Commonly Asked Questions

We have prepared these frequently asked questions to help individuals and employers better understand what the Affordable Care Act means to them. Many of these are questions we’ve received from customers, and the answers are to help guide you through getting coverage. You should consult legal and tax experts to understand how the law will specifically affect your individual or business circumstances.

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Icongraphy of a family. Individual
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May my employer endorse or sponsor the plan?

No, because this plan is individual insurance, it is not designed to satisfy the rules for group insurance. Therefore, your employer is not allowed to endorse or sponsor the plan.
Among other things, this means the following:
1. Your employer is not permitted to pay for or reimburse you for any portion of the premiums that you are required to pay under the plan.
2. Your employer is not allowed to offer the plan to you through a Section 125 Plan.

What happens if I or one of my covered dependents later becomes eligible for or entitled to coverage under Medicare?

We encourage you to cancel your coverage under this plan when you become enrolled for Medicare.
You must notify Blue Cross immediately when you or someone on your contract becomes enrolled for any part of Medicare (Parts A, B or D). Please call Blue Cross at 1-888-543-9212, or visit us at www.bcbsalmedicare.com, to learn about options available to those who are Medicare eligible.

May I switch myself and my family from one Blue Cross plan to another?

Yes, you may switch plans during Open Enrollment or during a Special Enrollment Period.

What happens if I or one of my covered dependents later becomes covered under some other group or individual health plan?

If you obtain coverage under some other group or individual health policy or plan, you may still keep this plan. Blue Cross coordinates benefits under this plan with other group and non-group plans. For more information, please review the Coordination of Benefits section of the contract booklet.

May I add a spouse or child after I have obtained coverage under the plan?

If you qualify for a Special Enrollment Period, you may add a spouse or dependent to your plan. Otherwise, you may add a spouse or child during Open Enrollment. See, “How can I apply outside of Open Enrollment?” for more information.  

May I cover my family members when I apply for the plan?

When you first apply for the plan, you will be given the option to cover eligible family members.
Your spouse can be covered under the plan if he or she is a resident of the state of Alabama.
Your married or unmarried child may likewise be covered if, at the time of your application, he or she is under the age of 26 and is a resident of the state of Alabama. In addition, the child must be your natural child, stepchild, legally adopted child, child placed for adoption, or eligible foster child. An eligible foster child is a child that is placed with you by an authorized placement agency or by court order.
You may not cover your grandchild unless your grandchild is your adopted child, child placed for adoption or your eligible foster child.

What happens if I move out of Alabama?

Your contract will cancel; coverage is for Alabama residents only.

If payment is made with a check when I enroll, when will the check be deposited?

If payment is made with a check, the check will be cashed and applied when received. If the application is denied, Blue Cross will refund the applicant.

If I give a credit card when I enroll, when will it be charged?

When you enroll online, your credit card is not charged until your application is approved (most applications are approved immediately). Once the application is approved, the charge is applied to the first month's premium. If the application is denied, the card will not be charged. 

Do I need to send payment with the application?

If payment is not received with the application, a bill is automatically generated. This will not delay the application process; however, if payment is not received by the effective date of coverage, the contract will cancel. If your contract is effective, you can make a one-time payment online through myBlueCross.

What happens if Blue Cross declines to issue a contract?

If we decline to issue a contract, we will refund any fees paid with respect to the application. You will receive a denial letter in the mail.

How long does it take to enroll in a plan?

The enrollment process generally takes between 15 and 30 minutes.

How will my premium be determined?

Each person on the contract will be rated based on their age, their tobacco usage, and the county in which the contract holder lives. Once each member has been rated, then all amounts will be added together to get the family rate. For children age 20 and under, the oldest three children will be individually rated and included in the family premium amount, and any additional children will be free. All dependent children, age 21 and older, will be individually rated and included in the family premium amount. Watch this video to learn more about Member Leving Ratings

When will coverage end?

Plan coverage ends for you and your dependents when the first of the following happens:
1. You fail to pay all applicable fees for coverage within the first 30 days following the effective date of your coverage, in which case coverage for you and your dependents will be canceled as of the effective date of coverage;
2. You fail to pay subsequent fees for coverage within the 10-day grace period (if you are receiving a subsidy through the Marketplace, there is a 90-day grace period);
3. You are no longer a resident of Alabama;
4. For spouses, the first day of the month following divorce or other termination of marriage;
5. For children, the first day of the month following the date a child ceases to be a dependent;
6. For all covered dependents, the first day of the month following the date of a subscriber's death unless proper documentation is received within 30 days from the date of death to allow coverage to continue (we will not notify the subscriber's dependents upon the date of death of his/her options to continue coverage);
7. For any member, the date of his or her death;
8. Upon discovery of fraud or intentional misrepresentation or omission of a material fact; or
9. Upon termination of the plan.

 

How can I apply outside of Open Enrollment?

In order to apply for a plan outside of Open Enrollment, you must have a qualifying life event that results in a Special Enrollment Period. Most Special Enrollment Periods last 60 days from the date of the qualifying event. Qualifying life events that create a Special Enrollment Period include:

Birth
Adoption/foster child
Placement for adoption
Marriage
Permanent move into Alabama
Loss of health insurance coverage due to contract holder's death
Loss of health insurance coverage
No longer eligible for subsidy
Gain of citizenship or nationality
Of American Indians or Alaskan Natives ancestry

If you are currently a Blue Cross member and need to add a dependent to your plan, please call the Customer Service number located on the back of your identification card. 

When is Open Enrollment for the individual market?

Open Enrollment Period for the individual market begins Nov. 1 and ends Jan. 31, 2016. You may enroll anytime during Open Enrollment.

If you apply between:
• November 1, 2015, and December 15, 2015, coverage will begin January 1, 2016. 
• December 16, 2015, and January 15, 2016, coverage will begin February 1, 2016.
• January 16, 2016, and January 31, 2016, coverage will begin March 1, 2016. 

Is pediatric dental part of health plans?

Yes, pediatric dental is part of the essential health benefits required under section 1302(a) of the Patient Protection and Affordable Care Act for children up to age 19. Pediatric dental consists of services such as routine cleaning, exams, fillings and oral surgery.

Will taxes and fees imposed by the Affordable Care Act impact rates and/or benefits for Medicare Advantage and Prescription Drug Plans?

Yes.  The Affordable Care Act may contribute to an increase in premiums for Medicare Advantage and Prescription Drug Plans.  These plans may also experience an increase in deductibles and copays over time.  Medicare Supplement plans are not currently impacted.

Under the HRSA Guidelines, how long after childbirth is a woman eligible for lactation counseling? Are breastfeeding equipment and supplies unlimited?

Coverage of comprehensive lactation support and counseling and costs of renting or purchasing breastfeeding equipment extends for the duration of breastfeeding. Nonetheless, consistent with PHS Act section 2713 and its implementing regulations, plans and issuers may use reasonable medical management techniques to determine the frequency, method, treatment, or setting for a recommended preventive item or service, to the extent not specified in the recommendation or guideline. (Source: U.S. Departmentof Labor)

How are certified lactation consultants reimbursed for their services under the HRSA Guidelines?

Reimbursement policy is outside of the scope of the HRSA Guidelines and the Departments' regulations. (Source: U.S. Department of Labor)

The USPSTF already recommends breastfeeding counseling. Why is this part of the HRSA Guidelines?

Under the topic of "Breastfeeding Counseling" the USPSTF recommends interventions during pregnancy and after birth to promote and support breastfeeding. The HRSA Guidelines specifically incorporate comprehensive prenatal and postnatal lactation support, counseling, and equipment rental. Accordingly, the items and services described in the HRSA Guidelines are required to be covered in accordance with the requirements of the interim final regulations (that is, without cost-sharing, subject to reasonable medical management, which may include purchase instead of rental of equipment). (Source: U.S. Department of Labor)

Are intrauterine devices and implants contraceptive methods under the HRSA Guidelines and therefore required to be covered without cost-sharing?

Yes, if approved by the FDA and prescribed for a woman by her health care provider, subject to reasonable medical management. (Source: U.S. Department of Labor)

Do the HRSA Guidelines include services related to follow-up and management of side effects, counseling for continued adherence, and for device removal?

Yes. Services related to follow-up and management of side effects, counseling for continued adherence, and device removal are included under the HRSA Guidelines and required to be covered in accordance with the requirements of the interim final regulations (that is, without cost-sharing, subject to reasonable medical management).  (Source: U.S. Department of Labor)

Do the HRSA Guidelines include contraceptive methods that are generally available over-the-counter (OTC), such as contraceptive sponges and spermicides?

Contraceptive methods that are generally available OTC are only included if the method is both FDA-approved and prescribed for a woman by her health care provider. The HRSA Guidelines do not include contraception for men. (Source: U.S. Department of Labor)

Do the HRSA Guidelines include contraceptive methods that are generally available over-the-counter (OTC), such as contraceptive sponges and spermicides?

Contraceptive methods that are generally available OTC are only included if the method is both FDA-approved and prescribed for a woman by her health care provider. The HRSA Guidelines do not include contraception for men. (Source: U.S. Department of Labor)

The HRSA Guidelines include a recommendation for all Food and Drug Administration (FDA) approved contraceptive methods, sterilization procedures, and patient education and counseling for all women with reproductive capacity, as prescribed by a health care provider. May a plan or issuer cover only oral contraceptives?

No. The HRSA Guidelines ensure women's access to the full range of FDA-approved contraceptive methods including, but not limited to, barrier methods, hormonal methods, and implanted devices, as well as patient education and counseling, as prescribed by a health care provider. Consistent with PHS Act section 2713 and its implementing regulations, plans and issuers may use reasonable medical management techniques to control costs and promote efficient delivery of care. For example, plans may cover a generic drug without cost-sharing and impose cost-sharing for equivalent branded drugs. However, in these instances, a plan or issuer must accommodate any individual for whom the generic drug (or a brand name drug) would be medically inappropriate, as determined by the individual's health care provider, by having a mechanism for waiving the otherwise applicable cost-sharing for the branded or non-preferred brand version. This generic substitution approach is permissible for other pharmacy products, as long as the accommodation described above exists. If, however, a generic version is not available, or would not be medically appropriate for the patient as a prescribed brand name contraceptive method (as determined by the attending provider, in consultation with the patient), then a plan or issuer must provide coverage for the brand name drug in accordance with the requirements of the interim final regulations (that is, without cost-sharing, subject to reasonable medical management).  (Source: U.S. Department of Labor)

The HRSA Guidelines include a recommendation for annual HIV counseling and screening for all sexually active women. Is the term "screening" in this context defined as actual testing for HIV?

Yes. In this context, "screening" means testing. (Source: U.S. Departmentof Labor)

In the discussion of "Identified Gaps" within the Cervical Cancer section of the IOM report, the IOM recognized "co-testing with cytology and high-risk Human Papillomavirus (HPV) DNA testing among women 30 years of age and older as a strategy to increase screening intervals to every three years." When should the HPV DNA test be administered?

The HRSA Guidelines recommend high-risk HPV DNA testing for women with normal cytology results who are 30 years of age or older to occur no more frequently than every 3 years. (Source: U.S. Department of Labor)

What do health care providers need to know to conduct a screening and counseling for interpersonal and domestic violence, as recommended in the HRSA Guidelines?

Screening may consist of a few, brief, open-ended questions. Screening can be facilitated by the use of brochures, forms, or other assessment tools including chart prompts. Counseling provides basic information, including how a patient's health concerns may relate to violence and referrals to local domestic violence support agencies when patients disclose abuse. Easy-to-use tools such as patient brochures, safety plans, and provider educational tools, as well as training materials, are available through the HHS-funded Domestic Violence Resource Network, including the National Resource Center on Domestic Violence. (Source: U.S. Department of Labor)

What is included in a "well-woman" visit?

The HRSA Guidelines recommend at least one annual well-woman preventive care visit for adult women to obtain the recommended preventive services that are age- and developmentally-appropriate, including preconception and prenatal care. The HRSA Guidelines recommend that well-woman visits include preventive services listed in the HRSA Guidelines, as well as others referenced in section 2713 of the PHS Act. HHS understands that additional well-woman visits, provided without cost-sharing, may be needed to obtain all necessary recommended preventive services, depending on a woman's health status, health needs, and other risk factors. If the clinician determines that a patient requires additional well-woman visits for this purpose, then the additional visits must be provided in accordance with the requirements of the interim final regulations (that is, without cost-sharing and subject to reasonable medical management). (Source: U.S. Department of Labor)

Do the recommendations for women's preventive services in the HRSA Guidelines promote multiple visits for separate services?

No. Section 2713 of the PHS Act and its implementing regulations allow plans and issuers to use reasonable medical management techniques to determine the frequency, method, treatment, or setting for a recommended preventive item or service, to the extent this information is not specified in a recommendation or guideline. Although the HRSA Guidelines list services individually, nothing in PHS Act section 2713 or the regulations requires that each service be provided in a separate visit. Efficient care delivery and the delivery of multiple prevention and screening services at a single visit is a reasonable medical management technique, permissible under the regulations. For example, HIV screening and counseling and Sexually Transmitted Infections counseling could occur as part of a single well-woman visit. (Source: U.S. Department of Labor)

Which ACIP recommendations are required to be covered without cost-sharing by non-grandfathered group health plans and health insurance coverage?

PHS Act section 2713 and the interim final regulations require coverage for immunizations for routine use in children, adolescents, and adults that have in effect a recommendation by the ACIP for routine use. The vaccines must be covered without cost-sharing requirements when the service is delivered by an in-network provider. The ACIP makes routine immunization recommendations for children, adolescents, and adults that are population-based (e.g., age-based), risk-based (e.g., underlying medical conditions, work-related, or other special circumstances that increase risk of illness), or are catch-up recommendations.

In some circumstances, the ACIP makes a recommendation that applies for certain individuals rather than an entire population. In these circumstances, health care providers should determine whether the vaccine should be administered, and if the vaccine is prescribed by a health care provider consistent with the ACIP recommendations, a plan or issuer is required to provide coverage for the vaccine without cost-sharing.

New ACIP recommendations will be required to be covered without cost-sharing starting with the plan year (in the individual market, policy year) that begins on or after the date that is one year after the date the recommendation is issued. An ACIP recommendation is considered to be issued on the date on which it is adopted by the Director of the Centers for Disease Control and Prevention (CDC), which is the earlier of: the date the recommendation is published in the Mortality and Morbidity Weekly Report, or the date the recommendation is reflected in the Immunization Schedules of the CDC. (Source: U.S. Department of Labor)

Some USPSTF recommendations apply to certain populations identified as high-risk. Some individuals, for example, are at increased risk for certain diseases because they have a family or personal history of the disease. It is not clear, however, how a plan or issuer would identify individuals who belong to a high-risk population. How can a plan or issuer determine when a service should or should not be covered without cost-sharing?

Identification of "high-risk" individuals is determined by clinical expertise. Decisions regarding whether an individual is part of a high-risk population, and should therefore receive a specific preventive item or service identified for those at high-risk, should be made by the attending provider. Therefore, if the attending provider determines that a patient belongs to a high-risk population and a USPSTF recommendation applies to that high-risk population, that service is required to be covered in accordance with the requirements of the interim final regulations (that is, without cost-sharing, subject to reasonable medical management). (Source: U.S. Department of Labor)

Does the recommendation for genetic counseling and evaluation for routine breast cancer susceptibility gene (BRCA) testing include the BRCA test itself?

Yes. HHS believes that the scope of the recommendation includes both genetic counseling and BRCA testing, if appropriate, for a woman as determined by her health care provider.

PHS Act section 2713 addresses coverage for evidence-based items or services with a rating of "A" or "B" in the current recommendations of the USPSTF, as well as coverage for preventive care and screenings as provided for in comprehensive guidelines released by HRSA. The USPSTF recommends with a "B" rating that "women whose family history is associated with an increased risk for deleterious mutations in the BRCA1 or BRCA2 genes be referred for genetic counseling and evaluation for BRCA testing."

The HRSA Guidelines, released by HHS in August 2011, incorporate by reference relevant portions of an Institute of Medicine (IOM) Report, released on July 19, 2011. In some instances, the IOM Committee Report provides additional interpretation of USPSTF recommendations. For the USPSTF BRCA recommendation, the IOM Committee interpreted the recommendation to include "referral for genetic counseling and BRCA testing, if appropriate." Thus, genetic counseling and BRCA testing, if appropriate, must be made available as a preventive service without cost-sharing. (Source: U.S. Department of Labor)

If a colonoscopy is scheduled and performed as a screening procedure pursuant to the USPSTF recommendation, is it permissible for a plan or issuer to impose cost-sharing for the cost of a polyp removal during the colonoscopy?

No. Based on clinical practice and comments received from the American College of Gastroenterology, American Gastroenterological Association, American Society of Gastrointestinal Endoscopy, and the Society for Gastroenterology Nurses and Associates, polyp removal is an integral part of a colonoscopy. Accordingly, the plan or issuer may not impose cost-sharing with respect to a polyp removal during a colonoscopy performed as a screening procedure. On the other hand, a plan or issuer may impose cost-sharing for a treatment that is not a recommended preventive service, even if the treatment results from a recommended preventive service. (Source: U.S. Department of Labor)

The USPSTF recommends the use of aspirin for certain men and women when the potential benefit due to a reduction in myocardial infarctions outweighs the potential harm. Aspirin is generally available over-the-counter (OTC) to patients. Are group health plans and health insurance issuers now required to pay for OTC methods such as aspirin?

Aspirin and other OTC recommended items and services must be covered without cost-sharing only when prescribed by a health care provider. (Source: U.S. Department of Labor)

My plan does not have any in-network providers to provide a particular preventive service required under PHS Act section 2713. If I obtain this service out-of-network, can the plan impose cost-sharing?

No. While nothing in the interim final regulations generally requires a plan or issuer that has a network of providers to provide benefits for preventive services provided out-of-network, this provision is premised on enrollees being able to access the required preventive services from in-network providers. Thus, if a plan or issuer does not have in its network a provider who can provide the particular service, then the plan or issuer must cover the item or service when performed by an out-of-network provider and not impose cost-sharing with respect to the item or service. (Source: U.S. Department of Labor)

Who must comply with the annual limitation on out-of-pocket maximums under PHS Act section 2707(b)?

As stated in the preamble to the HHS final regulation on standards related to essential health benefits, the Departments read PHS Act section 2707(b) as requiring all non-grandfathered group health plans to comply with the annual limitation on out-of-pocket maximums described in section 1302(c)(1) of the Affordable Care Act.

The Departments recognize that plans may utilize multiple service providers to help administer benefits (such as one third-party administrator for major medical coverage, a separate pharmacy benefit manager, and a separate managed behavioral health organization). Separate plan service providers may impose different levels of out-of-pocket limitations and may utilize different methods for crediting participants' expenses against any out-of-pocket maximums. These processes will need to be coordinated under section 1302(c)(1), which may require new regular communications between service providers.

The Departments have determined that, only for the first plan year beginning on or after January 1, 2014, where a group health plan or group health insurance issuer utilizes more than one service provider to administer benefits that are subject to the annual limitation on out-of-pocket maximums under section 2707(a) or 2707(b), the Departments will consider the annual limitation on out-of-pocket maximums to be satisfied if both of the following conditions are satisfied:

a. The plan complies with the requirements with respect to its major medical coverage (excluding, for example, prescription drug coverage and pediatric dental coverage); and
b. To the extent the plan or any health insurance coverage includes an out-of-pocket maximum on coverage that does not consist solely of major medical coverage (for example, if a separate out-of-pocket maximum applies with respect to prescription drug coverage), such out-of-pocket maximum does not exceed the dollar amounts set forth in section 1302(c)(1).

The Departments note, however, that existing regulations implementing Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) prohibit a group health plan (or health insurance coverage offered in connection with a group health plan) from applying a cumulative financial requirement or treatment limitation, such as an out-of-pocket maximum, to mental health or substance use disorder benefits that accumulates separately from any such cumulative financial requirement or treatment limitation established for medical/surgical benefits. Accordingly, under MHPAEA, plans and issuers are prohibited from imposing an annual out-of-pocket maximum on all medical/surgical benefits and a separate annual out-of-pocket maximum on all mental health and substance use disorder benefits. (Source: U.S. Department of Labor)

Who must comply with the deductible limitations under PHS Act section 2707(b)?

The HHS final regulation on standards related to essential health benefits implements the deductible provisions described in section 1302(c)(2) for non-grandfathered health insurance coverage and qualified health plans offered in the small group market, including a provision implementing section 1302(c)(2)(C) so that such small group market health insurance coverage may exceed the annual deductible limit if it cannot reasonably reach a given level of coverage (metal tier) without exceeding the deductible limit.

With respect to self-insured and large group health plans, as explained in the preamble to the HHS final regulations, the Departments intend to engage in future rulemaking to implement PHS Act section 2707(b). The Departments continue to believe that only plans and issuers in the small group market are required to comply with the deductible limit described in section 1302(c)(2).

Until that rulemaking is promulgated and effective, the Departments have determined that a self-insured or large group health plan can rely on the Departments' stated intention to apply the deductible limits imposed by section 1302(c)(2) of the Affordable Care Act only on plans and issuers in the small group market. (Source: U.S. Department of Labor)

If an employer that does not offer coverage or offers coverage to fewer than 95% of its full-time employees (and their dependents) owes an Employer Shared Responsibility payment, how is the amount of the payment calculated?

If an applicable large employer does not offer coverage or offers coverage to fewer than 95% of its full-time employees (and their dependents), it owes an Employer Shared Responsibility payment equal to the number of full-time employees the employer employed for the year (minus up to 30) multiplied by $2,000, as long as at least one full-time employee receives the premium tax credit. (Note that for purposes of this calculation, a full-time employee does not include a full-time equivalent).

For an employer that offers coverage for some months but not others during the calendar year, the payment is computed separately for each month for which coverage was not offered. The amount of the payment for the month equals the number of full-time employees the employer employed for the month (minus up to 30) multiplied by 1/12 of $2,000. If the employer is related to other employers, then the 30-employee exclusion is allocated among all the related employers in proportion to each employer's number of full-time employees. (Source: IRS.gov)

If my income is so low that I am not required to file a federal income tax return, do I need to do anything special to claim an exemption from the individual shared responsibility provision?

No. Individuals who are not required to file a tax return for a year are automatically exempt from owing a shared responsibility payment for that year and do not need to take any further action to secure an exemption. (Source: IRS.gov)

What qualifies as a short coverage gap?

In general, a gap in coverage that lasts less than three months qualifies as a short coverage gap. If an individual has two short coverage gaps during a year, the short coverage gap exemption only applies to the first or earlier gap. (Source: IRS.gov)

If I think I qualify for an exemption, how do I claim it?

It depends upon which exemption it is.

  • The religious conscience exemption and the hardship exemption are available only by going to a Health Insurance Marketplace, also known as an Affordable Insurance Exchange, and applying for an exemption certificate.
  • The exemptions for members of Indian tribes, members of healthcare sharing ministries, and individuals who are incarcerated are available either by going to a Marketplace or Exchange and applying for an exemption certificate or by claiming the exemption as part of filing a federal income tax return.
  • The exemptions for unaffordable coverage, short coverage gaps, and individuals who are not lawfully present in the United States can be claimed only as part of filing a federal income tax return. The exemption for those under the federal income tax return filing threshold is available automatically. No special action is needed.

(Source: IRS.gov)

If I change health coverage during the year and end up with a gap when I am not covered, will I owe a payment?

Individuals are treated as having minimum essential coverage for a calendar month if they have coverage for at least one day during that month. Additionally, as long as the gap in coverage is less than three months, you may qualify for an exemption and not owe a payment. (Source: IRS.gov)

Do I have to be covered for an entire calendar month in order to get credit for having minimum essential coverage for that month?

No. You will be treated as having minimum essential coverage for a month as long as you have coverage for at least one day during that month. (Source: IRS.gov)

I work for a local government that provides me with health coverage. Is my coverage minimum essential coverage?

Yes. Employer-sponsored coverage is minimum essential coverage regardless of whether the employer is a governmental, nonprofit, or for-profit entity. (Source: IRS.gov)

I am a retiree, and I am too young to be eligible for Medicare. I receive my health coverage through a retiree plan made available by my former employer. Is the retiree plan minimum essential coverage?

Yes. Retiree health plans are generally minimum essential coverage. (Source: IRS.gov)

My employer tells me that our company’s health plan is “grandfathered.” Does my employer’s plan provide minimum essential coverage?

Yes. Grandfathered group health plans provide minimum essential coverage. (Source: IRS.gov)

Do my spouse and dependent children have to be covered under the same policy or plan that covers me?

No. You, your spouse and your dependent children do not have to be covered under the same policy or plan. However, you, your spouse and each dependent child for whom you may claim a personal exemption on your federal income tax return must have minimum essential coverage or qualify for an exemption, or you will owe a payment when you file. (Source: IRS.gov)

If I receive my coverage from my spouse’s employer, will I have minimum essential coverage?

Yes. Employer-sponsored coverage is generally minimum essential coverage. If an employee enrolls in employer-sponsored coverage for himself and his family, the employee and all of the covered family members have minimum essential coverage. (Source: IRS.gov)

Are residents of the territories subject to the individual shared responsibility provision?

All bona fide residents of the United States territories are treated by law as having minimum essential coverage. They are not required to take any action to comply with the individual shared responsibility provision. (Source: IRS.gov)

Are U.S. citizens living abroad subject to the individual shared responsibility provision?

Yes. However, U.S. citizens who live abroad for a calendar year (or at least 330 days within a 12 month period) are treated as having minimum essential coverage for the year (or period). These are individuals who qualify for an exclusion from income under section 911 of the Code. (Source: IRS.gov)

Are all individuals living in the United States subject to the individual shared responsibility provision?

All citizens are subject to the individual shared responsibility provision as are all permanent residents and all foreign nationals who are in the United States long enough during a calendar year to qualify as resident aliens for tax purposes. Foreign nationals who live in the United States for a short enough period that they do not become resident aliens for federal income tax purposes are not subject to the individual shared responsibility payment even though they may have to file a US income tax return. (Source: IRS.gov)

Are senior citizens subject to the individual shared responsibility provision?

Yes. Senior citizens must have minimum essential coverage or qualify for an exemption for each month in a calendar year. Senior citizens will have minimum essential coverage for every month they are enrolled in Medicare. (Source: IRS.gov)

Are children subject to the individual shared responsibility provision?

Yes. Each child must have minimum essential coverage or qualify for an exemption for each month in the calendar year. Otherwise, the adult or married couple who can claim the child as a dependent for federal income tax purposes will owe a payment. (Source: IRS.gov)

What are the statutory exemptions from the requirement to obtain minimum essential coverage?

1. Religious conscience: You are a member of a religious sect that is recognized as conscientiously opposed to accepting any insurance benefits. The Social Security Administration administers the process for recognizing these sects according to the criteria in the law.

2. Healthcare sharing ministry: You are a member of a recognized healthcare sharing ministry.

3. Indian tribes: You are a member of a federally recognized Indian tribe.

4. No filing requirement: Your household income is below the minimum threshold for filing a tax return. The requirement to file a federal tax return depends on your filing status, age, and types and amounts of income. To find out if you are required to file a federal tax return, use the IRS Interactive Tax Assistant (ITA) (http://www.irs.gov/uac/Do-I-Need-to-File-a-Tax-Return%3F).

5. Short coverage gap: You went without coverage for less than three consecutive months during the year.

6. Hardship: A Health Insurance Marketplace, also known as an Affordable Insurance Exchange, has certified that you have suffered a hardship that makes you unable to obtain coverage.

7. Unaffordable coverage options: You can’t afford coverage because the minimum amount you must pay for the premiums is more than eight percent of your household income.

8. Incarceration: You are in a jail, prison, or similar penal institution or correctional facility after the disposition of charges against you.

9. Not lawfully present: You are neither a U.S. citizen, a U.S. national, nor an alien lawfully present in the U.S.

(Source: IRS.gov)

What counts as minimum essential coverage?

Minimum essential coverage includes at a minimum all of the following:

  • Employer-sponsored coverage (including COBRA coverage and retiree coverage)
  • Coverage purchased in the individual market -Medicare coverage (including Medicare Advantage)
  • Medicaid coverage
  • Children's Health Insurance Program (CHIP) coverage
  • Certain types of Veterans health coverage
  • TRICARE

Minimum essential coverage does not include specialized coverage, such as coverage only for vision care or dental care, workers' compensation, disability policies, or coverage only for a specific disease or condition.

The Department of Health and Human Services (HHS) has authority to designate additional types of coverage as minimum essential coverage. Information on additional coverage that HHS has proposed to designate as minimum essential coverage, including student health plans and coverage provided by foreign governments, is available. (Source: IRS.gov)

Who is subject to the individual shared responsibility provision?

The provision applies to individuals of all ages, including children. The adult or married couple who can claim a child or another individual as a dependent for federal income tax purposes is responsible for making the payment if the dependent does not have coverage or an exemption. (Source: IRS.gov)

What is the individual shared responsibility provision?

Under the Affordable Care Act, the federal government, state governments, insurers, employers, and individuals are given shared responsibility to reform and improve the availability, quality, and affordability of health insurance coverage in the United States. The individual shared responsibility provision, which started in 2014, calls for each individual to have minimum essential health coverage (known as minimum essential coverage) for each month, qualify for an exemption, or make a payment when filing his or her federal income tax return. (Source: IRS.gov)

If an employer offers coverage to at least 95% of its full-time employees (and their dependents), but, nevertheless, owes the Employer Shared Responsibility payment, how is the amount of the payment calculated?

For an employer that offers coverage to at least 95% of its full-time employees (and their dependents), but has one or more full-time employees who receive a premium tax credit, the payment is computed separately for each month. The amount of the payment for the month equals the number of full-time employees who receive a premium tax credit for that month multiplied by 1/12 of $3,000. The amount of the payment for any calendar month is capped at the number of the employer’s full-time employees for the month (minus up to 30) multiplied by 1/12 of $2,000. (The cap ensures that the payment for an employer that offers coverage can never exceed the payment that employer would owe if it did not offer coverage). 

When do the Employer Shared Responsibility provisions go into effect?

The Employer Shared Responsibility provisions generally are not effective until January 1, 2015, meaning that no employer Shared Responsibility Payments will be assessed for 2014. Employers will use information about the number of employees they employ and their hours of service during 2014 to determine whether they employ enough employees to be an applicable large employer for 2015. (Source: IRS.gov)

What happens if I do not have minimum essential coverage, and I cannot afford to make the payment with my tax return?

The IRS routinely works with taxpayers who owe amounts they cannot afford to pay. The law prohibits the IRS from using liens or levies to collect any payment you owe related to the individual responsibility provision, if you, your spouse or a dependent included on your tax return does not have minimum essential coverage. (Source: IRS.gov)

Will there be changes for grandfathered plans in the future?

Yes, beginning in 2014, grandfathered plans may not limit yearly maximums for essential health benefits or include exclusions for pre‐existing conditions, and new hire waiting periods must be limited to 90 days.

Also, dependent children up to age 26 must be eligible for coverage under the plan even if the dependent child is eligible for coverage under his/her own employer-sponsored plan or his/her spouse’s employer-sponsored plan.

Will there be a limit on health flexible spending account contributions?

Yes, beginning in 2013, contributions will be capped at $2,500 per year.

Will groups be required to notify employees about the healthcare exchange?

Yes, groups will be required to notify their employees about the exchange.

Does Alabama offer a State Exchange?

No, Governor Bentley opted not to establish a State Exchange. Blue Cross and Blue Shield of Alabama will offer products on the Federal Exchange for eligible Alabama residents.

Which employers are not subject to the Employer Shared Responsibility provisions?

For a calendar year, employers who employ fewer than 50 full-time employees (including full-time equivalents) in the prior calendar year are not subject to the Employer Shared Responsibility provisions. (Source: IRS.gov)

Where can employees get more information about Affordable Insurance Exchanges?

The Department of Health and Human Services is developing the rules for Exchanges. (Source: IRS.gov)

When do the Employer Shared Responsibility provisions go into effect?

The Employer Shared Responsibility provisions generally are not effective until 2015, meaning that no Employer Shared Responsibility payments will be assessed for 2014. Employers will use information about the number of employees they employ and their hours of service during 2014 to determine whether they employ enough employees to be an applicable large employer for 2015. (Source: IRS.gov)

When can an employee receive a premium tax credit?

Premium tax credits generally are available to help pay for coverage for employees who are:

  • Between 100% and 400% of the federal poverty level and enroll in coverage through an Affordable Insurance Exchange,
  • Are not eligible for coverage through a government-sponsored program like Medicaid or CHIP, and
  • Are not eligible for coverage offered by an employer or are eligible only for employer coverage that is unaffordable or that does not provide minimum value.

(Source: IRS.gov)

What are the Employer Shared Responsibility provisions?

For 2015 and after, employers employing at least a certain number of employees (generally 50 full-time employees or a combination of full-time and part-time employees that is equivalent to 50 full-time employees) will be subject to the Employer Shared Responsibility provisions under section 4980H of the Internal Revenue Code (added to the Code by the Affordable Care Act). As defined by the statute, a full-time employee is an individual employed on average at least 30 hours or service per week.   

Under these provisions, if these employers do not offer affordable health coverage that provides a minium level of coverage to their full-time employees, the employer may be subject to an Employer Shared Responsibility payment if at least one of their full-time employees receives a premium tax credit for purchasing individual coverage on one of the new Affordable Insurance Exchanges, also called a Health Insurance Marketplace (marketplace). 

To be subject to these Employer Shared Responsibility provisions, an employer must have at least 50 full-time employees or a combination of full-time and part-time employees that is equivalent to at least 50 full-time employees (for example, 100 half-time employees equals 50 full-time employees).

(Source: IRS.gov)

Under what circumstances will an employer owe an Employer Shared Responsibility payment?

For 2015 and after, an applicable large employer will be liable for an Employer Shared Responsibility payment only if:

(a) The employer does not offer health coverage or offers coverage to less than 95% of its full-time employees and the dependents of those employees, and at least one of the full-time employees receives a premium tax credit to help pay for coverage on a marketplace;

OR

(b) The employer offers health coverage to at least 95% of its full-time employees, but at least one full-time employee receives a premium tax credit to help pay for coverage on a marketplace, which may occur because the employer did not offer coverage to that employee or because the coverage the employer offered that employee was either unaffordable to the employee or did not provide minimum value.

(Source: IRS.gov)

Is more detailed information available about the Employer Shared Responsibility provisions?

Yes. Treasury and the IRS issued final regulations on Employer Shared Responsibility provisions. Treasury and the IRS also have issued proposed regulations on the related information Reporting by Applicable Large Employers on Health Insurance Coverage offered under Employer-Sponsored Plans. (Source: IRS.gov)

If two or more companies have a common owner or are otherwise related, are they combined for purposes of determining whether they employ enough employees to be subject to the Employer Shared Responsibility provisions?

Yes, consistent with longstanding standards that apply for other tax and employee benefit purposes, companies that have a common owner or are otherwise related generally are combined together for purposes of determining whether or not they employ at least 50 full-time employees (or an equivalent combination of full-time and part-time employees). If the combined total meets the threshold, then each separate company is subject to the Employer Shared Responsibility provisions, even those companies that individually do not employ enough employees to meet the threshold. (Note that these rules for combining related employers do not apply for purposes of determining whether a particular company owes an Employer Shared Responsibility payment or the amount of any payment. That is determined separately for each related company.) (Source: IRS.gov)

If an employer offers coverage to at least 95% of its full-time employees (and their dependents), but, nevertheless, owes the Employer Shared Responsibility payment, how is the amount of the payment calculated?

For an employer that offers coverage to at least 95% of its full-time employees (and their dependents), but has one or more full-time employees who receive a premium tax credit, the payment is computed separately for each month. The amount of the payment for the month equals the number of full-time employees who receive a premium tax credit for that month multiplied by 1/12 of $3,000. The amount of the payment for any calendar month is capped at the number of the employer’s full-time employees for the month (minus up to 30) multiplied by 1/12 of $2,000. (The cap ensures that the payment for an employer that offers coverage can never exceed the payment that employer would owe if it did not offer coverage). (Source: IRS.gov)

If an employer does not employ enough employees to be subject to the Employer Shared Responsibility provisions, does that affect the employer’s employees’ eligibility for a premium tax credit?

No. The rules for how eligibility for employer-sponsored insurance affects eligibility for the premium tax credit are the same, regardless of whether the employer employs enough employees to be subject to the Employer Shared Responsibility provisions. (Source: IRS.gov)

I understand that the Employer Shared Responsibility provisions do not go into effect until 2015. However, the health plan that I offer to my employees runs on a non-calendar year that starts in 2014 and will run into 2015. Do I need to make sure my plan complies with the Employer Shared Responsibility provisions in 2014 when the next non-calendar year starts?

The final regulation provides three pieces of transition relief addressing non-calendar year plans — (1) pre-2015 eligibility transition relief, (2) significant percentage transition relief (all employees) and (3) significant percentage transition relief (full-time employees). The first piece of relief generally addresses employees that are already eligible to participate in the non-calendar year plan. Specifically the pre-2015 eligibility transition relief provides that for any employees (whenever hired) who are eligible for coverage on the first day of the 2015 plan year under the eligibility terms of the plan as of Feb. 9, 2014, (whether or not they take the coverage) and who are offered affordable coverage that provides minimum value effective no later than the first day of the 2015 plan year, the employer will not be subject to a potential Employer Shared Responsibility payment until the first day of the 2015 plan year. The remaining two pieces of relief generally address employees that have not been eligible to participate in the non-calendar year plan. They provide that if the employer meets certain requirements generally related to the portion of the employer’s employees already eligible for or participating in the non-calendar year plan, the relief may be extended to those employees that have not been eligible to participate. The preamble to the final regulations provides additional information on the rules for determining whether an employer is eligible for this relief. All of this transition relief applies for the period before the first day of the first non-calendar year plan year beginning in 2015 (the 2015 plan year) but only for employers that maintained non-calendar year plans as of Dec. 27, 2012, and only if the plan year was not modified after Dec. 27, 2012, to begin at a later calendar date. 

(Source: IRS.gov)

I understand that the Employer Shared Responsibility provisions apply only to employers employing at least a certain number of employees. How many employees must an employer have to be subject to the Employer Shared provisions?

To be subject to the Employer Shared Responsibility provisions for a calendar year, an employer must have employed during the previous calendar year at least 50 full-time employees or a combination of full-time and part-time employees that equals at least 50. For example, an employer that employs 40 full-time employees (that is, employees employed 30 or more hours per week on average) and 20 employees employed 15 hours per week on average has the equivalent of 50 full-time employees, and would be an applicable large employer. 

Seasonal workers are taken into account in determining the number of full-time employees. However, if an employer’s workforce exceeds 50 full-time employees (including full-time equivalents) for 120 days or fewer during a calendar year, and the employees in excess of 50 who were employed during that period of no more than 120 days were seasonal workers, the employer is not considered an applicable large employer. Seasonal workers are workers who perform labor or services on a seasonal basis as defined by the Secretary of Labor, and retail workers employed exclusively during holiday seasons.  For this purpose, employers may apply a reasonable, good faith interpretation of the term “seasonal worker.”

Employers will determine each year, based on their current number of employees, whether they will be considered an applicable large employer for the next year. For example, if an employer has at least 50 full-time employees (including full-time equivalents) for 2014, it will be considered an applicable large employer for 2015. Note that because employers will be performing this calculation for the first time to determine their status for 2015, there is a transition rule intended to make this first calculation easier. See question 31 for a discussion of this transition rule for 2015 determination of applicable large employer status. 

Employers average their number of employees across the months in the year to see whether they will be an applicable large employer for the next year. This averaging can take account of fluctuations that many employers may experience in their work force across the year. The final regulations provide additional information about how to determine the average number of employees for a year, including information about how to take account of salaried employees who may not clock their hours.

(Source: IRS.gov)

 

How will an employer make an Employer Shared Responsibility payment?

If it is determined that an employer is liable for an Employer Shared Responsibility payment after the employer has responded to the initial IRS contact, the IRS will send a notice and demand for payment. That notice will instruct the employer on how to make the payment. Employers will not be required to include the Employer Shared Responsibility payment on any tax return that they file. (Source: IRS.gov)

How will an employer know that it owes an Employer Shared Responsibility payment?

The IRS will contact employers to inform them of their potential liability and provide them an opportunity to respond before any liability is assessed or notice and demand for payment is made. The contact for a given calendar year will not occur until after employees’ individual tax returns are due for that year claiming premium tax credits and after the due date for employers that meet the 50 full-time employee (plus full-time equivalents) threshold to file the information returns identifying their full-time employees and describing the coverage that was offered (if any). (Source: IRS.gov)

How does an employer know whether the coverage it offers provides minimum value?

A minimum value calculator will be made available by the IRS and the Department of Health and Human Services (HHS). The minimum value calculator will work in a similar fashion to the actuarial value calculator that HHS is making available. Employers can input certain information about the plan, such as deductibles and co-pays, into the calculator and get a determination as to whether the plan provides minimum value by covering at least 60 percent of the total allowed cost of benefits that are expected to be incurred under the plan. (Source: IRS.gov)

How does an employer know whether the coverage it offers is affordable?

If an employee’s share of the premium for employer-provided coverage would cost the employee more than 9.5% of that employee’s annual household income, the coverage is not considered affordable for that employee. If an employer offers multiple healthcare coverage options, the affordability test applies to the lowest-cost option available to the employee that also meets the minimum value requirement.

Because employers generally will not know their employees’ household incomes, employers can take advantage of one of the affordability safe harbors set forth in the proposed regulations. Under the safe harbors, an employer can avoid a payment if the cost of the coverage to the employee would not exceed 9.5% of the wages the employer pays the employee that year, as reported in Box 1 of Form W-2, or if the coverage satisfies either of two other design-based affordability safe harbors. (Source: IRS.gov)

Do the Employer Shared Responsibility provisions apply only to large employers that are for-profit businesses or to other large employers as well?

All employers that employ at least 50 full-time employees or an equivalent combination of full-time and part-time employees are subject to the Employer Shared Responsibility provisions, including for-profit, non-profit, and government entity employers. (Source: IRS.gov)

Are there tax credits for small groups?

Yes, small businesses that employ fewer than 25 full‐time equivalent (FTE) employees, pay annual average wages of less than $50,000, and contribute an amount equal to at least 50% of the cost of employee‐only coverage may be eligible for the tax credit.

Are companies with employees working outside the United States subject to the Employer Shared Responsibility provisions?

For purposes of determining whether an employer meets the 50 full-time employee (or full-time employees and full-time employee equivalents) threshold, an employer generally will take into account only work performed in the United States. For example, if a foreign employer has a large workforce worldwide, but less than 50 full-time (or equivalent) employees in the United States, the foreign employer generally would not be subject to the Employer Shared Responsibility provisions. (Source: IRS.gov)

Are groups required to notify employees in advance of benefit changes?

Yes, if information reflected in the Summary of Benefits and Coverage (SBC) changes during the year other than in connection with a renewal, a Notice of Material Modification must be provided no later than 60 days prior to the effective date of the change. A revised SBC can serve as the Notice of Material Modification.