The Affordable Care Act: A Review and Update

As explained on the official government health care site, the Affordable Care Act has three goals:

  • Make affordable health insurance available to more people. The law provides consumers with subsidies (“premium tax credits”) that lower costs for households with incomes between 100% and 400% of the federal poverty level.
  • Expand the Medicaid program to cover all adults with income below 138% of the FPL. (Not all states have expanded their Medicaid programs.)
  • Support innovative medical-care delivery methods designed to lower the costs of health care generally.

The law affects both individuals and companies. For example, according to, the law:

  • Requires insurance plans to cover people with preexisting health conditions, including pregnancy, without charging more.
  • Provides free preventive care.
  • Gives young adults more coverage options.
  • Ends lifetime and yearly dollar limits on coverage of essential health benefits.
  • Helps you understand the coverage you’re getting.
  • Holds insurance companies accountable for rate increases.
  • Makes it illegal for health insurance companies to cancel your health insurance just because you get sick.
  • Protects your choice of doctors.
  • Protects you from employer retaliation.

Business rules and benefits

As noted on the IRS site, small companies — typically those with fewer than 50 employees — can purchase insurance through the Small Business Health Options Program.

Such companies:

  • Must withhold and report an additional 0.9% on employee wages or compensation that exceeds $200,000.
  • May be required to report the value of the health insurance coverage they provided to each employee on his or her Form W-2.
  • Must file an annual return reporting certain information for each employee they cover if they provide self-insured health coverage to their employees.

Companies may be eligible for the Small Business Health Care Tax Credit if they cover at least 50% of their full-time employees’ premium costs and have fewer than 25 full-time equivalent employees.

Larger employees, based on their size, may also be able to purchase insura