Affordable Care Act (ACA) | Meaning and Definition

What is ACA?

ACA stands for Affordable Care Act. It was formerly known as the Patient Protection and Affordable Care Act. ACA is popularly known as Obamacare.

The ACA was a comprehensive law developed to reform healthcare policies in America. It was passed in March 2010 under the leadership of President Barack Obama. As such, it is popularly known as Obamacare. This act had three primary goals, which revolved around making healthcare facilities in America available to a larger number of citizens. The three goals include: –

Making healthcare more affordable for citizens and available for the benefit of more citizens through subsidies. These are primarily designed for households where incomes are 100%-400% lower than the federal poverty line.

The expansion of the Medicaid program to include all adults whose income amounts to lower than 138% of the Federal Poverty Line. The Medicaid program provides low-cost or free healthcare to individuals belonging to low-income households.

Create and encourage the development of methods to deliver medical care, which would effectively help reduce costs in the long run.

To achieve these goals, the act introduced several groundbreaking policies like: –

Setting up new criteria to become eligible or qualify to receive ACA benefits.

Setting up new policies to redefine the meaning of full-time employees.

Establishing dedicated marketplaces for Health Insurance

Making health insurance mandatory and requiring proof of enrollment to avoid tax penalties.

Making it mandatory for employers who have over 50 employees to provide health insurance to all employees.

┬áConsidering its impact on an individual’s financial conditions, companies and HR departments are often asked to or required to ensure that prospective employees are aware of these factors to make an informed choice. Since it comes into play with tax filing, individuals need to comply with the policies.