Affordable Healthcare Act and Divorce

Most people have heard at least something about the Patient Protection and Affordable Healthcare Act (“PPACA” or “ACA”), commonly referred to as Obamacare, but aren’t really too sure what exactly it is.

Basically, the Affordable Healthcare Act requires that individuals be covered by a health insurance plan for “essential health benefits” or will be penalized by way of a fine at the end of the year.  If you aren’t able to obtain health insurance through your employer (or your spouse’s or parent’s employer), then you can use the Health Insurance Marketplace (A.K.A. the health insurance exchange) to find a plan that meets all of the government requirements.

Let’s break it all down so that it’s a little easier to understand.  Please keep in mind that this is not intended to be a full explanation of the Patient Protection and Affordable Healthcare Act, but rather a very basic explanation geared toward women going through a divorce.

The Affordable Healthcare Act requires that individuals be covered by a health insurance plan for “essential health benefits” or will be penalized by way of a fine at the end of the year.

What kind of benefits must be covered under your insurance?

For a plan to meet the requirements of the ACA, it must cover the essential health benefits.  Currently, there are ten essential health benefits, which are:

1. Ambulatory patient services
2. Emergency services
3. Hospitalization
4. Maternity and newborn care
5. Mental health and substance use disorder services
6. Prescription drugs
7. Rehabilitative and habilitative services and devices
8. Laboratory services
9. Preventative and wellness services and chronic disease management
10. Pediatric services

If you already have health insurance and it covers at least these listed services, then you meet the requirements of the ACA as they stand currently.  Most insurance plans do cover these services, but if you’re not sure, simply call your health insurance provider and ask.  If you don’t have insurance currently, the plan that you purchase must cover these services.

Am I going to be penalized?

A person may be subject to penalties at the end of the year, if they do not participate in a health plan that provides at least the services listed above, unless they fall into certain exceptions.  The penalty for 2014 is 1% of your income or $95 (whichever is greater), plus a fine of $47.50 per child.  There is a cap of $285 per family.  The penalty is scheduled to increase to 2.5% of your income or $695 per individual.  There is no penalty for the 2013 tax year.  Certain people/groups of people are excused from the health insurance requirement, such as people who are incarcerated, American Indian tribe members, and members of religious groups opposed to health insurance.

Obamacare and Divorce

During the divorce proceedings, you may still be able to maintain coverage under your husband’s insurance.  Once the divorce is complete, however, you are no longer eligible for coverage under your now-ex-husband’s plan.  If you are not able to continue health insurance coverage through COBRA (Consolidated Omnibus Budget Reconciliation Act) or through your own employer, you may want to check out the new Health Insurance Marketplace.

The Health Insurance Marketplace is a website run by the government that helps you find health insurance coverage that meets the requirements of the Affordable Care Act.  The Marketplace will also assist you in determining how much, if any, of a discount in your premiums you are eligible to receive.

One of the benefits of the Affordable Healthcare Act is that it helps to make health insurance affordable for you.  The Marketplace offers various levels of insurance coverage, from Bronze to Platinum, which vary in premium price and out-of-pocket costs.  Additionally, you may be eligible for a lower monthly premium based on your annual income and your family size.  This is especially important for women ending a marriage where the husband was the primary breadwinner because it gives you some options for affordable healthcare for both you and your children.

What do I need to do?

The Affordable Healthcare Act will become effective January 1, 2014, but the time to learn about your options is now!  Head over to the Marketplace website at www.healthcare.gov to learn more about what kind of plans are out there for you and to begin the process of applying for coverage.

If you have concerns about losing your health insurance coverage because of a divorce, our office can help you.  Call us today to schedule a consultation to learn more about the process of divorce and how it affects your insurance.