The Patient Protection and Affordable Care Act, or PPACA, could be considered the most significant healthcare-related reform since the creation of Medicare and Medicaid more than forty years ago.
Thanks to this legislation, many LGBT individuals who were never able to afford health insurance—or even basic healthcare expenses—will soon be able to apply for Medicaid or affordable private health insurance coverage. Most importantly, they will not be subject to denial of insurance coverage on the basis of pre-existing conditions.
The Affordable Care Act will also play a key role in expanding cultural competency in the healthcare workforce to include issues that are important to the LGBT community. Such changes are critical in recognizing the increasing diversity of American families.
Because many of the provisions of the PPACA will begin being implemented in 2014, it is important to have a good understanding of how this reform will affect LGBT individuals and businesses, as well as how to prepare for the coming changes. Although there is only one provision in the Act that specifically addresses LGBT individuals, the law as a whole recognizes that there has in the past been a great deal of inequity and disparity in this community in the area of healthcare.
Individual Healthcare Issues
One of the primary aspects of the PPACA is the expansion of healthcare coverage that is comprehensive, as well as affordable and accessible. This includes an “individual mandate” that will require nearly all Americans to enroll in a qualified health insurance plan by 2014.
In order to help those with annual incomes between $14,000 and $42,000 per year, the Act requires that every citizen has online access to either a state or federal health insurance exchange. Beginning in 2014, these health insurance exchanges will act as the marketplace where individuals (and businesses) will be able to compare different health insurance plans, as well as to take advantage of the income-based premium subsidies that will help to keep the coverage more affordable.
In the past, those in the LGBT community have faced certain barriers to obtaining insurance and getting healthcare services. With this in mind, the new healthcare reform will ensure that HIV, high blood pressure, and various other conditions are not used by insurers to deny new coverage or to drop current coverage. In addition, policies may also be available that will cover both partners in a domestic partnership in those states that recognize such relationships.
The Effect on LGBT Business Owners
With the Supreme Court upholding the benefit-related provisions of healthcare reform in early 2013, it will now be essential that employers implement the insurance coverage mandates that were set forth in this legislation.
One of the primary requirements of this reform is that larger employers offer health insurance benefits to full-time employees. This “Employer Mandate” requiring employers with fifty or more full-time (or full-time equivalent) employees being offered affordable coverage was to become effective on January 1, 2014. However, due to several setbacks, the health insurance exchanges for small businesses may not be ready until 2015.
In any case, if employers opt not to offer such benefits, a tax penalty will be levied. Therefore, with some extra time to prepare, small-business owners will need to ensure that they are ready when these changes become effective.
Some of the key considerations in deciding whether or not your business will offer health insurance benefits should include:
• The number of full-time employees on staff
• The number of employees who are expected to enroll in the employer-provided health insurance plan
• Amount of employee wages
• Employee demographics such as age and gender
• The employer’s tax rate
• The cost of providing benefits versus the penalty that would be levied if benefits are not offered to employees.
If your company does decide to provide employer-sponsored benefits, there are a number of additional factors that should be considered, such as:
• The type of plan or plans that will be offered
• How much coverage will be provided (i.e., will the company offer just the minimum amount of required benefits, or will a plan with wider coverage be provided?)
• How will the plan’s premiums be paid?
• How will plan deductibles be handled
Because the PPACA consists of more than two thousand pages of legislation, it is best to work with an advisor who can guide you through the maze of new rules. Likewise, when planning your insurance coverage and finances, it is essential to keep in mind that all situations call for a plan that fits in with your specific needs and goals. Given this, all planning should be conducted using qualified professionals who are well versed in the areas of both tax and finance.
Grace S. Yung, CFP, is a certified financial planner practitioner with experience in helping domestic partners plan their finances since 1994. She is a principal at Midtown Financial LLC in Houston.
See other MoneySmart columns:
The Aging Population (May 2013 OutSmart)
How LGBTs folks can prepare for living longer.
Staying on Top of the Fiscal Cliff (April 2013 OutSmart)
How to maximize your investments, even if your paycheck is smaller
Finding the Funds …to make your IRA contribution (March 2013 OutSmart)
Have You Made Your 2012 IRA Contribution Yet? (February 2013 OutSmart)
There is still time!
What’s Different for 2013? (January 2013 OutSmart)
Considerations for Texas and your future investments.
LGBT Partners… (December 2012 OutSmart)
Working around the denial of your government benefits
Future Tax Rules Can Further Penalize LGBT Investors (November 2012 OutSmart)
But there is still time to act
Protecting your Wallet and your Heart (October 2012 OutSmart)
How and when to keep assets separate—even when you’re madly in love
Domestic Partner Tax Deductions in Home Ownership (September 2012 OutSmart)
With today’s historically low interest rates, it’s certainly a great time to either purchase or refinance a home.
Dying Intestate (August 2012 OutSmart)
Could you be leaving the state in charge of distributing your assets?
Protecting the Things that Matter (July 2012 OutSmart)
How those in the LGBT community can use life insurance planning strategies
When ‘I Do’ Becomes ‘I Don’t Anymore’ (June 2012 OutSmart)
Ensuring both partners’ fair share with a Domestic Partnership Agreement
Retirement (May 2012 OutSmart)
Using annuities can provide lasting income for both domestic partners: When depending on a partner’s retirement income, annuities can offer the perfect solution
Financial and Tax Planning Issues for Domestic Partners (April 2012 OutSmart)
Is Uncle Sam getting a bigger chunk of your income and wealth?
The Real Cost of Long-term Care (February 2012 OutSmart)
How LGBT caregivers are paying the price
Gay Money Matters (part 1) (February 2010 OutSmart)
Domestic Partners: Estate and Tax Planning
Gay Money Matters (part 2) (February 2010 OutSmart)
Protecting your assets . . . even when the rules don’t