For Small Businesses:
The Facts on the New Health Care Law

3
What is the Affordable Care Act?
The Affordable Care Act is a law passed by
Congress and signed by the President in March
2010. It puts in place health insurance reforms
that will roll out over four years and beyond,
with many changes taking place in 2014.
4
2010
• Small Business Premium Tax Credit becomes available
• Protections for Consumers:
No pre-existing condition discrimination for kids,
under 26 can stay on parents’ plan, no lifetime limits/
annual limits phaseout begins
• In many plans: preventive services like mammograms
and colonoscopies covered without a co-pay
2011
• Rate Review: insurance company
premium increases begin to be
reviewed by an independent third
party
2012
5
• 80/20 rule: rebates for consumers if the insurance company
doesn’t spend 80 cents of each dollar on medical care/quality
improvement
• Health insurance plans begin to provide easy-to-understand
benefit summaries
2014
• Competitive Healthcare Marketplaces (Exchanges) begin:
one-stop shops where individuals and small businesses
can purchase affordable private health insurance
• Members of Congress will get their healthcare from the
exchanges – just like millions of Americans
• Individual responsibility requirements begin; tax credits
for purchasing health insurance available for those who
qualify
• Protections for Consumers: no discrimination against
anyone with a pre-existing condition, annual limits
eliminated
The Big
Picture
6
Why is the Affordable Care Act necessary?
For too long, we had a health insurance
market that worked very well for big
insurance companies, but not so well for
American families and small businesses.
For many years, Americans watched
their health insurance costs rise more
rapidly than their wages. From 1999-2009,
health insurance costs and premiums
skyrocketed, leaving employers in the
difficult position of deciding whether they
could continue to maintain coverage for
their workers. And small businesses paid
an average of 18 percent more for the
same health coverage as large businesses.
The Affordable Care Act was signed into
law to give hard-working families and
employers the security they deserve, to
hold insurance companies accountable
and end some of the worst abuses of the
insurance industry, and to help drive
down health care costs. It builds upon the
existing private employer-based system of
health-insurance coverage.
7
8
Quick Facts
• The law helps ensure that
people who have coverage now
can keep it and will be protected
from the worst insurance
company abuses. For example,
uninsured people with
pre-existing conditions have
had very few options in the
private insurance market.
Now, thanks to the law, they
can enroll in a Pre-Existing
Condition Insurance Plan
in their State. In 2014,
discriminating against anyone
because of a pre-existing
condition will be illegal.
• The law makes sure health
care dollars are spent wisely
and helps control costs. If
insurance companies don’t
spend at least 80 percent
of your premium dollar on
medical care and quality
improvement activities, rather
than advertising and bonuses
for executives, they will have
to provide you a rebate. The
first rebates will be made in
the summer of 2012. And
starting September 1, 2011,
in every State and for the
first time ever, insurance
companies are required to
publicly justify their actions if
they want to raise rates by 10
percent or more.
9
• The law creates opportunities
for better access to affordable
care. In addition to features
like letting a young adult stay
on their parents’ plan until
the age of 26 if they can’t get
coverage through work, the law
establishes new, competitive
marketplaces in each State
called Affordable Insurance
Exchanges. In 2014, families
and small business owners
will be able to shop in the
Exchanges where they will
have access to the same kinds
of private insurance choices as
Members of Congress.
The Details
10