Obenauf Law Group Hawaii Law

On March 23, 2010, the President signed into law the Patient Protection and Affordable Care Act. This law requires U.S. citizens to have health insurance.

The Lowest Income Group
Many low-income people already receive health care coverage via the Medicaid program. The Affordable Care Act expanded Medicaid coverage by increasing eligibility from 100% of the federal poverty level to 133% of the federal poverty level ($19,530 for a family of 3 in 2013). This means more people can qualify for Medicaid.

The Next Group Up
Additionally, under the Affordable Care Act, people whose income is over the new Medicaid limit but under 400% of the federal poverty level can get help buying health insurance. (See income chart on page 31).

The Exchanges
The law requires states to set up American Health Benefit exchanges so people can purchase health insurance. It also creates separate exchanges from which small businesses can purchase health insurance. Go to www.Hawaiihealthconnector.com.

The Individual Mandate

The law also creates an individual mandate, which requires people to obtain health coverage. If you do not get health coverage, you have to pay a penalty. In 2014, that penalty is $95 or 1% of your taxable income. It increases until it reaches $695 in 2016, or 2.5% taxable income, with some exceptions.

The Gap Group
As I said above, the law increased the pool of people eligible for Medicaid by raising the income limit to 133% of the federal poverty level. The Supreme Court upheld this portion of the law. However, the Court ruled that the federal government cannot enforce it, so the Medicaid expansion portion has been left up to the states. To encourage states to expand Medicaid, the federal government offered to pay for it. The expansion will be 100% federally funded until 2016, then phase down until reaching 90% federal funding in 2020.

Despite the federal funding, as of this month, 25 states have chosen not to expand Medicaid coverage for their residents. For people living in those states (not Hawaii), there will be a gap group that earns too much to qualify for Medicaid using the old eligibility number but also cannot purchase insurance on a health care exchange. The Kaiser Family Foundation estimates this choice by 25 states will affect five million poor uninsured adults.

How it Affects Women
The law prevents insurers from discriminating based on pre-existing conditions. For women, this will help pregnant women or women diagnosed with depression or with domestic violence issues to obtain insurance. Preventive services also will be insured, such as vaccines, well-baby care, and pre-natal visits. The law also requires that all forms of prescription birth control be completely covered.

How it Affects Businesses
The Affordable Care Act also requires businesses to provide health insurance to their employees. This is not really news to us doing business here in Hawaii, but here’s how it works. Businesses with over fifty employees that do not offer health insurance coverage to employees can face a penalty of $2000 per employee. Businesses with over 200 employees must automatically enroll employees into their health insurance plans. Small businesses with fewer than 25 employees can receive money from the federal government to pay for their employees’ health insurance if they meet certain criteria.

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Meg Obenauf is an attorney and the founder of Obenauf Law Group. She strives to help families pass on their wealth simply, without conflict, drama, or taxes and works with families to protect their money and property from the ravages of nursing home and long-term care expenses. Meg helps parents of minor children create plans so that your keiki are never out of the hands of your loved ones, even for a moment, if the unthinkable should occur. She works with clients to create customized plans designed to ensure that your wishes are recognized and followed. Meg is a graduate of Harvard Law School. She resides in upcountry Maui with her husband, Mark, and her two young children. You can contact her at 244-3905 or go to www.obenauflawgroup.com for more information.