Perhaps the most significant provisions of the Affordable Care Act are the creation of state-based exchanges and the employer and individual responsibility requirements. All of these provisions start in 2014. The most contested provision thus far is the individual mandate. This provision has been part of the basis of several lawsuits challenging the Affordable Care Act, and the subject of various bills introduced in state legislatures to prohibit mandatory coverage. In terms of obtaining health insurance and affordability of insurance, all these upcoming provisions reflect many of the original ideas behind health reform legislation. More on these changes to come are discussed below.

Individual and Employer Requirements in 2014

Beginning in 2014, most individuals (U.S. citizens and legal residents) will be required to obtain health insurance coverage or pay a tax penalty. In 2014, that penalty will be $95. The penalty increases to $325 in 2015 and $695 in 2016 (or up to 2.5 percent of income). If a person is unable to purchase coverage, exemptions will be available on the bases financial hardship, religious objections, and for Native Americans.

Employers with 50 or more full-time employees who do not offer insurance coverage to their workers will be required to pay a penalty of $2,000 annually for each full-time employee (over the first 30 employees). Employers with more than 200 full-time employees, and that offer employees enrollment in one or more health benefits plans, will be required to automatically enroll new full-time employees in one of the plans offered. The employer would need to give adequate notice and the opportunity for the employee to opt out of automatic coverage.

The small business tax credit now in effect for qualifying business and nonprofit organizations will be increased in 2014. For small business, the credit will be up to 50 percent of the employer's contribution to health insurance for employees. For nonprofits, the credit is up to 35 percent.

Insurance Exchanges

In 2014, each state will be required to establish an American Health Benefit Exchange that facilitates the purchase of qualified health plans. The states must also establish a Small Business Health Options Program to assist qualified small business employers in the state in facilitating the enrollment of their employees in qualified health plans offered to the small group market. The exchanges will be administered through a government agency or a nonprofit organization. The states are allowed to merge the individual and small group markets.

Small businesses with up to 100 employees can purchase insurance through the exchanges. At least two multi-state plans will be offered in each exchange, and at least one offered by a nonprofit. The plans offered in the exchange must have a minimum set of standards in coverage, and past that minimum standard threshold the plans will feature four levels of coverage: bronze, silver, gold and platinum, varying in premium costs and benefits.

The Department of Health and Human Services (HHS) must develop criteria for the certification of health plans to be accepted in the exchanges. The criteria must include: marketing requirements (such as prohibiting marketing practices or benefit plans that discourage enrollment by individuals with significant health needs); a sufficient choice of providers; information to enrollees and prospective enrollees on the availability of in-network and out-of-network providers; and networks for essential community providers that serve predominately low-income, medically-underserved individuals.

Insurance reforms will be imposed upon the plans in the exchanges. Rating variations on insurance premiums in the exchanges will be limited to a 3 to 1 ratio for age and 1.5 to 1 for tobacco use. Insurers will be required to accept every employer and individual in the state that applies for coverage, and must renew or continue coverage at the option of the plan sponsor or the individual. Insurers cannot base eligibility for enrollment on health status, mental or physical illness, claims experience, receipt of health care, medical history, genetic information, evidence of insurability (including conditions arising out of acts of domestic violence) or disability. The plans may not apply any waiting period for coverage that exceeds 90 days.

For the small group (employer-sponsored) plans, the deductible under the plan will have a limit of $2,000 for a single individual and $4,000 for families.

Premium assistance will be provided for low-income eligible individuals and families to buy insurance in the exchange in the form of a tax credit, with the amount of the assistance dependent upon income between 100 and 400% of the federal poverty level.

Rural Health Boost

In other health reform news, HHS has announced $32 million in FY 2010 funding for programs in rural health care. The funds are being directed to seven programs:

--The Medicare Rural Hospital Flexibility Program, for improvements of health care quality in communities served by critical access hospitals;

--The Rural Health Workforce Development Program, a one-time pilot program to support the development of rural health networks to recruit and retain emerging health professionals in rural communities;

--The Telehealth Network Grant Program, for helping communities developing sustainable telehealth programs and networks;

--The Telehealth Resources Center Grant Program, to provide technical assistance for cost-effective telehealth programs serving rural and medically-underserved populations;

--The Flex Rural Veterans Health Access Program, to help eligible entities coordinate innovative approaches in providing rural veterans and other rural residents access to mental health and other health care services;

--The Frontier Community Health Integration Demonstration Program, to develop and test new models for the delivery of health care services in frontier areas; and

--The Rural Training Track Technical Assistance Demonstration Program, to analyze challenges in the Rural Training Track residency program sites and provide technical assistance to increase the number of primary care physicians taking part in the rural residencies.

More on the rural programs may be found here.