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By January 1, 2014, states are required to establish Health Insurance Exchanges to offer private insurance choices to individuals and small employers (generally with 100 or fewer employees). The federal government will provide a default Exchange in states that chose no to establish their own.
Beginning January 1, 2014, all individuals must obtain minimum essential coverage or pay a tax. There are exceptions if the coverage is unaffordable (the lowest-cost option available costs more than 8% of the individual's household income), for low-income taxpayers, and for coverage gaps up to three months.
Federal premium assistance to purchase Exchange coverage is available for certain individuals with household income up to 400% of the Federal Poverty Level.
Employers with 25 or fewer full-time equivalent employees who earn $50,000 or less on average may earn a tax credit if the employer provides health coverage and pays at least 50% of the premium cost.
Beginning in 2015, a large employer that does not offer full-time employees health coverage or offers coverage that is either unaffordable or inadequate, will owe a penalty if at least one employee qualifies to receive a premium tax credit to purchase Exchange coverage
Beginning January 1, 2018, a 40% nondeductible excise tax will be imposed the extent the aggregate value of specified employer-sponsored health coverage exceeds certain threshold amounts.
For three years beginning in 2014, health insuruers for fully-insured plans and plan sponsors for self-funded group health plans will be required to pay reinsurance fees to state-established Exchange reinsurance entities.
Employers that provide prescription drug coverage to Medicare-eligible retirees that is at least as valuable as the Medicare Part D benefit are eligible for a subsidy of 28% of allowable prescription drug claims. Beginning with the 2013 tax year, an employer's allowable deduction for retiree prescription drug expenses must be reduced by the amount of the tax-free subsidy payment received.
ACA establishes Medical Loss Ratio (MLR) targets for health insurance coverage offered in the individual, small group, and large group markets. If a health insurer does not achieve the target MLR, it must provide rebates to enrollees in that market.