered for general educational purposes only and should not be taken as legal advice.

Here are the key topics that matter most when making health care decisions for 2014 and beyond.

Most individuals are required to have health insurance coverage.
The ACA requires most U.S. citizens and legal residents to have basic health coverage beginning Jan. 1, 2014, or pay a penalty. Exceptions to this requirement include people with certain religious beliefs, members of Native American tribes, undocumented residents, people who are in prison and people whose income is below a certain level.

If you don't purchase health insurance, the federal government will assess a penalty that you will have to pay on your federal tax return. The penalty will vary by person based on income and household size. In 2014, the penalty is $95 per person and $47.50 per child, up to $285 per family or 1 percent of the family income, whichever is greater. Penalties will increase each subsequent year.

Individuals will not be denied coverage due to preexisting conditions because plans are no longer underwritten.
Health insurance companies are required to provide coverage to anyone who applies for it and cannot charge premiums based on health status. That means you're able to get health insurance coverage, even if you were previously denied. And you can't be charged more if you have significant health issues.

Benefits are more comprehensive.
All health plans are required to cover a comprehensive package of items and services known as essential health benefits. These essential health benefits include services such as outpatient care, emergency services, mental health and substance abuse care, rehabilitation services and devices, and preventive care.

Total out-of-pocket expenses are capped.
Out-of-pocket expenses, such as copays and deductibles, are capped. Most health plans must cover a minimum of 60 percent of average health care costs. All individual plans are categorized based on one of four actuarial value levels, known as "metal levels" as follows: bronze, silver, gold or platinum, with platinum plans offering the richest level of benefits. Catastrophic plans, described below, are exempt from this requirement.

Some individuals are eligible for tax credits and/or subsidies to help offset the cost of insurance coverage.
Many individuals and families qualify for subsidies to help pay their premiums as well as their out-of-pocket expenses. Eligibility is determined based on income and family size.

Coverage can be purchased only during open enrollment unless you have a qualifying event.
Open enrollment in Oregon for 2015 plans started Nov. 15, 2014 and ended Feb. 15, 2015. You can purchase health insurance for the remainder of 2015 only if you have a qualifying event. Examples of qualifying events include marriage, divorce, and loss of insurance through your employer.

Catastrophic coverage is sold only to a specific group of people.
Catastrophic coverage is a health plan with a very high deductible. Catastrophic health insurance plans are available to individuals age 29 or younger or those exempt from the individual mandate because no affordable health plan is available to them or because of hardship.

Pediatric dental coverage is required with medical coverage.
Pediatric dental coverage either is embedded in an insurance company's health plan or it is available on a stand-alone basis. Embedded means that the dental coverage is integrated with the medical plan benefits. Stand-alone means that the pediatric dental benefits are separate from the medical plan benefits and are purchased separately. When you are shopping for health insurance, be sure to understand whether or not pediatric dental coverage is embedded.

Two important nuances in Oregon:

  • Pediatric dental coverage must be offered through the Federal Marketplace at HealthCare.gov though you are not required to purchase it along with a medical plan if it's not embedded.
  • If you purchase a medical plan outside of HealthCare.gov, you are required to purchase pediatric dental coverage if it isn't embedded, regardless of your age.

All Providence individual and family plans for 2015 have embedded pediatric dental except Standard and Essential plans.

Medical loss ratio
If insurers fall below a specific medical loss ratio limit - 80 percent for individuals - they are required by law to refund policy holders.

The ACA medical loss ratio is unique and is defined as the sum of incurred claims plus expenses to improve health care quality divided by earned premiums minus federal and state taxes and licensing fees. The calculation is done yearly, beginning Jan. 1 through Dec. 31.

In 2011, 2012 and 2013, Providence Health Plan met the medical loss ratio requirements established by the ACA. This means that we demonstrated fiscal responsibility and are not required to issue member rebates.

We understand there is a lot to consider. Use this guide to understand how health care reform affects you.