Editor’s note: None of the information in this article should be construed as legal, tax, or health insurance benefit advice. Be sure to consult a trained professional for help with your individual situation. Check back in Wednesday and Thursday for Buyer Beware: Important Considerations for Dancers When Purchasing Health Insurance, Affordable Care Act: Important Dates, and How To Find Help Understanding Coverage Options.
By Sarah Dash
Few professionals have as keen a need as dancers to stay as healthy and injury-free as possible, yet health care coverage is by no means guaranteed in the dance world. The Affordable Care Act seeks to improve access to health insurance across the country, while also improving the quality and comprehensiveness of coverage for those who currently have it. The law also includes many other provisions meant to strengthen programs like the public health system, community health centers, and training for health professionals—but this article will focus just on the law’s health insurance coverage provisions.
What Will the Affordable Care Act Mean for Dancers?
With so much else to focus on, why should dancers pay attention to the new law? Let’s get the hard part over with first: starting on January 1, 2014, most people will be required to have insurance, with some exceptions. Those who do not have health insurance in 2014 will have to pay a penalty of $95 or approximately 1 percent of income, whichever is greater, when they file their taxes next year. The penalties will rise each year. Aside from the penalty, however, there are plenty of good reasons to have health insurance. Health insurance is an important gateway for obtaining important preventive health care services, and it’s essential in case something really serious happens—dance-related or not. Fortunately, the Affordable Care Act will provide easier access to affordable coverage and significant new consumer protections.
The Affordable Care Act will affect individuals, small companies, and larger companies in different ways. The law is primarily geared toward improving access to coverage for individuals and small businesses, because, until now, health insurance has typically been much more difficult for them to obtain due to the lack of consumer protections in those marketplaces. For example, health insurance companies have been allowed to deny coverage to individuals with a pre-existing health condition or charge them more for their coverage. Small businesses of all kinds have also struggled to provide coverage to their employees, with coverage levels steadily dropping over the last decade due to skyrocketing health care costs and discrimination by health insurance companies. Larger businesses have typically been more likely to offer coverage, but the law requires those who do not to cover their workers or pay a fee starting in 2015.
What are the new consumer protections under the Affordable Care Act?
Under the health care law, health insurance companies will no longer be allowed to deny individuals coverage or charge them more if they have a pre-existing health problem. (Important note: to gain access to this protection, most people must enroll in coverage during open enrollment, from October 1, 2013 to March 31, 2014). The law also provides several other important consumer protections: for example, lifetime and annual limits on coverage are prohibited, preventive services must be covered without additional out-of-pocket costs, and there are new standards for reviewing health insurance company premium increases.
How Does the Affordable Care Act Increase Access to Coverage?
The Affordable Care Act created new health insurance marketplaces as the main portal for obtaining health insurance coverage for individuals and small businesses. In many states, an expanded Medicaid program will also be available for those with incomes up to about $16,000 per year. (So far, about half of states have decided to expand Medicaid, but more states may choose to do so in the future.) Finally, since 2010, young adults up to age 26 have been allowed to stay on their parents’ health insurance plan, and more than 3 million young adults have already done so.
Health Insurance Marketplaces: A New Way To Shop for Health Insurance in Every State
The primary mechanism for obtaining health insurance under the Affordable Care Act will be through new health insurance marketplaces (also called “exchanges”) in every state for individuals and small businesses. The marketplaces are designed to provide a one-stop-shop for individuals and families to shop for private health insurance coverage or find out if they qualify for public coverage like Medicaid, using one application that can be submitted online, by mail, or completed by phone. Small businesses will have their own marketplaces, discussed below. Self-employed individuals with no employees will be able to enroll through the marketplace for individuals.
In 2014, 17 states and the District of Columbia are running their own marketplaces, while 19 decided to defer to the federal government to run their marketplace, and 14 others are sharing responsibility with the federal government. Regardless of who is running the marketplace, there will be one for individuals and small businesses in every state. To find your state’s marketplace, go to www.healthcare.gov. While there may be some differences in the marketplaces from state to state, each one will have the same core features and protections. These include:
- Health insurance that meet basic standards. All health insurance sold through the marketplaces must cover certain essential health benefits, such as preventive care, hospitalization, mental health, and prescription drugs. Dental coverage may be offered through a separate plan, or it might be part of the same health plan. Health plans on the marketplaces will be organized into four levels of coverage levels of coverage (bronze, silver, gold, and platinum) that correspond to the average amount of expected costs each plan will cover. Bronze plans will cover the lowest percentage of expected costs and platinum plans will cover the highest. There will also be “catastrophic” plans available on the marketplaces for individuals under 30 years old, but these only cover limited health care services, and financial assistance is not available to help pay for these plans.
- New tools to help compare health insurance plans. The marketplaces will also offer new tools to help people compare their coverage options, including a summary of benefits and coverage that clearly shows what the plan covers.
- Lower-cost health insurance options. Many individuals buying coverage through the marketplaces could qualify for lower-cost health insurance premiums or help with out-of-pocket costs such as deductibles and co-payments. The assistance with health insurance premiums will come in the form of a federal tax credit that can be taken in advance and applied to monthly premiums, or taken at the end of the year. Individuals with income between 100 percent of the poverty line (or about $11,490) and 400 percent of poverty (about $45,960) are eligible. The marketplace will calculate the dollar amount of the premium tax credit each person will get, but to get a rough idea of your eligibility, check out this calculator. Individuals with incomes up to 250 percent of the poverty line (about $28,725) may also be eligible for help with out-of-pocket costs, as long as they enroll in a silver-level plan.
How Will the Affordable Care Act Affect Dance Companies?
The Affordable Care Act has different practical implications for businesses of different sizes. While the major provisions are summarized below, companies should visit the Small Business Administration website to find out the full list of provisions affecting self-employed individuals, companies with up to 25 employees, companies with up to 50 employees, and companies with 50 or more employees.
- SHOP Marketplace for small businesses: The Affordable Care Act created a Small Business Health Options Program (SHOP) marketplace in every state that allows small businesses with 50 or fewer employees to easily shop for and compare coverage options. The SHOP marketplace will be open to businesses with 100 or fewer employees starting in 2016. In most of the states that chose to run their own health insurance marketplace in 2014, small businesses will be able to set a contribution level and allow their employees to select from a choice of plans, a feature known as “employee choice.” Employee choice will be available in the states with federally run exchanges in 2015; until then, employers will select a single plan option for their employees, as is commonly done today. Small employers can buy coverage for their employees through the SHOP Marketplace at any time during the year, but companies can apply now for coverage to start as soon as January 1, 2014.
- Small business health care tax credit: The Affordable Care Act created a small business health care tax credit to help small employers afford the cost of health care coverage for their employees and is specifically targeted for those employers with low- and moderate-income workers. Since 2010, businesses that have fewer than 25 full-time equivalent employees (FTEs), pay average annual wages below $50,000, and that contribute 50 percent or more toward employees’ self-only health insurance premiums may qualify for a small business tax credit of up to 35 percent of premiums paid (for nonprofits, the credit is up to 25 percent of premiums paid) help offset the costs of insurance. In 2014, this tax credit goes up to 50 percent (or 35 percent for nonprofits), and is available to qualified small employers that participate in the Small Business Health Options Program (SHOP). Eligible small employers can claim the current credit through 2013, and the enhanced credit can be claimed for any two consecutive taxable years beginning in 2014 through the SHOP. The IRS website provides information on how to calculate full-time-equivalent employees and average annual wages.
- Requirement to offer coverage for larger businesses: Starting in 2015, businesses with 50 or more employees will be required to offer coverage to their full-time employees or pay a penalty. The Small Business Administration has helpful slides on calculating the number of employees for purposes of the employer shared responsibility requirement.
As dancers, choreographers, artistic directors, and company administrators, Dance/USA members are well aware of the wwork it takes to get a production just right before opening night.
It is not necessarily easy (or wise) to draw analogies between health insurance coverage and the performing arts world, but the advent last week of the open enrollment period for the new health insurance marketplaces created by the Affordable Care Act brings to mind these lyrics of “Another Opening, Another Show” from the musical Kiss Me, Kate:
The overture is about to start … you cross your fingers and hold your heart … it’s curtain time and away we go … another opening of another show!
For the federal and state officials, actuaries, computer programmers, and health policy analysts who have been working for the past several years to interpret the law, write regulations, and ultimately build the marketplaces, October 1st—the first day of open enrollment for the marketplaces—was certainly an exciting, if not glamorous, opening day. Notwithstanding some early challenges with the marketplace websites, which will continue to improve with time, the marketplaces—along with a host of new consumer protections brought about by the law—provide an unprecedented opportunity for dancers to obtain comprehensive health care coverage.
Sarah Dash is on faculty at the Georgetown University Health Policy Institute. Previously, she aspired to a professional ballet career, but thinks it is better that you are the ones onstage. It is a privilege to share information about the Affordable Care Act with the Dance/USA audience.
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