Understanding Essential Benefits Under Health Care Reform
Health insurance plans must offer 10 Essential Benefits to comply with the Affordable Care Act (ACA). These benefits are guaranteed to anyone, including people with pre-existing conditions who may have been denied coverage in the past. These essential benefits also expand the list of preventive services that are covered 100% under the new law.
After January 1, 2014, the new law requires that all individual and employer-based health insurance plans must include these 10 Essential Benefits:
- Ambulatory patient services
- Emergency services
- Maternity and newborn care
- Mental health and substance abuse services
- Prescription drugs
- Rehabilitation, habilitation services and devices
- Laboratory services
- Preventive, wellness and chronic disease management
- Pediatric services with oral and vision care
100% Coverage for Preventive Care
Prevention, wellness care, and screenings will be 100% covered under Obamacare, including guaranteed acceptance for pre-existing conditions (routinely excluded in the past). Some of the services that fall into this extensive category include women’s health (prenatal care, contraceptives, domestic violence counseling, and disease screenings), healthy-child screenings and immunizations, cancer screenings, behavioral health, and dental/vision coverage for children under 18.
Young adults who enroll in a catastrophic plan are also eligible for preventive care services. For most young, healthy adults, insurance hasn’t routinely been a priority. Now it is mandatory. Young adults 26 years and younger can remain on their parents’ insurance plan, even if the child is married.
What are Metal Tier Plans?
The ACA has defined qualified coverage under four levels called the Metal Tier plans defined by their percentage of covered benefits and levels of premiums. They all meet the Essential Benefit requirements.
|Tier of Coverage – Metal||Actuarial Level of Coverage||Level of Premium|
What is Actuarial Value?
The four metal plans (platinum, gold, silver, and bronze) are based on different actuarial values. The actuarial value is the amount of medical expenses paid over the course of a typical year, for an average policyholder. It does not reflect how much the policy would pay for any particular medical bill, but it measures the percentage of expected medical costs a health plan will cover based on the standard population of covered individuals. Metal plans higher actuarial values reflect less cost-sharing across a population. This results in higher premiums associated with that plan level.
The actuarial value of a Silver plan, for example, is 70 percent. Across a standard population, individuals would be responsible for 30 percent of the cost of deductibles and copays, over a typical year.
2016 Out-of-Pocket Limits
Maximum out-of-pocket expenses are capped at $6850 for individuals; $13,700 for families.
Young Adults Essentials
Young adults under the age of 30 often opt out of getting health insurance because they are generally in good health and sometimes don’t have employer-based benefits. Under the new law young adults will be required to get coverage, but they do have the option of choosing a less expensive catastrophic plan that includes the essential benefits and preventive services. These plans lower costs by limiting the number of doctor visits they will cover. However, if an individual qualifies for tax credits they will not be allowed to apply them towards a catastrophic plan.
More on Catastrophic Plans
Catastrophic plans cover preventive services at 100%, including three yearly office visits. The deductibles for these plans can be high - hence the term “catastrophic”, since they’re only going to protect you from significant loss due to a substantial medical event. Catastrophic plans will also be made available to low-income individuals in states with expanded Medicaid.
Because of the higher deductibles associated with these plans, bronze-level plans combined with a health savings account (HSA) may actually offer a better and less expensive option for many young adults. ColoHealth Personal Benefits Managers can explain more about catastrophic and fully-insured accident plan options.
What About My Existing Plan? Can I Keep it?
In some cases, you may keep your existing plan, though that might not always be the best option for you. If your plan has been continuously in effect since March 23, 2010 (when President Obama signed the ACA bill), your plan is considered to be a grandfathered plan. You may keep a grandfathered plan as long as the insurance company providing it still offers it in your area. However, if you have a pre-existing condition or want to take advantage of tax subsidies, keeping your grandfathered plan might not be the best choice. In those cases, switching to an ACA-approved plan would allow you to have your pre-existing condition covered or you to take full advantage of the tax subsidies and cost sharing options offered by the Affordable Care Act. In other cases, the insurance company providing your current health insurance plan might extend the renewal date of your policy, allowing you to keep your existing coverage.
How ColoHealth Works to Save You Money
We believe in breaking down the complicated options in the ACA, so that you can find the best coverage and strategy to meet your needs. Instead of representing just one or two insurance carriers, we offer quotes and information on all available plans, and help you understand how to minimize your net costs. We make it simple and easy to understand and implement strategies to lower your net costs – to lower your taxable income, reduce your tax bill, maximize your tax credits, and even build a tax-favored fund for medical expenses not covered by your health plan.
Many ACA-qualified health plans can be combined with a personal health savings account (HSA). An HSA allows you to contribute tax-free funds you can use to pay for medical expenses. Combined with an HSA-qualified health insurance plan, an HSA tax-favored account can:
- lower your taxable income
- build tax-favored savings each year
- be used for retirement after 65
- enhance health tax-credit eligibility
- increase personal control over health care decisions
Choosing an HSA-qualified health plan and contributing the maximum allowable amount into your HSA account is a strategy you may want to consider as a way to minimize your costs. You can learn more about the advantages of HSAs by visiting our Health Savings Account FAQ page.
Also, be sure to check out our Additional Benefits page, to learn more ways to minimize your costs for lab work, prescription drugs, and other medical expenses.
ColoHealth brings 25 years of insurance expertise to help simplify your health care options and save you money. We can help you choose the best plan for you, apply for tax credits, and start saving more of your money. Call your ColoHealth Personal Benefits Manager at (800) 913-6381 or email us at info@ColoHealth.com to find your best strategies for surviving health care reform. Our services are always free!
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