To understand Obamacare, you need to understand the vocabulary it uses. Here are the most important terms you need to know.
Affordable Care Act (ACA)
The comprehensive federal health care reform law enacted in March 2010 that goes into full effect January 1, 2014. Also known as “Obamacare” or “Health Care Reform.”
The percentage of charges you must pay when you receive a covered service. Your health plan pays the rest. Coinsurance amounts vary depending on your plan and the service.
A fixed dollar amount you must pay out of your own pocket for covered services or prescriptions. Your health plan pays the rest. Copayments vary depending on your plan and the service. For example, a plan may require a $50 co-pay for doctor's visits or a $15 co-pay for prescriptions.
The set amount you must pay for health care services before your health plan coverage begins to pay---for example, if you have a plan with a $1,000 deductible, you must pay that amount out of your own pocket before your plan will pay any amount (except for services not subject to a deductible such as preventive health care).
A spouse, child, or domestic partner, who is covered under a policyholder or subscriber’s plan.
Obamacare provision requiring employers with 50 or more workers to provide minimally adequate insurance for all full-time employees or pay a per-employee penalty. The mandate was waived for one year by President Obama and will take effect in 2015.
Essential Health Benefits
A set of ten health care services that must be covered by plans for individuals and employees of small businesses, starting in 2014. These services include: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care.
A group health plan that’s had at least one person enrolled in it at all times since March 23, 2010, or that a subscriber purchased on or before March 23, 2010, and meets other regulatory requirements. Grandfathered plans are subject to some ACA requirements and exempt from others. The plan’s issuer may make changes to the coverage as long as they are within certain limits.
Health Insurance Exchanges
Also called "marketplaces," state or federally run markets where you can shop, compare, and buy health care coverage. Links to all 50 state exchanges can be found at www.healthcare.gov/what-is-the-marketplace-in-my-state.
Obamacare requirement that all adults obtain minimally adequate health insurance coverage or be required to pay a penalty. For 2014, individuals will avoid the penalty if they obtain coverage by March 31, 2014. There are exemptions for poverty and hardships.
The definition of “large employer” is different for different purposes. In relation to the SHOP, an employer with 51 or more full-time equivalent employees can’t purchase coverage through the SHOP until 2016. In 2016, the SHOP becomes available to employers with 51 to 100 employees. States may allow all employers to purchase coverage in the SHOP in 2017. The ACA has a different definition for "large employer" in relation to the employer shared responsibility mandate and potential tax penalties to be paid by the employer. In this case, a "large employer" has 50 or more full-time equivalent employees. The potential tax penalty is delayed until 2015.
Short for "modified adjusted gross income." Amount used to determine whether individuals qualify for tax credits to purchase health insurance through their state exchange. For most people, MAGI consists of all income minus certain deductions, including those for IRA and retirement plan contributions, the self-employed health insurance deduction, and health savings account deduction.
The four levels of coverage available through exchange plans:
- bronze, which covers 60% of covered benefits
- silver, which covers 70% of covered benefits
- gold, which covers 80% of covered benefits, and
- platinum, which covers 90% of covered benefits.
Open Enrollment Period
Time period each year when health insurers must accept new members. For the state exchanges, the open enrollment period to obtain coverage for 2014 is October 1, 2013 through March 31, 2014. For later years, it will be the seven-week period from October 15 to December 7. Individual insurers have their own open enrollment periods for insurance not sold through the state exchanges. Insurers need not accept members outside of the open enrollment period unless there is a “qualifying event,” such as a change in family or dependency status or loss of coverage.
The amounts you pay to providers for health care services you receive, including copayments, coinsurance, and deductible payments, in contrast to the premium you pay each month for your health plan coverage.
The maximum amount of out-of-pocket expenses you must pay in each calendar year for health benefits. For example, if your health plan has a $12,000 out-of-pocket maximum, after you pay that amount your insurer must pay 100% of any additional costs during that calendar year. For 2014, the maximum allowed under Obamacare is $6,350 for an individual and $12,700 for a family policy.
A medical condition that a person has before he or she applies for new health plan coverage. Under Obamacare, insurers cannot deny any person coverage due to a pre-existing condition.
The amount you and/or your employer pay (usually each month) for health insurance coverage.
Health services provided to prevent diseases (or injuries) rather than curing them or treating their symptoms. Examples include mammograms and pap smears.
A physician, health care professional, or health care facility that is licensed, certified, or accredited by the state to provide health care services.
Short for Small Business Health Options, SHOP is an Obamacare program designed to help small businesses--those with 50 or fewer full-time employees--obtain affordable health insurance for their employees. Each state has a SHOP exchange through which small businesses may purchase employee health insurance.
The amount individuals who fail to obtain health coverage will be required to pay the IRS. For 2014, the penalty is $95 per adult and $47.50 per child (up to $285 for a family) or 1% of income, whichever is greater.