By: Mary Thompson, Capstone Brokerage President, February 27, 2017

Last month President Trump signed and executive order to minimize the financial burden of the Affordable Care Act (ACA). Today what is being proposed as possible changes to the Affordable Care Act have become a hot topic in the news. While nothing has changed YET changes seem to be imminent. Currently this is what is being discussed by our government as changes to possibly go before congress.

Individual Mandate

One of the biggest changes being proposed is the elimination of the individual mandate. Currently the the individual mandates requires people who are able to afford insurance to obtain coverage or face penalties and taxes. The change that is being proposed would eliminate this mandate and there would no longer be a fine for not having insurance coverage. The biggest impact is that those who are deemed healthy may opt-out of having coverage which would drive up the cost for those who need it the most.

The employer mandate currently under the ACA requires companies that are deemed as a large employer (50+ FTE Equivalents) to provide affordable and minimum value coverage to their employees or face tax penalties. Federal rules usually cannot be undone with a pen stroke but require a new ¬rulemaking process to replace or delete them.

Subsidies

Currently under the A.C.A there are tax credits to those considered middle –income, based on a sliding scale of their household income to try to offset the cost of the coverage. The change being discussed would instead distribute these subsidies based on age rather then financial statues. This would create a way to provide higher subsidies based on your age in turn helping older Americans obtain subsidies, based on the knowledge that sickness typically comes with age. Therefore allowing coverage cost reductions to those who may need the coverage the most.

Health Savings Accounts.

Currently under the A.C.A. for this year an individual can save up to $3400 in a HSA Account tax free and families can save $6,750 tax free. The proposed change would allow people to put a higher amount, and allow a spouse to also make contributions tax free as well.

Some parts of the Affordable Care Act are not proposed to change, and would continue to remain the same.

Examples of aspects that are not proposed to change:

– Dependent coverage would have no change. Children would still be able to have coverage under their parents until the age of 26.

– Pre-existing condition clause would also remain the same. Meaning that no American could be denied coverage based on their health. Perhaps one of the most accepted terms of the Affordable Care Act.

– The insurance rates for elderly would also remain the same in that they would continue to regulate cost at no more than 3 times the amount charged to younger Americans.

– The Minimum Essential Health Benefits would also remain the same keeping coverage for preventative services, maternity etc. covered at 100%.

The next few months may bring changes to health care requirements once again for Americans. It is essential to stay in compliance and continue to stay in contact with your insurance broker or agent at both the individual level and for employers. We will continue to update this topic here as well as more information is released and any laws or changes are made.