Many major laws take time to reach full implementation. This is especially true for the Affordable Care Act (ACA), also known as ObamaCare. The ACA takes several years to become fully effective, culminating in 2020.

Most of the significant reforms were effective January 1, 2014. These included operational state and federal health insurance marketplaces; regulations on how insurers can price, limit, or deny coverage; a minimum standard of essential benefits being required on new policies; Medicaid expansion in many states and a tax penalty on those who were uninsured without an exemption after March 31, 2014.

However, there are additional provisions that go into effect in 2015 and it’s important to be aware of what’s changing — both for individuals and for businesses.

ACA Changes for Individuals

For many Americans, the changes to ObamaCare will not be significant ones in 2015. Job-based insurance plans have generally already been updated to take into account the new regulations. However, for those who purchase insurance through the Marketplace, there are important changes to keep in mind.

First, the tax penalty for being uninsured will increase. The 2015 penalty will be the larger of 2% of income or $325 per person ($162.50 per child under 18). The tax penalty goes up again in 2016, so the cost of being uninsured will not be easy to ignore. For those who are unable to obtain insurance, an exemption may be applied for to avoid the tax penalty. However, this exemption does not provide a person with coverage.

Secondly, in 2015 ObamaCare may cause insurance premiums to rise again. While the government was pleased with the outcome of the 2013-2014 enrollment period, the insurance market still faces the problem of younger, healthier Americans choosing to forgo insurance while sicker Americans obtain it. This can drive costs up and if other cost-cutting measures aren’t successful, premiums will rise to compensate.

The open enrollment period will also be shorter for insurance that begins in 2015. At the beginning of the ObamaCare rollout, the open enrollment period was five months. The reason for this was to allow for Americans to become acclimated to the system and to work out the technical issues. The next open enrollment period will only be three months, from November 15, 2014 to February 15, 2015. Consumers may also find different plans available as insurers adjust to the Marketplace and consumer needs. Despite the shorter enrollment period, the Obama administration is making plans to improve enrollment next year.

Finally, the Federal Poverty Level will be updated to 2014 levels for the next enrollment period, affecting how much financial assistance will be available to lower-income Americans. In most cases, since the poverty level is slightly higher, Americans will find that their financial assistance increases or stays the same if their income remains the same.

ACA Changes for Companies

The most important change affecting businesses in 2015 applies to businesses with 100 or more full-time equivalent employees. These employers must begin to offer affordable coverage to full-time staff that offers the essential benefits required under the ACA. In addition, these policies must cover full time employees’ dependent children up through age 26. If businesses of this size choose not to offer insurance, they will instead pay a tax penalty to the government. This provision will apply to businesses with 50 or more full-time employees in 2016.

There has been a lot of concern on what this will mean for the labor market moving forward. Some companies have moved to reduce the number of staff working full time hours (defined in the ACA as 30 hours a week or more). This will save the company money because they will have fewer employees they have to cover. However, it has also been argued that many businesses already offer medical benefits to full time staff, so this may not have as large an impact on business as expected.

The ACA continues to roll out new provisions each year until full implementation in 2020. While the changes to Obamacare in 2015 are small compared to the previous year, they still affect how Americans pay for and access health insurance. It’s important to keep up to date on changes in the health insurance laws so that you can make the best healthcare choices for yourself and your family.

Sources: Sheet 021014.pdf