Rori Callaway's family got a jolt recently when they looked at the paycheck her husband, Zach, got from his Dallas public school teaching job: a 30% increase in their health insurance premium. The Dallas family of three stuck with the cheapest plan available during open enrollment, but is now paying $760 a month.
The Affordable Care Act, which led to the creation of state and federally run health insurance exchanges that launched last week, is generally thought of as being for the uninsured. But that's not entirely true. It could help the Callaways, too.
The law offers many new protections for anyone who has employer-provided health insurance. It could even help some people with hard-to-afford plans and/or plans that don't cover enough of their health costs.
Even though the new law was designed to simplify insurance purchases, the way the Callaways could get relief is ... complicated.
A glitch in the wording of the law makes it difficult but not impossible for employees who have expensive family plans to get help. The law refers only to the portion an individual's premium is of the household income - not what the family's premium is. The language was designed to make sure people don't leave workplace plans for subsidized coverage through the exchanges. But it had an unfortunate effect. Some families could have to go without affordable coverage.
The individual's premium isn't supposed to total more than 9.5% of household income. The Callaways' is now almost double that.
Karen Pollitz, senior analyst with the Kaiser Family Foundation, says families including the Callaways could still shop on the new exchanges; they just wouldn't be eligible for subsidies or tax credits because subsidies are only available to those who can't get affordable coverage. If the plans become unaffordable for the first time outside of a typical fall-to-fall plan year, they may qualify for a special enrollment opportunity.
For help calculating whether your policy would be considered affordable under the law, consult your state exchange or call one of the navigators for help. Get linked to your state's exchange and search for navigators there at the federal government's HealthCare.gov.
Along with easier-to-understand language, here are other ways the plans you buy during open enrollment will be different:
• Essential benefits. Everyone's plan - whether obtained on the exchanges or through an employer - has to cover certain things, including maternity care, prescription drugs, in-patient hospital care and lab services. That doesn't mean they are free or will necessarily be considered affordable by the employee, but there will be coverage. These contributions are capped at $6,350 per individual or $12,700 per family per year.
Each state is required to pick a benchmark plan that other plans must be comparable to. That means if the benchmark plan, say, includes fertility treatments under maternity care as it does in Illinois, so, too, must the other plans in that state, says Allen Wishner, CEO of Flexible Benefit Service Corp. and a director of the Employers Council on Flexible Compensation.
• Preventive health care. Doctor or lab visits for procedures including mammograms, colonoscopies and blood pressure screening have to be covered in full now. No co-pays and no cost-sharing allowed.
• Pre-existing conditions. People with pre-existing conditions trying to buy insurance individually have until now sometimes been denied coverage. Those with insurance provided by their employers are sometimes subject to waiting periods that can be as long as 12 months, Wishner says. Employees can no longer be subject to any pre-existing condition waiting period.
Pre-existing condition exemptions could be so ridiculous that Wishner recalls a child who was uninsurable because he was on the acne medication Accutane.
• Out of your pocket. Sometimes premiums go up at open enrollment time, but often it's also your co-payments and maximum out-of-pocket expenses. So even if you didn't exactly get good news in your open enrollment package about the money you must spend before insurance kicks in, there's a related perk in the law. Your co-payments now count toward your maximum out-of-pocket expenses, so you'll get there faster in 2014.
Rori Callaway, a freelance writer who also makes notebooks and journals she sells online, says she may look for seasonal retail work this holiday season. The family is also going to start selling some of their household items on Craigslist to make ends meet - and pay up to the $4,800 deductible on their plan.
"The timing is certainly unfortunate," Callaway says of her new plan that took effect a month before the exchanges open. "Surely there will be better options for our family out there with the new health care exchanges. I'm looking for that silver lining."