10 Key Health Reform Topics

The Affordable Care Act (ACA) is changing the healthcare industry. We’re here to help you make sense of what these changes mean for you. Here are the 10 key terms and topics you should know.

  1. Guaranteed Issue

  2. The Individual Mandate

  3. Grandfathered Plans

  4. New Marketplaces

  5. Open Enrollment

  6. Essential Health Benefits

  7. Metal Level Plans

  8. Federal Subsidies and Tax Credits

  9. ACA Taxes

  10. Play-or-Pay

1. Guaranteed Issue

As of January 1, 2014, health insurance issuers must accept every individual in the state that applies for coverage regardless of health, age, gender, or other factors (including pre-existing conditions).

return to top

2. The Individual Mandate

Starting in January 2014, individuals will be required to have health insurance that qualifies as minimum essential coverage or risk paying a tax penalty for every month they are uninsured.

IndividualMandate

return to top

3. Grandfathered Plans

When the Affordable Care Act (ACA) was enacted on March 23, 2010, President Obama said that if Americans liked their coverage, they could keep it.  Therefore, the ACA allows carriers to distinguish plans that existed prior to March 23, 2010 (Grandfathered Plans) and those that came afterward (Non-Grandfathered Plans). Since Grandfathered Plans were intended to stay as they existed as of March 23, 2010, they are not subject to many of the ACA’s requirements.

Learn more about Grandfathered Plans and why they are important:

return to top

  4. New Marketplaces

The Affordable Care Act (ACA) creates new ‘marketplaces’ (also known as ‘exchanges’) where individuals and small businesses will be able to purchase health insurance for coverage beginning in 2014. California’s health insurance marketplace is known as Covered California. In addition to buying coverage via Covered California, individuals and small business will be able to purchase health care the way they do today through brokers and directly through health insurance carriers.

Blue Shield is planning to participate on Covered California in both the Individual and Small Business markets.

Learn more about Covered California:

return to top

5. Open Enrollment

October 1, 2013 is the first day individuals, families and small businesses can apply for coverage beginning in 2014. This Open Enrollment period lasts until March 31, 2014.

Individual Open Enrollment

Open-Enrollment for 2014: Enrollment in health plans effective in 2014 will begin on October 1, 2013 and end on March 31, 2014. In the past, individuals who were purchasing their own health coverage could apply at any time. However, beginning with coverage effective on January 1, 2014, applications will generally only be accepted during this open enrollment period. There are exceptions for “special enrollment” within 60 days of a life-changing event, such as the loss of a job, death of a spouse or birth of a child. This is similar to how Open Enrollment periods work for coverage through an employer.

Open Enrollment for 2015 and beyond: Annual open enrollment periods for individuals and families purchasing their own health coverage will be held October 15-December 7 of each year with an initial effective date of January 1st of the following year.

Small Business Open Enrollment

Small business employers will have an annual election period prior to the group’s annual open enrollment period. For 2014, open enrollment for small businesses will begin on October 1, 2013. After that date, employers can begin participating at any time in the year (rolling enrollment), but employees can only enroll or change plans once a year, unless they qualify for a special enrollment period.

return to top

6. Essential Health Benefits

All non-grandfathered health plans offered in the individual and small business markets, both inside and outside of Covered California, will be required to offer a core package of benefits and services known as "essential health benefits," which must include coverage within at least the following 10 categories:

Ambulatory patient services

Prescription drugs

Emergency services

Rehabilitative and habilitative services and devices

Hospitalization

Laboratory services

Maternity and newborn care

Preventive and wellness services and chronic disease management

Mental health and substance use disorder services, including behavioral health treatment

Pediatric services, including oral and vision care

return to top

7. Metal Level Plans

Under the Affordable Care Act, all non-grandfathered, health plans offered in the individual and small business markets, both inside and outside of Covered California, will be required to provide coverage at a "metal level" – Platinum, Gold, Silver and Bronze. The metal levels are based on the actuarial value (AV): Bronze (60 percent AV), Silver (70 percent AV), Gold (80 percent AV) or Platinum (90 percent AV). What this means is that someone who buys a silver plan would have to pay 30 percent of health care costs, while the plan covers 70 percent.

There is also a catastrophic plan for the individual market only that will cover the essential health benefits plus three primary care visits per year. The catastrophic plan can only be sold to consumers under age 30 and consumers who are exempt from the individual mandate as a result of low income or hardship.

return to top

8. Federal Subsidies

Starting in 2014, subsidies will be available for consumers whose annual income is between 134% and 400% of the Federal Poverty Level (FPL) and who meet other applicable guidelines. These cost-sharing reductions and advanced premium tax credits will lower the cost of premiums and out-of-pocket expenses for health coverage purchased through Covered California. Those with an FPL under 134% may be eligible for Medi-Cal.

Tax credits will also continue to be available to small businesses with no more than 25 full-time equivalent employees to help offset the cost of providing coverage. Learn more about the small business tax credit.

return to top

9. ACA Taxes

The ACA requires that certain taxes be collected to fund aspects of the law, including Covered California—the statewide healthcare marketplace (aka the Exchange). 
For an overview of taxes beginning January 1, 2014, download our ACA tax fact sheet (PDF, 24KB).

return to top

10. Play-or-Pay

Starting on January 1, 2014, the Affordable Care Act (ACA) will require companies over a certain size to offer affordable health plan coverage to full-time employees and their dependents or face a penalty if an employee receives federally-subsidized coverage from Covered California (aka: The Marketplace/Exchange). Learn more about the Play-or-Pay provision.

return to top