March 2013 CBA REPORT
It is time to face facts.
The Supreme Court did not over-
turn the individual mandate, President
Obama won re-election, and the Mayan
calendar did not accurately predict the
end of the world, so the major provisions
of the Patient Protection and Affordable
Care Act (affectionately or derisively
known as “Obamacare”) will very likely
take effect in 2014.
Obamacare will touch almost every
person and almost every employer in
America, so we and our clients should be
informed about the law and its effects.
This article, which will provide a high-
level view of the law, is the first in a series
that will explore the major provisions of
Obamacare leading up to 2014.
Guaranteed Access and Fair
Obamacare was designed to make
health coverage more affordable and
easier to obtain. One method of achiev-
ing this goal includes abolishing health
insurance or health plan requirements
that would exclude high-risk individuals
from coverage. Beginning in 2014:
• Health insurance companies will not
be permitted to deny coverage to an
individual as a result of his or her
• Health insurance companies may
not take an individual’s health
condition into account when deter-
mining the cost of an individual or
small group health insurance policy.
The cost of the policy may vary only
with respect to age, family size,
tobacco use and geography.
• Insurance policies and group health
plans will not be permitted to delay
or deny benefits to any individual
as a result of a pre-existing health
Knowing that insurance companies
will be required to accept people and
price policies without regard to health
conditions, it may be tempting for some-
one to wait until he or she is sick before
obtaining coverage. If everyone took that
approach, adverse selection would result
in skyrocketing premiums.
To avoid that result, Obamacare
requires that most Americans will be
required to pay a tax penalty if they do
not have a certain level of health coverage
on and after January 1, 2014.
Individuals may obtain sufficient
coverage through a number of channels
including Medicare, Medicaid, an em-
ployer group health plan or an individual
To help individuals easily obtain in-
dividual insurance policies, Obamacare
created marketplaces called exchanges.
The exchange is designed to be a place
where an individual can research and
compare standardized health insurance
The exchange will set the standards
for policies that may be offered through
it. It will also determine an individual’s
eligibility for an exchange policy and for
federal assistance to help the individual
pay for the policy.
Each state will have its own exchange,
which may be established and run by the
state, the federal government, or both
in partnership. Unless the government
issues a delay, exchanges must be up
and running for an enrollment period
in October 2013 for coverage effective
beginning January 1, 2014.
Beginning in 2014, many employers
will be required to pay a penalty if they
do not offer a certain level of affordable
health coverage to their full-time em-
ployees. In addition, most employer plans
will be required to comply with certain
requirements, such as elimination of
lifetime and annual limits on essential
Future articles in this series will ex-
plore components of Obamacare in more
detail with a focus on the exchanges and
employer group health plan require-
We no longer have any excuse — the
waiting is over, and it is time to prepare.
Wilcoxon is a partner inThompson Hine LLP’s
employee benefits and executive compensation group
and advises employers on the legal requirements
applicable to group health plans.
By Kimberly Wilcoxon
What the HEALTH
is Going to Happen in 2014?
Ed. Note: This is the first in a series of articles that will be published in the CBA Report over the next several
months related to the 2014 implementation of the Patient Protection and Affordable Care Act. This information
was submitted for publication on February 1, 2013. It does not reflect guidance issued on or after this date.