Affordable Care Act Key Terms You Should Know
posted Jun 24, 2013 by Loree Dubois, CPA in the Global Tax Blog
There are many different buzz words and terms used when explaining the Affordable Care Act and what it means for you. In an effort to help you understand the details “in plain language” we have compiled a list of key terms and their definitions to help you navigate the world of healthcare.
- ACA (also referred to as “Health Care Reform” or “Obamacare”)– The Affordable Care Act (ACA) commonly referred to as Obamacare is the nation’s health reform law enacted in March 2010 and becoming effective January 1, 2014.
- Coinsurance and CoPay- Coinsurance is coverage that you receive through a policy that is separate from the main policy. You can buy coinsurance to cover things like deductibles or services not normally covered by the primary policy. CoPays are the amount of charges you pay when you receive a covered service. Your health insurance pays the rest.
- Cost Sharing Reductions- are government subsidies to help limit out-of-pocket costs and other cost-sharing amounts (i.e. deductibles and co-payments) for people who purchase health plans on exchanges. Income limitations apply to qualify.
- Full Time Equivalent (FTE) Employee- A full-time equivalent is an employee working an average of a least 30 hours a week during any given month, or the equivalent of 130 hours per calendar month.
- Grandfathered Plan- A group health plan that was created - an individual health insurance policy that was purchased – on or before March 23, 2010. Grandfathered plans are exempted from many changes required under the Affordable Care Act.
- Essential Health Benefits - A 149-page outline that defines coverage in 10 categories of care, including basic services such as hospitalization and emergency care, as well as mental health and maternity care.
- Large Employers- employers with at least 50 Full-time equivalent (FTE) employees.
- Minimum Essential Coverage- The benefits that medical coverage must include to meet the individual mandate. This mainly includes coverage under government-sponsored plans, employer-sponsored plans, and grandfathered health plans.
- Minimum Value Standard- A health plan provides minimum value by covering at least 60% of the total value of covered medical services that are expected to be incurred under the plan.
- Network- All the facilities, providers, and suppliers that your health insurer is contracted with to provide health care services.
- Premium tax credits- government subsidies aimed at reducing premium costs for lower-to middle-income individuals who buy health plans on exchanges. Income limitations apply to qualify.
- Provider- A physician, health care professional or health care facility that is licensed, certified, or accredited to provide care and services as required by state law.
- Small Employers- employers with less than 50 Full-time equivalent (FTE) employees.
Read more on the latest Healthcare news:
The Business Side of the Affordable Care Act
Determining if you are a large or small employer under the Affordable Care Act
Small Employers and the Affordable Care Act
Large Employers and the Affordable Care Act