Learn More about the Patient Protection and Affordable Care Act

You’ve heard the term over and over throughout the years, but what exactly is the Patient Protection and Affordable Care Act (PPACA)? The Patient Protection and Affordable Care Act was signed into law by President Barack Obama in 2010. It is also referred to as the Affordable Care Act or Obamacare. The Act was implemented to improve the quality of health insurance, regulate the health industry, and provide more Americans with affordable health insurance.

The Patient Protection and Affordable Care Act - What does it do?

In 2013, over 44 million Americans were living without health insurance because of its high cost. The PPACA accomplishes the following and more:

  • Makes it mandatory that every American have health insurance through a private provider or a federally assisted program;

  • Offers cost assistance and affordable quality premiums through the health insurance marketplace;

  • Healthcare providers are no longer allowed to drop you if you become ill, even if you made an honest mistake on your health care application;

  • Expands Medicaid eligibility so low income families could pay for the cost of health insurance;

  • Permits young adults to stay on their parents’ plan until age 26;

  • Terminates lifetime limits on health insurance coverage;

  • Prohibits being denied coverage because of a past illness or be charged more based on gender; and

  • Reforms Medicare by providing Medicare recipients with new protections and benefits.

The Health Insurance Marketplace

The Health Insurance Marketplace is the online marketplace where Americans can now shop for more affordable health care insurance. To do so, personal information will be entered to determine whether someone is eligible for Medicaid, lower premiums, or reduced out-of-pocket costs.

Refer to your state’s marketplace to shop for health care insurance at any time to determine your eligibility. Remember that you can only enroll during the enrollment period at healthcare.gov. The open enrollment period for the 2015 year begins November 15th, 2014. Since the PPACA requires you to have health insurance, make sure to enroll or you will be paying a penalty for each month you are without it. This penalty is 1% of your income or $95 per adult, whichever is greater. In 2015, the penalty increases to 2% of your income or $325 per adult. These numbers will continue to increase every year.

How the Patient Protection and Affordable Care Act Relates to Business Owners

Your business size will affect the type of penalties you incur if you decide not to provide health care insurance for your employees. If you are a business owner with:

  • 25 full-time employees or less - you will receive tax breaks of up to 50% if you provide health insurance to your employees.

  • 50 full-time employees or more - you may provide insurance that meets PPACA standards or starting January 2015, pay a $2000 tax per employee (except for your first 30 employees).

  • 99 full-time employees or less - you should shop for insurance on your state’s health insurance marketplace to cover your employees. If you decide to provide health insurance to early retirees between the ages of 55 and 64 because you may be eligible for federal financial assistance.

Healthcare reform will continue to trickle out until 2020. As the years have gone by since its inception, the Patient Protection and Affordable Care Act has significantly decreased the number of uninsured Americans and continues to do so.