Health Care Reform FAQ: Rights and Protections

Published August 21, 2014

Whether you need health coverage or have it already, the Affordable Care Act (ACA) offers new rights and protections that make coverage fairer and easier to understand.

Whether you need health coverage or have it already, the ACA offers new rights and protections that make coverage fairer and easier to understand.

Some rights and protections apply to plans in the Marketplace or other individual insurance, some apply to job-based plans and some apply to all health coverage.

How does the health care law protect me?

The ACA changes the way health insurance companies operate, extends the opportunity to get insurance to people who were not previously covered and expands the benefits of many policyholders while lowering the cost of care. Some of the specific ways it accomplishes this include:

  • Creating the health insurance marketplace (Marketplace) as a new way for individuals, families and small businesses to get health coverage
  • Requiring insurance companies to cover people with pre-existing health conditions
  • Helping you understand the coverage you’re getting
  • Holding insurance companies accountable for rate increases
  • Making it illegal for health insurance companies to arbitrarily cancel your health insurance just because you get sick
  • Protecting your choice of doctors
  • Covering young adults under age 26
  • Providing free preventive care
  • Ending lifetime and yearly dollar limits on coverage of essential health benefits
  • Guaranteeing your right to appeal your insurance company’s decisions

What if I don’t have health coverage?

If you can afford it but don’t have health insurance coverage, you may have to pay a penalty—and must also pay for all of your health care.

The penalty for 2014 is 1 percent of your yearly income or $95 per person for the year, whichever is higher. The penalty increases every year. For 2015, the fee is 2 percent of income or $325 per person, whichever is higher. For 2016 it is 2.5 percent of income or $695 per person, whichever is higher. After 2016, the fee will be adjusted for inflation.

It’s important to remember that paying the penalty won’t get you any health insurance coverage. You will be responsible for 100 percent of the cost of your medical care.

To avoid the penalty, you need insurance that qualifies as minimum essential coverage. If you’re covered by any of the following, you’re considered covered and don’t have to pay a penalty:

  • Any Marketplace plan, or any individual insurance plan you already have
  • Any employer plan (including COBRA), with or without grandfathered status (this includes retiree plans)
  • Governmental plans, such as Medicare, Medicaid or the Children’s Health Insurance Program (CHIP)
  • TRICARE (for current service members and military retirees, their families and survivors) and veterans’ health care programs
  • Peace Corps Volunteer plans
  • Self-funded health coverage offered to students by universities for plan or policy years that begin on or before Dec. 31, 2014.

Other plans may also qualify. Ask your health coverage provider.

Who doesn’t have to pay the penalty?

Some people with limited incomes and other situations can get exemptions from the fee. You may qualify for an exemption from the fee if you:

  • Are uninsured for fewer than three months of the year
  • Have very low income and coverage is considered unaffordable
  • Are not required to file a tax return because your income is too low
  • Would qualify under the new income limits for Medicaid, but your state has chosen not to expand Medicaid eligibility
  • Are a member of a federally recognized American Indian tribe
  • Participate in a health care sharing ministry
  • Are a member of a recognized religious sect with religious objections to insurance
  • Are incarcerated (either detained or jailed) and not being held pending disposition of charges
  • Are not lawfully present in the United States

Also, if you have certain circumstances that affect your ability to purchase health insurance coverage (for example, you are homeless or you were evicted in the last six months), you may qualify for a hardship exemption from the penalty. You can apply for a hardship exemption through the Marketplace.

What happens if I get insurance but then can’t pay my premiums?

In general, your coverage obtained through the Marketplace may be terminated if you fail to pay your portion of the monthly premium. However, issuers must provide a grace period of three consecutive months for QHP enrollees who:

  • Receive a premium tax credit;
  • Have paid at least one full month’s premium during the benefit year; and
  • Then fail to pay their portion of the monthly premium.

If you fail to pay all outstanding premiums following the three-month grace period, the issuer must then terminate your coverage, retroactive to the last day of the first month of the grace period. For all other QHP enrollees, QHPs must grant a grace period in accordance with applicable state law.

If your coverage is terminated for non-payment of premiums, you do not qualify for a special enrollment period due to the resulting loss of minimum essential coverage. However, you may become eligible for a special enrollment period based on other circumstances. Additionally, during the annual open enrollment, you will be able to apply for a determination of eligibility, and, if you are determined eligible, youwill be permitted to select a QHP for 2015. In both of these cases, the enrollment would be considered a new enrollment. Thus, the issuer cannot attribute any new premium payments from you toward the outstanding debt from the prior, terminated coverage.

What kinds of health insurance don’t qualify as coverage?

Health plans that don’t meet minimum essential coverage don’t qualify as coverage. If you have only these types of coverage, you may have to pay the penalty:

  • Coverage only for vision care or dental care
  • Workers’ compensation
  • Coverage only for a specific disease or condition
  • Plans that only offer discounts on medical services

What if I’m pregnant or plan to get pregnant?

All Marketplace plans cover pregnancy and childbirth. This is true even if your pregnancy begins before your coverage takes effect. Having a baby qualifies you for a special enrollment period. This means that after you have your baby you can enroll in or change Marketplace coverage even if it’s outside the open enrollment period. When you enroll in the new plan, your coverage can be effective from the day the baby was born.

Also, maternity care and childbirth are covered by Medicaid and CHIP. These state-based programs cover pregnant women and their children below a certain income level. Eligibility and benefits are different in each state. Medicaid and CHIP income levels are different.

Check your state’s health insurance website to see whether you’re eligible right now for coverage for yourself and your baby through Medicaid or CHIP.

What if I have a grandfathered health insurance plan?

If you are covered by a grandfathered plan, you may not get some rights and protections that other plans offer.

“Grandfathered” plans are those that were in existence on March 23, 2010, and haven’t been changed in ways that substantially cut benefits or increase costs for consumers. There are two types of grandfathered plans: job-based plans and individual plans (the kind you buy yourself, not through an employer). To find out whether your plan is grandfathered, check your plan’s materials, or, for a job-based plan, check with your employer.

All grandfathered plans must still end lifetime limits on coverage, end arbitrary cancelations of health coverage, cover adult children up to age 26, provide a summary of benefits and coverage and spend a certain percentage (either 80 or 85 percent) of premiums on health care.

Grandfathered plans do not need to cover preventive care for free, guarantee your right to appeal insurance companies’ decisions, protect your choice of doctors and access to emergency care, or publicly justify premium increases of 10 percent or more.

Additionally, individual grandfathered plans do not have to end yearly limits on coverage or provide coverage to people with pre-existing health conditions.

How do I appeal a health plan decision?

If your health insurer refuses to pay a claim or ends your coverage, you have the right to appeal the decision and have it reviewed by a third party. Insurers have to tell you why they’ve denied your claim or ended your coverage, and they have to let you know how you can dispute their decisions.

There are two ways to appeal a health plan decision:

  • Internal appeal. If your claim is denied or your health insurance coverage canceled, you may ask your insurance company to conduct a full and fair review of its decision. If the case is urgent, your insurance company must speed up this process.
  • External review. You can take your appeal to an independent third party for review. Doing an external review means that the insurance company no longer gets the final say over whether to pay a claim.