Key Provisions of the Health Care Law

President Barack Obama signed the Patient Protection and Affordable Care Act — also known as the Health Care Law — on March 23, 2010. With implementation occurring in phases, the first provisions (or parts) of the law went into effect in 2010, and the remaining provisions are scheduled to be implemented by 2020.

By year: 2015 | 2016 | 2017 | 2020 | Archived dates

2015

Key provisions taking effect in 2016:

Mandatory insurance for individuals — penalty increase
Mandatory insurance for employers

Mandatory insurance for individuals — penalty increase

What is it?
The health care law requires nearly everyone to purchase health care coverage by 2014 or pay a penalty. The penalty increases in 2015 from $95 or 1 percent of income to $325 or 2 percent of income, whichever amount is greater. The amount is assessed for each uninsured person.

Mandatory insurance for employers

What is it?
Employers with 100 or more full time equivalent employees will be required to offer benefits to all full-time employees or face a fine. Employers with 50 or more employees who do not offer health benefits or do not offer a certain level of benefits may have to pay one of the following types of annual penalties:

  • The Mandate Penalty ($2,000). This penalty applies if an employer does not offer group health coverage and at least one employee purchases subsidized coverage on the Marketplace. Employers will pay $2,000 for each full-time employee. The first 30 employees are exempt from the penalty.
  • The Qualification Penalty ($3,000). This penalty applies if an employer fails to offer a qualifying plan (minimum and affordable) to any employee and if any of those employees purchase subsidized coverage through the Marketplace. The penalty assessed is based on the number of employees who are not offered qualifying coverage and subsequently purchase subsidized coverage through the Marketplace.

What does it mean to me?
If you are an employer, you must decide if your company will continue to offer a group health plan, or instead will pay the penalty for failing to offer coverage. This provision is sometimes called the “play or pay” mandate.

2016

Key provisions taking effect in 2016:

Quality of care reporting
Mandatory insurance for individuals — penalty increase

Quality of care reporting

What is the quality of care reporting requirement?
All individual, group, and self-funded plans — with the exception of grandfathered plans — must submit an annual report to the U.S. Department of Health and Human Services (HHS) and to enrollees during the open enrollment period. In general, this report describes how the health plan’s benefits, coverage and provider reimbursement policies meet requirements to improve quality of care and outcomes, improve patient safety, prevent hospital readmissions, and implement activities to enhance members’ health and wellness. It will also indicate the percentage of total premiums spent on quality improvement activities.

What does it mean to me?
You will receive information on your plan’s quality and wellness programs during the open enrollment period.

What is IBC doing to help?
Independence Blue Cross is an industry leader in offering you high-quality preventive and wellness programs, and you can count on us to continue to lead by providing full disclosure on the quality and effectiveness of these services.

Mandatory insurance for individuals — penalty increase

What is it?
The health care law requires nearly everyone to purchase health care coverage by 2014 or pay a penalty. In 2016, the penalty increases in from $325 or 2 percent of income to $695 or 2.5 percent of income, whichever is greater. This amount is assessed for each uninsured person.

2017

Marketplaces may expand to include large groups

States will have the option of allowing large companies with more than 100 employees to buy health insurance through state-based health insurance marketplaces. These online marketplaces — which open in the fall of 2013 — make it easier for those purchasing health insurance to compare products and prices. Initially, only individuals who buy their own insurance and small businesses will be able to use these online portals. Marketplaces will work with state insurance departments to set and enforce insurance reforms and protections.

2020

Key provisions taking effect in 2016:

Excise tax on “Cadillac plans”
Elimination of “donut hole” coverage gap

Excise tax on “Cadillac plans”

What is it?
This part of the health care laws adds a 40 percent nondeductible excise or cadillac tax on generous health plans. Those are plans that cost at least $27,500 per year for a family plan and at least $10,200 per year for an individual plan.

What it means to me?
If you are covered by a comprehensive health plan with no deductible or that otherwise qualifies as a cadillac plan, the amount you spend on that plan will be taxed at the rate of 40 percent beginning in 2018.

Elimination of “donut hole” coverage gap

The health care law includes several provisions designed to reduce and then eliminate the coverage gap known as the donut hole. This coverage gap occurs during a period of in a specific year when a person’s Medicare’s Part D medication costs go over $2,830; it continues in that same specific year until that person’s out-of-pocket costs reach $4,550. This is the period when a Medicare member is in the donut hole.

Originally, a Medicare member in this situation was responsible for 100 percent of the costs of her or his medications. Once they reached the out-of-pocket maximum, Medicare paid 100 percent of the medication costs. The donut hole has been closing since the health care law was passed in 2010.

What it means to me?
The donut hole closes in 2020. Medicare and Medicare Advantage members enrolled in the Part D prescription drug program who do not receive Medicare Extra Help will pay 25 percent of the costs of their drugs until they reach the yearly out-of-pocket spending limit.

Where can I learn more?
Visit the government health care law website at Healthcare.gov.