Alabama Policy Institute white paper

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Alabama Policy Institute402 Office Park Drive, Suite 300Birmingham, AL [email protected]

www.alabamapolicy.org
mailto:[email protected]://www.alabamapolicy.org/http://www.alabamapolicy.org/http://www.alabamapolicy.org/mailto:[email protected]


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Understanding

the PPACA


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TABLE OF CONTENTS


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INTRODUCTION

Understanding the PPACA 1

http://www.alabamapolicy.org/http://www.alabamapolicy.org/


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The Alabama Policy Institute

WHAT IS THE PPACA?

2 Understanding the PPACA


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How Does the PPACA Change Medicaid?

Penalties: What Is the Individual Mandate and How Does it Affect Individuals?



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Will I Lose My Existing Health Coverage?



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Will I Keep My Doctor?




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HOW DOES THE PPACA IMPACT SMALL BUSINESSES?

Businesses with Fewer Than 50 Full Time Employees: Exemption and Benefits Under the PPACA



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Businesses with 50 to 99 Full Time Employees: Provisions and Penalties Starting in 2016




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Non Discrimination Ban for Group Health Plans Impacts All Businesses



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ADDITIONAL IMPORTANT TAXES/FEES




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New Taxes Directly on High Income Individuals



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CONCLUSION




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1The Budget and Economic Outlook 2014-2024, Congress of the United States Congressional Budget Office, p. 112,www.cbo.gov,http://www.cbo.gov/sites/default/files/cbofiles/attachments/45010-Outlook2014.pdf (Last visited February 5, 2014).2

Nicole Wyatt, Alabamians surveyed do not feel well-informed on health reform, January 8, 2014, available at http://www.uab.edu/news/latest/item/4022-alabamians-surveyed-do-not-feel-well-informed-on-health-reform3Minimal Essential Coverage, U.S. Department of Health and Human Services www.healthcare.gov, https://www.healthcare.gov/glossary/minimum-essential-coverage. (Last visited January 31, 2014).4Trends in Health Care Cost Growth and the Role of the Affordable Care Act, whitehouse.gov, p.1,http://www.whitehouse.gov/sites/default/files/docs/healthcostreport_final_noembargo_v2.pdf (Last visited January 31, 2014).5Affordable Care Act: The New Health Care Law at Two Years, whitehouse.gov, http://www.whitehouse.gov/sites/default/files/uploads/careact.pdf, (Lastvisited January 31, 2014).6Supranote 5 at p.3.

7Id.at p.1.

8Id.at p.2.

9Id.at p.2.

10National Federation of Independent Business, et al. v. Sebelius, et al.,No. 11-393 at 39 (U.S. June 28, 2012),

http://www.supremecourt.gov/opinions/11pdf/11-333339393c3a2.pdf393c3a2.pdf11How does the health care law protect me?, U.S. Department of Health and Human Services, healthcare.gov, https://www.healthcare.gov/how-does-the-

health-care-law-protect-me/#part=2 (Last visited January 31, 2014).12Supra, note 11.

13Federal Register, Vol. 78, No. 47, Monday, March 11, 2013, p. 15411, http://www.gpo.gov/fdsys/pkg/FR-2013-03-11/pdf/2013-04902.pdf (Last visited

January 31, 2014).14What is the health insurance marketplace?, U.S. Department of Health and Human Services, healthcare.gov, https://www.healthcare.gov/what-is-the-health

insurance-marketplace (Last visited January 31, 2014).15Governor Bentley Announces Alabama Will Not Set up State Insurance Exchange, November 13, 2012,

http://governor.alabama.gov/newsroom/2012/11/governor-bentley-announces-alabama-will-not-set-up-state-insurance-exchange/ (Last visited January 31,2014).16Health Insurance Marketplace, Healthcare.gov (Last visited February 6, 2014).

17United States Census, www.census.gov. http://www.census.gov/hhes/www/hlthins/data/incpovhlth/2012/figure08.pdf (Last visited January 31, 2014).

18Minimal Essential Coverage, U.S. Department of Health and Human Services, www.healthcare.gov, https://www.healthcare.gov/glossary/minimum-

essential-coverage (Last visited January 31, 2014).19Essential Health Benefits, U.S. Department of Health and Human Services, www.healthcare,gov, https://www.healthcare.gov/glossary/essential-health-

benefits/ (Last visited January 31, 2014).20Supranote 19.

21Id.

22Open Enrollment Period, U.S. Department of Health and Human Services, www.healthcare.gov, https://www.healthcare.gov/glossary/open-enrollment-

period/ (Last visited January 31, 2014).23How can I get coverage Outside of Open Enrollment?, U.S. Department of Health and Human Services, www.healthcare.gov,

https://www.healthcare.gov/how-can-i-get-coverage-outside-of-open-enrollment/ (Last visited January 31, 2014).24How can I save money on Marketplace coverage?, U.S. Department of Health and Human Services, www.healthcare.gov., https://www.healthcare.gov/how-

can-i-save-money-on-marketplace-coverage/ (Last visited January 31, 2014).25Premium Tax Credit, U.S. Department of Health and Human Services, www.healthcare.gov, https://www.healthcare.gov/glossary/premium-tax-credit/ (Last

visited January 31, 2014).26Questions and Answers on the Premium Tax Credit, Internal Revenue Service, www.irs.gov, http://www.irs.gov/uac/Newsroom/Questions-and-Answers-on-

the-Premium-Tax-Credit (Last visited January 31, 2014).27Supraat note 1 p. 65.

28Id.

29What income and household information do I provide when I apply for Marketplace coverage?, U.S. Department of Health and Human Services,www.healthcare.gov, https://www.healthcare.gov/what-income-and-household-information-do-i-provide-when-i-apply-for-marketplace-coverage/ (Lastvisited January 31, 2014).30Supranote 29.

31Id.

32Supranote 26.

33Matthew Herper, Obamacare Raises Health Insurance Premiums, Especially for the Young, Forbes, December 5, 2013, available at

http://www.forbes.com/sites/matthewherper/2013/12/05/obamacare-raises-health-insurance-costs-especially-for-the-young/ (Last visited February 5, 2014).34Supranote 33.
http://www.cbo.gov/http://www.forbes.com/sites/matthewherper/2013/12/05/obamacare-raises-health-insurance-costs-especially-for-the-young/http://www.forbes.com/sites/matthewherper/2013/12/05/obamacare-raises-health-insurance-costs-especially-for-the-young/http://www.cbo.gov/


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35What if my state is not expanding Medicaid?, U.S. Department of Health and Human Services, www.healthcare.gov,https://www.healthcare.gov/what-if-my

state-is-not-expanding-medicaid/ (Last visited January 31, 2014).36

Supranote 35.37Supranote 10.38Id.

39Where the States Stand on Medicaid Expansion, The Advisory Board Company, January 24, 2014, http://www.advisory.com/daily-

briefing/resources/primers/medicaidmap (Last visited January 31, 2014).40Supranote 1 at p.64.

41Id.

42Governor Bentleys 2014 State of the State Address, January 14, 2014, governor.alabama.gov, http://governor.alabama.gov/newsroom/2014/01/governor-

bentleys-2014-state-state-address/ (Last visited January 31, 2014).43Supranote 42.

44Supranote 30.

45State General Fund Comparison Sheet: SGF FY 2014 Enacted, Legislative Fiscal Office, available at

http://www.lfo.state.al.us/pdfs/FY%202014%20Spreadsheets/SGF/SGF%20FY%202014%20Enacted.pdf,(Last visited February 6, 2014).46Medicaid In Alabama: A Primer, Alabama Policy Institute, February 28, 2013, available athttp://www.alabamapolicy.org/wp-content/uploads/2013-

Medicaid-Primer.pdf (Last visited February 6, 2014).47Supranote 46.48What if someone doesnt have health coverage in 2014?, U.S. Department of Health and Human Services, www.healthcare.gov,

https://www.healthcare.gov/what-if-someone-doesnt-have-health-coverage-in-2014/ (Last visited January 31, 2014).49Supranote 10.

50Questions and Answers on the Individual Shared Responsibility Provision, Internal Revenue Service, irs.gov, http://www.irs.gov/uac/Questions-and-Answers-

on-the-Individual-Shared-Responsibility-Provision. (Last visited January 31, 2014).51Supranote 48.

52Id.

53Id.

54Id.

55Qualifying Life Event, U.S. Department of Health and Human Services, www.healthcare.gov, https://www.healthcare.gov/glossary/qualifying-life-event/ (Last

visited January 31, 2014).56Supranote 23.

5745 C.F.R. 155.420(c)

58

Exemptions, U.S. Department of Health and Human Services, www.healthcare,gov, https://www.healthcare.gov/exemptions/ (Last visited January 31, 2014)59Supranote 23.

60Id.

61Mike Patton, Obamacare: Penalties and Exemptions, Forbes, October 28, 2013, available at

http://www.forbes.com/sites/mikepatton/2013/10/28/obamacare-penalties-and-exemptions/62What if I have a grandfathered health plan?, U.S. Department of Health and Human Services, www.healthcare.gov, https://www.healthcare.gov/what-if-i-

have-a-grandfathered-health-plan/ (Last visited January 31, 2014).63Supranote 62.

64Id.

65Keeping Your Health Plan, factcheck.org, November 11, 2013, http://www.factcheck.org/2013/11/keeping-your-health-plan/ (Last visited January 31, 2014).

66Ashley Parker and Robert Pear, Obama Moves to Avert Cancellation of Insurance, The New York Times, November 14, 2013, available at

http://www.nytimes.com/2013/11/15/us/politics/obama-to-offer-health-care-fix-to-keep-plans-democrat-says.html (Last visited January 31, 2014).67Brent Godwin, Thousands of Alabama Blue Cross policy holders could have plan cancelled, Birmingham Business Journal, October 30, 2013, available at

http://www.bizjournals.com/birmingham/morning_call/2013/10/thousands-of-alabama-blue-cross.html (Last visited February 5, 2014).68Insurance Standards Bulletin Series - Information, Centers for Medicare & Medicaid Services, November 21, 2013,

http://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/standard-notice-bulletin-11-21-2013.pdf (Last visited January 31, 2014).69Yann Ranaivo, BCBS of Alabama decides against renewing canceled plans, Birmingham Business Journal, November 20, 2013, available at

http://www.bizjournals.com/birmingham/news/2013/11/20/blue-cross-of-alabama-decides-against.html (Last visited February 5, 2013).70Supranote 69.

71Options Available for Consumers with Cancelled Policies, Centers for Medicare and Medicaid Services, http://www.cms.gov/CCIIO/Resources/Regulations-

and-Guidance/Downloads/cancellation-consumer-options-12-19-2013.pdf (Last visited January 31, 2014).72Can I buy a catastrophic plan?, U.S. Department of Health and Human Services, www.healthcare.gov., https://www.healthcare.gov/can-i-buy-a-catastrophic

plan/ (Last visited January 31, 2014).73Supranote 72.

74Id.
http://www.lfo.state.al.us/pdfs/FY%202014%20Spreadsheets/SGF/SGF%20FY%202014%20Enacted.pdfhttp://www.alabamapolicy.org/wp-content/uploads/2013-Medicaid-Primer.pdfhttp://www.alabamapolicy.org/wp-content/uploads/2013-Medicaid-Primer.pdfhttp://www.bizjournals.com/birmingham/morning_call/2013/10/thousands-of-alabama-blue-cross.htmlhttp://www.bizjournals.com/birmingham/news/2013/11/20/blue-cross-of-alabama-decides-against.htmlhttp://www.bizjournals.com/birmingham/news/2013/11/20/blue-cross-of-alabama-decides-against.htmlhttp://www.bizjournals.com/birmingham/morning_call/2013/10/thousands-of-alabama-blue-cross.htmlhttp://www.alabamapolicy.org/wp-content/uploads/2013-Medicaid-Primer.pdfhttp://www.alabamapolicy.org/wp-content/uploads/2013-Medicaid-Primer.pdfhttp://www.lfo.state.al.us/pdfs/FY%202014%20Spreadsheets/SGF/SGF%20FY%202014%20Enacted.pdf


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113Supranote 84 at p. 21.

114Id. at p. 22.

115

Id.at p. 21.116Id. at p. 22.117

Id.118

Id.at p. 23.119

Ann B. DeBellis, Navigating the Affordable Care Act, Birmingham Medical News, November 13, 2013, available athttp://birminghammedicalnews.com/news.php?viewStory=1911(Last visited February 6, 2013).120

http://irs.gov/pub/irs-drop/n-11-01.pdf121

Robert Pear, Rules for Equal Coverage by Employers Remain Elusive Under Health Law, The New York Times, January 18, 2014, available athttp://www.cnbc.com/id/101347430 (Last visited January 31, 2014).122

Supranote 88.123

Karen E. Klein, Obamacare Still Lets Employers Discriminate For Now, Bloomberg Businessweek, August 29, 2013, available athttp://www.businessweek.com/articles/2013-08-29/obamacare-still-lets-employers-discriminate-for-now (Last visited January 31, 2014).124

Supranote 123.125

The Impact of ACA Taxes and Fees, Center for Healthcare Research & Transformation, August 30, 2013, www.chrt.org,http://www.chrt.org/publications/price-of-care/the-impact-of-aca-taxes-and-fees/ (Last visited January 31, 2014).126Indoor Tanning Services Tax Center, Internal Revenue Service, www.irs.gov,http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Indoor-Tanning-Services-Tax-Center (Last visited January 31, 2014).127

Sarah Kliff, Delaying Obamacare Reinsurance Fee Would be a Win for Insurers, The Washington Post, October 15, 2013, available athttp://www.washingtonpost.com/blogs/wonkblog/wp/2013/10/15/delaying-obamacares-reinsurance-fee-would-be-a-win-for-insurers/ (Last visited January 312014).128

Supra note 127.129

Id.130

Keith Wagstaff, Obamacares Big Millennial Problem, The Week, November 15, 2013, available athttp://theweek.com/article/index/252897/obamacares-big-millennial-problem (Last visited January 31, 2014).131

Supranote 127.132

Reinsurance, Risk Corridors, and Risk Adjustment Final Rule, p.7, Centers for Medicare and Medicaid Services, March 2012,http://www.cms.gov/cciio/resources/files/downloads/3rs-final-rule.pdf (Last visited January 31, 2014).133

Supranote 123.134

Jake Sherman and Jennifer Haberkorn, Paul Ryan: Obamacare Could Come up in Debt Talks, Politico, January 23, 2014, available at

http://www.politico.com/story/2014/01/paul-ryan-obamacare-debt-102538.html (Last visited January 31, 2014).135A Large New Tax on Small Business, The Wall Street Journal, December 29, 2013, available at

http://online.wsj.com/news/articles/SB10001424052702304465604579220413773642016(Last visited January 31, 2014).136

Supranote 132.137

Id.138

Id.139

U.S. Congress Joint Committee on Taxation, Letter to the Honorable Jon Kyl, June 3, 2011, p.5, available athttp://www.ahipcoverage.com/wp-content/uploads/2011/11/Premium-Tax-JCT-Letter-to-Kyl-060311-2.pdf (Last visited January 31, 2014).140

Medical Expenditure Panel Survey, Agency for Healthcare Research and Quality, U.S. Department of Health and Human Services,http://meps.ahrq.gov/mepsweb/data_stats/summ_tables/insr/national/series_1/2010/tia2a.pdf (Last visited January 31, 2014).141

J.D. Harrison, Health Insurance Tax Scares the Daylights Out of Some Small Business Owners, The Washington Post, May 12, 2013, available athttp://www.washingtonpost.com/business/on-small-business/health-insurance-tax-scares-the-daylights-out-of-some-small-business-owners/2013/05/12/40bf58fe-b8ca-11e2-92f3-f291801936b8_story.html (Last visited January 31, 2014).142

Supranote 139.143

Cynthia Magnuson, Small Businesses to Bear Most of Health Insurance Tax Losses, National Federation of Independent Business, May 9, 2013, available athttp://www.nfib.com/article/?cmsid=62829 (Last visited January 31, 2014).144

The Library of Congress, Bill Summary & Status, 113thCongress (2013-2014), H.R. 3367, available athttp://thomas.loc.gov/cgi-

bin/bdquery/z?d113:h.r.03367: (Last visited January 31, 2014).145

Excise Tax on High-Cost Coverage (Cadillac Tax), UnitedHealthcare,http://www.uhc.com/united_for_reform_resource_center/health_reform_provisions/excise_tax_on_high_cost_coverage.htm (Last visited January 31, 2014).146

Supranote 145.147

Id.148

Reed Abelson, High End Health Plans Scale Back to Avoid Cadillac Tax, The New York Times, May 28, 2013, available athttp://www.nytimes.com/2013/05/28/business/cadillac-tax-health-insurance.html?pagewanted=all&_r=0 (Last visited January 31, 2014).149

Supranote 148.
http://birminghammedicalnews.com/news.php?viewStory=1911http://online.wsj.com/news/articles/SB10001424052702304465604579220413773642016http://online.wsj.com/news/articles/SB10001424052702304465604579220413773642016http://birminghammedicalnews.com/news.php?viewStory=1911


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150Supranote 125.

151Questions and Answers for the Additional Medicare Tax, Internal Revenue Service, www.irs.gov, http://www.irs.gov/Businesses/Small-Businesses-&-Self-

Employed/Questions-and-Answers-for-the-Additional-Medicare-Tax (Last visited January 31, 2014).152 Increase the Payroll Tax Rate for Medicare Hospital Insurance by 1 Percentage Point, Congressional Budget Office, November 13, 2013, www.cbo.gov,http://www.cbo.gov/budget-options/2013/44813 (Last visited January 31, 2014).153

Supranote 151.154

Id.155

Congressional Healthcare Caucus, New 3.8% Medicare Tax on Unearned Net Investment Income, p. 1,http://health.burgess.house.gov/uploadedfiles/one_page_on_unearned_medicare_tax.pdf (Last visited January 31, 2014).156

Supranote 155.157

Andrew Dugan, Majority of Americans Still Disprove of Healthcare Law, Gallup, February 4, 2014, available athttp://www.gallup.com/poll/167309/majority-americans-disapprove-healthcare-law.aspx (Last visited February 5, 2014).
http://www.gallup.com/poll/167309/majority-americans-disapprove-healthcare-law.aspxhttp://www.gallup.com/poll/167309/majority-americans-disapprove-healthcare-law.aspx

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