The Affordable Care Act for Family Law Practitioners

July 10, 2014

LAF & The Sargent Shriver National Center on Poverty Law

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AGENDA• 1:00 – 1:45 pm: ACA Overview• 1:45 – 2:00 pm: Questions• 2:00 – 2:45 pm: ACA/Family Law

Scenarios and Considerations• 2:45-3 pm: Questions

ACA Overview: The Implementation of the ACA

in Illinois

ObjectivesThis session will help you understand:• The basics of Medicaid and the Health

Insurance Marketplace in Illinois.• Who might be eligible for premium tax

credits and cost sharing reductions in the Marketplace.

• Minimum essential coverage (MEC).• Individual and employer shared

responsibility requirements.

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The Affordable Care Act (ACA) at a Glance

ACA was signed into law on March 23, 2010 and the major provisions started on January 1, 2014.

“Health Insurance Marketplaces” opened on October 1, 2013 across the nation: Get Covered Illinois is a single entry point for the Illinois Marketplace and Medicaid enrollment.

Individuals are responsible to obtain health coverage through an employer, directly from an insurance company or through the Marketplace, Medicaid or Medicare. Employers over 50 FTE are responsible for providing coverage - but employer penalty delayed until 2015/2016 depending on employer size.

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Four New Ways to Get Covered

#1 New Medicaid Adult Group available to adults age 19-64.#2 New Insurance Marketplace to buy insurance and receive financial help to pay for it.#3 Medicaid available to former foster children up to age 26 at any income level.#4 Young adults 19-25 years old can stay on their parents’ policy.

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1.8 Million Uninsured in IL – Most Have New Options for Coverage under ACA

New Consumer Protections for All Insurance

1. No pre-existing condition exclusions.2. Essential Health Benefits must be covered. 3. Holds insurance companies accountable for rate

increases.4. Coverage information in plain language.5. Preventive services available without cost sharing.6. No rescissions.

7. No lifetime or annual limits on care.8. Extended dependent coverage available up to age 26.9. Marriage equality.

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*There are still some grandfathered health plans that do not need to provide these ACA protections:

http://insurance.illinois.gov/cb/2014/CB2014-04.pdf Also, there are some noncompliant, non-grandfathered plans in the

individual and small group markets that do not have to cover ACA changes until 2016 or 2017:

http://insurance.illinois.gov/cb/2014/CB2014-04.pdf

Prevention Services

New private plans offered after Sept. 23, 2010 are required to provide these new preventive services (and others) without cost sharing

Type of Preventive Service

Alcohol Misuse HIV

Aspirin Diet/Obesity

Blood Pressure Sexually Transmitted Infection (STI)

Cholesterol Tobacco Use

Colorectal cancer Breast Cancer/Mammograms

Depression Immunizations

Type 2 Diabetes Developmental screening for children

Full list of no cost preventive screenings available:https://www.healthcare.gov/what-are-my-preventive-care-benefits/

What’s Covered? Essential Health Benefits

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1. Tax Filing Status 2. Household Composition/Size 3. MAGI (Modified Adjusted Gross

Income)

New Household and Income Considerations for Families under the ACA

Tax Filing Status: Common TermsThere are five (5) filing statuses. (The status is based on whether you are considered married or unmarried by the Internal Revenue Service (IRS)):• Single • Married filing jointly• Married filing separately• Head of Household• Qualifying Widow/Widower with a dependent child

A person’s filing status is based on their marriage status as of the last day of the calendar year for which taxes are being filed.• If more than one status applies, the person can choose the one that

gives them the lowest tax rate.

Why is Filing Status Important?

The tax filing status determines:

• The tax rate; and • Standard deduction; and • Eligibility for some tax credits.• Premium Tax Credits can be claimed by

persons who file as Single, Married Filing Jointly, Head of Household and Qualifying Widow(er) with a dependent child.

• Premium Tax Credits CANNOT be claimed if Married but Filing Separately.

Tax Filing Status: Head of Household

A person may file as Head of Household if:

Unmarried or “considered unmarried” on the last day of the year; AND

Files a separate return; AND

A spouse did not live in the home in the last 6 months of the year; AND

Paid more than half the cost of keeping up a home for the year; AND

Able to claim an exemption for a child (however, this test is also met if unable to claim the exemption only because the noncustodial parent can claim the child); AND

Must pay more than half the cost of keeping up the home for a “qualifying person”

Tax Status and Medicaid

The state considers three factors when defining a Medicaid household:• If the person expects to file a tax return; AND• If the person is a tax dependent on a return; AND • Relationship of the people who live in the home.

** If a married couple who live together is applying for children in common, it’s important to know if they are filing jointly or separately to determine whether the children use tax filer rules or non-filer rules to determine their family size.

Medicaid Household Grid

These rules apply to all living situations including people who are homeless.

Tax FilerTax Dependent

(regardless of age) of a parent or step-parent

Not a Tax Filer and Not a Tax Dependent

Include in the household …

Applicant Applicant Applicant and the following, if living in the home:• spouse• children (biological, adopted, and step)• parent of their child if applying for the child

All claimed dependents

The person filing the taxes If applicant is under 19, include the following people living in the home: • parents (biological, adopted, and step); and • siblings (biological, adopted, and step) Spouse if living in

the home, whether or not

filing jointly

The spouse of the tax filer if living in the home

Names you don’t have to include

Anyone not on the tax return

Anyone not on the tax return

• unmarried partner not requesting coverage• unmarried partner’s children• if over 19, parents in the home who do NOT

claim you as dependent• other adult relatives and unrelated persons

who file their own tax returns

Optional Names to include

• unmarried partner if there is a child in common; or• any other child under age 19 that the applicant takes care of

Determining MAGIInclude in MAGI Not included in MAGI

• Wages and tips, cash income• Unemployment compensation• Taxable amount of pensions, annuities, IRA

distributions and Social Security benefits from retirement, disability and survivors benefits (do not include Supplemental Security Income)

• Business income, farm income, capital gain, other gains (or loss)

• Dividends and taxable interest• Tax exempt interest• Alimony received• Rental real estate, royalties, partnerships,

trusts, etc. • Foreign income• Other income not specifically excluded

• TANF, SNAP, SSI or other public benefits (LIHEAP, WIC, etc.)

• Child support received• Gifts/Inheritances• Qualified scholarships (for tuition only)• Certain salary deferrals (e.g., flexible

spending plans, contributions to 401(k) plans)

• Contributions to a health savings account• Job-related moving expenses• Student loan interest• IRA contributions• Alimony paid• Self-employment expenses• Educator expenses

Adjustments

MAGI vs non-MAGI Groups in IL

MAGI rules apply to:

• ACA Adults• All Kids (children up to age 19)• Moms and Babies • FamilyCare –Parents / Caretaker relatives• ACA Adult Medical

When using MAGI rules, resources/assets are not counted when determining eligibility.

MAGI rules do NOT apply to:

• Seniors (people 65 and over) who are not parents or caretaker relatives• Cash/SNAP applicants• Most people with disabilities

ILLINOIS MEDICAID EXPANSION

Who is Eligible for the Medicaid Expansion?

• Age 19-64 and not eligible for other Medicaid category.

• Citizen or Qualified Non Citizen• Under 138% FPL or about $1340 per

month for a household of one ($16,105/year).

• No asset or disability test.

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Federal Poverty Level: Income Limits for CoverageMedicaid adjusts its’ income standards in April each year using the FPL amounts issued at the end of January. The Marketplace uses the FPL that is in place at the start of Open Enrollment and does not adjust the amount until the next Open Enrollment so for all of 2015 the Marketplace will use the 2014 FPL.

2014 Federal Poverty Level

Medicaid Programs Marketplace

AABDACA

Adult FamilyCare

All Kids Level 1

Moms and Babies

All Kids Level 2 CSR APTC

Household Size 100%* Adult Child

Pregnant or child under 1

Child 250% 400%

1 $11,670 $16,105 $24,396 ----- $37,116 $29,175 $46,680

2 $15,730 $21,707 $32,880 $33,504 $50,016 $39,325 $62,920

3 $19,790 $27,310 $41,364 $42,156 $62,928 $49,475 $79,160

4 $23,850 $32,913 $49,848 $50,796 $75,840 $59,625 $95,400

The income increases as the number of persons in the household increases.

Medicaid in Illinois At A Glance

Pre-ACA

• FamilyCare for parents and other caretaker relatives of children under 19

• All Kids• Moms and Babies• Aid to the Aged Blind and

Disabled (AABD)• Health Benefits for Workers

with Disabilities (HBWD)• Health Benefits for Persons

with Breast and Cervical Cancer (apply with Illinois Dept. of Public Health)

Post-ACA

• ACA Adult• Former Illinois Foster Child• FamilyCare for parents and

other caretakers of children under 18

• All Kids• Moms and Babies• Aid to the Aged Blind and

Disabled (AABD)• Health Benefits for Workers

with Disabilities (HBWD)• Health Benefits for Persons

with Breast and Cervical Cancer (apply with Illinois Dept. of Public Health)

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Medicaid Benefits for ACA AdultsACA Adults are receiving a Medicaid benefit/service package called the Alternative Benefit Plan (ABP).

• The ABP for adults is required to include:– Essential Health Benefits– Early and Periodic Screening, Diagnosis, and

Treatment services (EPSDT) for 19 and 20 year olds– Federally Qualified Health Center (FQHC) and Rural

Health Clinic (RHC) services– Non-emergency transportation– Family planning services and supplies

Cost Sharing under Medicaid• No Premiums• ACA Adults will have the same co-payments as other Medicaid

adults, such as:– Hospital inpatient services: $3.90– Prescription drugs: brand $3.90, generic $2.00– Primary care provider visit: $3.90

• No co-payment for Immunizations, Preventive Services, Diagnostic Services or Family Planning. Family planning related medical services require a co-pay for office visits.

• For more information: http://www2.illinois.gov/hfs/SiteCollectionDocuments/100app12.pdf

New Medicaid Managed Care in Illinois• 2011 Medicaid reform law (P.A. 96-1501) mandates 50% of clients to

be enrolled in “care coordination” by January 1, 2015• Different health plans for different Medicaid populations

– Seniors and Persons with Disabilities (SPD) – Medicaid only & Medicare/Medicaid (duals)

– Children, Parents/Caretaker Relatives, Pregnant Women – called “Family Health Plans (FHP)”

– Children with Special Needs (CSN)– Newly Eligible Adults under the Affordable Care Act – called

“ACA Adults”• 4 different models of Managed Care Entities

– Managed Care Organizations (MCO)– Managed Care Community Networks (MCCN)– Care Coordination Entities (CCE)– Accountable Care Entities (ACE)

Care Coordination in Mandatory Regions• Clients are in process of enrolling or being

enrolled in Health Plans in 5 mandatory regions– Chicago region – 6 counties– Rockford region – 3 counties– Central Illinois region – 3 counties– Quad Cities region – 3 counties– Metro East region- 3 counties

• Clients in rural counties will continue to be in fee for service (IL Health Connect) for awhile

• About 2 million Medicaid clients will be in Health Plans by mid-2015

http://www2.illinois.gov/hfs/PublicInvolvement/cc/Pages/default.aspx

ILLINOIS MARKETPLACE

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2014 & 2015 Open Enrollment 2014 Open Enrollment Oct. 1, 2013 – March 31, 2014

(April 15 for those “in line” )2015 Open Enrollment Nov. 15, 2014 – Feb. 15, 2015

Enrollment Date/Period Effective Coverage Begins 1st – 15th of month 1st of following month

16th – last day of month 1st of second following monthQualifying Life Events (such as moving to a new state, marriage, or having a baby) open a Special Enrollment Period (SEP)Complex Cases during 2014 Open Enrollment also can open a SEP.

Medicaid is always open!

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Special Enrollment Periods are called “SEP”

• Means that you can enroll in Marketplace any time during the year even outside of open enrollment.

• Must be “triggered” by specific life event that causes loss of MEC or other designated limited circumstances.

• Usually gives person 60 days after event to enroll.• Healthcare.gov has a screening tool to determine

is someone is eligible to enroll in a SEP.

https://www.healthcare.gov/how-can-i-get-coverage-outside-of-open-enrollment/

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HealthCare.gov

* 165 plans and 6 carriers• Aetna• Blue Cross Blue Shield• Coventry• Health Alliance• Humana• Land of Lincoln

* 13 Rating Areas

In 2015? DOI Announces 10 IssuersApply to Offer 504 QHPs

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2014 Qualified Health Plans in Illinois

QHPs Offer Essential Health Benefits

QHPs are Put into 5 Categories: 4 Metal and 1 Non Metal

Catastrophic Health PlansWhat is catastrophic coverage?• Plans with high deductibles and lower premiums• Pay all medical costs up to a certain amount• Includes 3 primary care visits per year and preventive

services with no out-of-pocket costs• Protects you from high out-of-pocket costs

Who is eligible?• Young adults under 30• Those who qualify for a hardship exemption• Those whose plan was cancelled and believe

Marketplace plans are unaffordable**Financial assistance (premium tax credits and cost sharing reductions) is not available

HealthCare.gov: Plan Compare

Cost: Two Types of New Financial Assistance

Premium Tax

Credits

•Helps people pay the monthly cost to have a plan

Cost-Sharing

Reductions

•Decrease the charges (e.g., copays, deductibles) enrollees must pay when receiving health care services covered by the plan

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Who Is Eligible for Tax Credits/Cost Sharing Subsidies?

A U.S. Citizen and

• Ineligible for “minimum essential coverage,” such as coverage provided through an employer, Medicaid or Medicare• Eligible to enroll in a QHP through the Marketplace• Part of a tax filing unit• Has household income between 100% and 400% FPL

A non-citizen who is lawfully present and

• Unable to obtain affordable minimum essential coverage, such as coverage provided through an employer, Medicaid or the Marketplace• Eligible to enroll in a QHP through the Marketplace• Part of a tax filing unit• Has household income between 0-400% FPL although tax credit will be based on an income of 100% FPL even if income is below 100% FPL.

Cost sharing subsidies are provided if eligible for a tax credit with an income between 100%-250% FPL and enrolled in a silver plan through the Marketplace

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Federal Poverty Level: Income Limits for CoverageMedicaid adjusts its’ income standards in April each year using the FPL amounts issued at the end of January. The Marketplace uses the FPL that is in place at the start of Open Enrollment and does not adjust the amount until the next Open Enrollment so for all of 2015 the Marketplace will use the 2014 FPL.

2014 Federal Poverty Level

Medicaid Programs Marketplace

AABDACA

Adult FamilyCare

All Kids Level 1

Moms and Babies

All Kids Level 2 CSR APTC

Household Size 100%* Adult Child

Pregnant or child under 1

Child 250% 400%

1 $11,670 $16,105 $24,396 ----- $37,116 $29,175 $46,680

2 $15,730 $21,707 $32,880 $33,504 $50,016 $39,325 $62,920

3 $19,790 $27,310 $41,364 $42,156 $62,928 $49,475 $79,160

4 $23,850 $32,913 $49,848 $50,796 $75,840 $59,625 $95,400

The income increases as the number of persons in the household increases.

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Expected Premium Contributions

Premium Tax Credit Calculator: http://kff.org/interactive/subsidy-calculator/

Impact of Marketplace Financial Help on People with Employer Insurance• Not intended for those with employer

coverage.• Provisions in place to discourage those

with employer offer buying into exchange with financial help.

• Employer offer of self-only coverage to employee is not more than 9.5 % of the household income.

• Dependent coverage “glitch”

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Culture of Coverage: Individuals

• The Individual Mandate requires most Americans to have “minimum essential health coverage (MEC)” for each month starting January 1, 2014.

• Also, called “Shared Responsibility Provision,” “Required Coverage,” or “Health Insurance Requirement.”

• This applies to adults and children. The adult or married couple who can claim a child or another individual as a dependent on their federal income taxes is responsible for making the payment if the dependent does not have coverage (or an exemption).

• Payments will begin in 2015

Culture of Coverage: Employers• Employer Mandate/ Employer Shared

Responsibility– Only for Firms with 50+ FTEs (3.6% of firms in

the US)– Small Businesses (below 50 FTEs) are exempt!– Must provide affordable and minimum value

coverage to employees and dependents– Pay a penalty IF an employee takes a premium

tax credit in the Marketplace.– Most larger firms already provide insurance – Penalty waived until 2016 for firms w/ 50-99

FTEs; for larger firms, it will be 2015 (must cover 70% of employees)

** More information: http://www.irs.gov/uac/Newsroom/Questions-and-Answers-on-Employer-Shared-Responsibility-Provisions-Under-the-Affordable-Care-Act

3 Choices Under the ACA

P

Maintain MEC

Qualify for an Exemption

Pay the Penalty

Requirement to Have Health Coverage• Everyone is required to have minimum essential coverage (MEC)

• Those without MEC will pay a shared responsibility payment unless exempt– Taxpayer is responsible for dependents

• Coverage requirement, penalties and most exemptions apply on a monthly basis

• One day rule: – A person has coverage for the month if they

have coverage for at least one day in the month

– A person is eligible for an exemption for the month if they are exempt for at least one day in the month

What Counts As MEC?• Employer-sponsored coverage, COBRA coverage and retiree

coverage• Coverage purchased in the individual market (inside or outside

the Marketplace)• Government Sponsored Coverage, such as:

– Medicare Part A coverage and Medicare Advantage plans– Most Medicaid coverage– Children's Health Insurance Program (CHIP) coverage– Certain types of veterans health coverage – Most types of TRICARE coverage – Refugee Medical Assistance

• Self-funded health coverage offered to students by universities for plan or policy years that begin on or before Dec. 31, 2014

• State high risk pool plans that begin on or before Dec. 31, 2014• Other coverage recognized by the Secretary of HHS as minimum

essential coverage

Full List here: http://www.irs.gov/uac/Questions-and-Answers-on-the-Individual-Shared-Responsibility-Provision

What Doesn’t Count As Minimum Essential Coverage?

• Coverage consisting solely of excepted benefits, such as:• Stand-alone vision care or dental care• Workers' compensation• Accident or disability policies

• Medicaid providing only family planning services• Medicaid providing only tuberculosis-related services• Medicaid providing only coverage limited to treatment of

emergency medical conditions• Pregnancy-related Medicaid coverage• Medicaid coverage for the medically needy• Section 1115 Medicaid demonstration projects• Specific TRICARE coverage

Not MEC, but Transition Relief Available

Individual Mandate or the “Penalty”The penalty in 2014 is calculated in one of 2 ways. If the consumer does

not maintain MEC, they will pay whichever of these amounts is higher:

• 1% of yearly household income. (Only the amount of income above the tax filing threshold, $10,150 for an individual, is used to calculate the penalty.) The maximum penalty is the national average premium for a bronze plan.

• $95 per person for the year ($47.50 per child under 18). The maximum penalty per family using this method is $285.

In 2015, the fee will go up to 2% of annual household income or $325 per adult ($162.50 per child).

It is prorated for number of months without insurance in a year. This calculator can be used to estimate the penalty for a consumer:http://taxpolicycenter.org/taxfacts/acacalculator.cfm

20 Million Have Gained Coverage Due to ACA

Helpful Resources• LAF – Specific Enrollment Resources

• HelpHub is an online community where ACA enrollment specialists in Illinois can share their experiences helping consumers enroll & ask questions to each other and policy experts. To request an invite, email helphub@illinoishealthmatters.org with your name, the name of your organization & details of your ACA involvement. 

• Get Covered Illinois – FAQs & Resourceshttp://getcoveredillinois.gov/how-to-get-covered/faq-resources/

• Illinois Health Resources – a directory of useful websites, fact sheets, and other resources on a variety of different topics for navigators and other assisters: http://www.illinoishealthresources.org/

Questions? Contact:

Stephani Beckerstephanibecker@povertylaw.org312.789.4482

Stephanie Altman: stephaniealtman@povertylaw.org312.789.4105