Disclaimer: I am not expressing my opinion about whether I agree with the Affordable Care Act or not. I am simply outlining what it is supposed to do and how this affects freelancers.
Health insurance is important because it protects you from costly hospital bills if you need extensive medical care. Despite this fact, many freelancers have chosen not to get health care coverage because the monthly costs are hard to manage. That is no longer an option since the Affordable Care Act (ACA) went into effect on January 1, 2014. All U.S. legal residents are now required under the law to have health care coverage or pay a penalty.
Why the U.S. Was Overdue for Health Care Reform
Before the ACA went into effect, people with health insurance had to pay high premiums to cover health care costs for people who were uninsured. This was partially because the Emergency Treatment and Labor Act prevented hospitals from turning anyone away that needed acute care and hospitals had to recoup the costs somewhere. The ACA attempts to even out the costs among all legal residents and get rid of the distributive injustice. The main goal of the ACA is to give all legal residents access to health care at a fair price.
Of course, the ACA also acknowledges that it is unlawful and unethical to require citizens to purchase something that is unaffordable. This is supported by the U.S. Constitution in Article 1, Section 8, Clause 3. Therefore, insurance costs are now based on individual earning levels. This means that if you have a low income, you’ll pay less for health care coverage. This is good news for many freelancers.
What Changes Are Made to Health Care Under the ACA?
The ACA doesn’t just make health care coverage affordable for everyone; there are several other significant changes. For instance, insurance companies are no longer able to deny coverage to people with pre-existing conditions and no maximum annual or lifetime limit can be placed on health insurance. There are also clauses that make preventative care free and allow people under the age of 26 to remain on their parents’ health insurance. These are just the highlights; you can read about the other changes on Healthcare.gov.
What Does the ACA Mean for Freelancers?
The ACA attempts to put freelancers, and all legal residents, back in charge of their health care. It does this by giving access to health care exchanges where everyone can purchase affordable health care coverage. There are HMO options and many other cost-saving options. Whether freelancers like it or not, they are required to get health care coverage.
People who are uninsured in 2014 are subject to a penalty. It is currently set at $95 for each adult or one percent of a family’s income, whichever is higher. Additionally, the penalty will go up every year. However, freelancers are eligible for a special tax credit if their income is under 400 percent of the Federal Poverty Level. This helps many freelancers who were previously uninsured.
The ACA has been the cause of a lot of debate, but everyone must comply since it is now law. As a freelancer, do you think the ACA helps you or hurts you? Leave a comment below.