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 Healthcare.gov, 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.
- 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