---
title: "Affordable Care Act: Phase One Update"
description: "Affordable Care Act: Phase One Update"
image: https://www.mbrbilling.com/hs-fs/file-650778815-jpg/images/affordable-care-act-logo-generic-780x328-resized-600.jpg
---

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# Medical Billing Blog

# Affordable Care Act: Phase One Update

Posted by [Scott Shatzman](https://www.mbrbilling.com/blog/author/scott-shatzman) on Tue, Apr, 08, 2014 @ 07:04 AM

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![Affordable Care Act logo generic 780x328 resized 600](https://www.mbrbilling.com/hs-fs/file-650778815-jpg/images/affordable-care-act-logo-generic-780x328-resized-600.jpg?width=350&height=146&name=affordable-care-act-logo-generic-780x328-resized-600.jpg)March 23rd marked the four-year anniversary of enactment of the Affordable Care Act (ACA). Most of the past four years have been spent developing the infrastructure and refining the policies to implement the law. Implementation began on October 1st, 2013, when the first open enrollment period went live. Now, as the first open enrollment period comes to an end, it seems like an appropriate opportunity to examine the state of the ACA as “phase one” comes to an end.

 

The Federal and State Health Insurance Exchanges began accepting enrollments from individuals and families on October 1st, 2013. The launch was rocky by any reasonable standard. The Federal Exchange was still “under construction” on October 1st and while some States had very smooth launches, many experienced significant issues. It took about two months to get the Federal Exchange to a truly functional level.

 

Despite these early challenges, the Department of Health and Human Services announced that 7.1 million people had enrolled in Qualified Health Plans via the Federal and State Exchanges by the end of March.

 

In addition to those purchasing private insurance through the Exchanges, approximately 6 Million people enrolled in Medicaid between October 1st and March 31st.  While the federal government has released the data on the total number of people who have enrolled, there is not much government data on how many of these enrollments are from individuals who were previously uninsured.

 

According to independent analysts, approximately 9.5 million people who had not previously been insured found coverage either through the Exchanges, Medicaid or by continuation of coverage on their parent’s policy. 

 

To date, there is no credible information on the demographics of these newly insured individuals.

 

A penalty will be imposed on individuals and families who fail to enroll in a health insurance plan before the March 31st deadline and maintain that coverage through the remainder of 2014 - unless they qualify for an [exemption](http://marketplace.cms.gov/getofficialresources/publications-and-articles/exemptions-from-the-health-insurance-marketplace-fee.pdf).  Individuals must have insurance for 9 of the 12 months of the calendar year to avoid the penalty.

 

In 2014, the yearly fee for failure to maintain health insurance coverage is 1% of your income for the year or $95 per person in your household, whichever is higher. The payment for uninsured children under 18 is $47.50 per child. Regardless of the number of people in your household, the most a family would have to pay in 2014 is $285.

 

Unlike the individual mandate, the employer mandate has been delayed until 2015/16. Small businesses with 50-99 full-time employees (FTE’s) will need to start insuring workers by 2016. Those with 100 or more employees will be required to start providing health benefits in 2015.

 

Individuals who failed to enroll in a plan by the March 31st deadline will be prohibited from enrolling in an insurance plan until November when the new “open season” begins.  Coverage under the new open reenrollment will not commence until January 1, 2015.  If an individual has a so-called “life event”  during the next nine months, he/she will be permitted to purchase health insurance but otherwise, the health insurance market is closed until November.

 

CMS is now looking at ways to improve the plans for the next enrollment period. CMS is hoping to address issues such as overly-narrow networks and providing ample risk insurance to the insurance companies to protect them from a lack of “healthier” young enrollees.  The demographic make-up of the newly insured will be one of the more closely watched pieces of data when it is released by the federal government and the individual health plans.

 

Now that “phase one” is coming to an end, it will be interesting to see the more detailed enrollment data, what changes CMS plans to make and how insurance companies implement the changes for 2015. It will also be important to note how the lessons learned from “phase one” affect the further development of state and federal Exchanges moving forward.

 

Thank you to Bill Finerfrock, Matt Reiter, Lara Burt and Carolyn Bounds for contributing the article. 

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