ACA qualified vs non-ACA compliant health insurance Plans? Prior to 2014, medical underwriting applied to individual and family health insurance, and most states did not guarantee issue. As a result, many Americans were either denied health insurance or had their pre-existing diseases excluded from coverage.
The Affordable Care Act (often known as “Obamacare” or “ACA”) established new requirements for individual and family health insurance in 2014. The objective was to nationwide align consumer-purchased insurance with employer-provided insurance.
There are two main categories of alternatives to consider when purchasing individual or family health insurance:
- ACA-qualified coverage
- Non-ACA compliant health insurance plans
newvehiclez.com explains the distinctions between insurance that complies with the Affordable Care Act and non-ACA compliant health insurance plans and gives examples of various alternatives in each category.
Individual and family health insurance plans that adhere to these ACA requirements are referred to as “ACA-qualified” coverage at LegUp Health. A health insurance plan must satisfy a number of conditions in order to be ACA-qualified, some of which include:
- Guaranteed-issue during enrollment windows – The plan must be made accessible on a guaranteed-issue basis during particular windows of enrolment. In other words, an insurance provider cannot refuse to cover you if you apply for health insurance within an enrollment period.
- No medical underwriting – Your personal health issues cannot be used by the insurance company as justification for raising the plan’s cost. (However, depending on your age, the size of your family, and a few other things, they may charge you extra.)
- Preexisting condition exclusions are prohibited by law, thus your preexisting conditions cannot be excluded from coverage by the plan.
- No yearly or lifetime caps – Your coverage cannot be subjected to maximum benefit caps by the plan.
- Maternity coverage – This is a requirement of the plan.
- Basic preventive care must be provided free of charge, and the plan must pay for these treatments.
The health insurance exchange or “Marketplace” in your state is where you can buy coverage that complies with the ACA. Every single individual and family health insurance plan offered on the Marketplace complies with the ACA. Some insurance providers also allow you to buy coverage straight from them that complies with the ACA.
Be aware that some insurance providers only offer their ACA-compliant plans through the Marketplace. Additionally, some insurance providers only allow direct purchases of their ACA-eligible policies. While some insurance providers offer both of these ways for customers to access their ACA-qualified policies while others don’t offer any ACA-qualified plans at all.
The majority of individuals opt to obtain ACA coverage through the Marketplace in order to benefit from premium tax credits that lower their expenses. Premium tax credits are only available for policies purchased through the insurance marketplace; they are not available for policies bought directly from insurance companies.
Most insurance providers let you designate a licensed health insurance agent as your agent of record (or “AOR”) whether you acquire ACA-coverage through the Marketplace or through direct purchasing. The insurance company then pays your agent of record without any additional fees to you. (Note: You can be passing on free services if you don’t have a good health insurance agent.)
Each state has a different list of insurance providers that can provide ACA-compliant coverage. Six health insurance providers in Utah provide ACA-compliant coverage:
- SelectHealth (Marketplace and direct purchase)
- University of Utah Health Plans (Marketplace and direct purchase)
- Regence Blue Cross Blue (Marketplace and direct purchase)
- Molina Healthcare (Marketplace only)
- Cigna (Marketplace and direct purchase)
- Bridgespan (Marketplace only)
Non-ACA compliant health insurance plans
Coverage that doesn’t adhere to ACA requirements is referred to as non-ACA eligible coverage. The Marketplace does not offer this coverage. It can only be obtained directly from issuers. I use the word “issuer” because occasionally coverage that is not ACA-qualified is offered by organizations that are not insurance companies.
Disclaimer: Proceed with caution and make sure you are aware of the coverage you are purchasing if you are thinking about purchasing non-ACA eligible coverage. For coverage that is not ACA-qualified, there are no premium tax credits available.
The majority of non-ACA compliant health insurance plans options fall into one of these three groups:
- Short term health insurance plans (Non-ACA compliant health insurance plans)
- Health care cost-sharing memberships (Non-ACA compliant health insurance plans)
- Indemnity medical plans (Non-ACA compliant health insurance plans)
Short term health insurance
policies with limited coverage periods (or “terms”), which typically run from 30 to 364 days, are referred to as short-term health insurance policies. You can even renew a short-term plan with some issuers for up to three years. State-specific words are different. Preexisting medical issues are not covered by short-term insurance plans, which are medically underwritten.
A brief (“short term”) bridge between enrollment periods was the initial purpose of short term health insurance for consumers. You might purchase a short-term plan to cover you until the next year’s Open Enrollment Period, for instance, if you missed last year’s annual Open Enrollment Period and you aren’t qualified for a Special Enrollment Period. then you could purchase extra long-term ACA-compliant insurance.
In Utah, there are a few choices for temporary health insurance plans, including:
- SelectHealth “transition” plans
- UnitedHealthcare short term plans
- National General short term plans
- Independence American Insurance Company short term plans