ACA Requirements and Exemptions: A Guide for International Study

You must have come across the term Affordable Care Act while looking for insurance before moving to the USA. But what is this term, and why is it important? I will unfold it all in this blog. Learn about ACA, its requirements, and exemptions, and choose your insurance wisely before moving abroad. Let’s Go!

What is the Affordable Care Act?

The Affordable Care Act, also known as Obamacare, is a law passed in 2010. Its primary goals are to:

• Make health insurance more affordable for American citizens.
• Expand Medicaid facilities to make medical facilities available for low-income individuals.
• Support innovative medical care for those who cannot afford it.

Its key features are: 

• Marketplace Insurance: Affordable Care Act Application offers a place for individuals to buy health plans. These plans often come with subsidies based on income.
• Coverage for Pre-Existing Conditions: Insurers cannot deny coverage or charge more for conditions you had before your coverage started.
• Mandated Essential Benefits: The ACA-compliant plans must include every expense, including emergency visits, maternity care, mental health, and prescription drugs.
• No Lifetime Limits: The insurers will not have the right to put any number on how much they will cover your medical expenses during your lifetime.

Benefits of Affordable Care Act

The Affordable Care Act benefits individuals and families by improving access to quality healthcare and reducing overall costs. This act has introduced various new protection plans for patients and expanded coverage options. Along with it, it has also made insurance more inclusive and affordable for millions of individuals across the USA.

Affordable Care Act Benefits for Individuals

The ACA provides coverage for people with pre-existing conditions. Moreover, it also allows the young adults to stay on their parents’ plan until age 26. This provides free preventive services like screenings and vaccinations.

Affordable Care Act Benefits for Low-Income Families

ACA makes Medicaid and income-based subsidies more accessible to low-income individuals. Moreover, it also helps these individuals to afford comprehensive health insurance without compromising on necessary care.

Affordable Care Act Benefits for Public Health

Better medical assistance, public health outcomes, and reduced strain on emergency services are everyone’s right who lives in the USA. Therefore, by increasing access to preventive care and mental health services, the ACA is contributing to all of it. 

ACA Requirements

The Affordable Care Act has several requirements, including several factors such as access to good insurance coverage and affordability. Moreover, it also restricts insurers from limiting annual coverage to insurance holders. 

Here are all the requirements of the ACA that you need to know:

Coverage and Access of the ACA

The Affordable Care Act has significantly expanded health coverage by prohibiting insurance denials based on pre-existing conditions. 

Therefore, it allows young adults to stay on their parents’ plans until age 26, and broadens Medicaid eligibility in participating states. 

Along with it, the purpose of the Health Insurance Marketplace at its core is to provide a centralized place for individuals and families to compare and purchase plans with some subsidies. 

So, essential medical benefits like emergency services, maternity care, and mental health treatments need to be ACA compliant. It ensures a minimum standard of coverage for everyone.

Affordability of ACA

The second requirement of the ACA is that all plans must be affordable. That’s why it has introduced income-based subsidies that reduce monthly premiums and out-of-pocket costs for those who earn between 100% to 400% of the federal poverty level. 

In 2021, the American Rescue Plan increased the subsidy and made it even more eligible for people who need financial help. 

Apart from that, cost-sharing reductions are also available to lower-income groups on silver plans, reducing deductibles and copayments. These measures by the ACA aim to make health insurance for individuals more affordable. 

Other Key Requirements

The ACA established several mandates to increase accountability and improve care quality. For example, Insurers must spend at least 80% of premium dollars on medical care and must publicly justify unreasonable rate increases. 

Moreover, the law also introduced individual and employer mandates, though the federal individual mandate penalty was reduced to $0 in 2019. 

Along with it, preventive services like vaccinations, screenings, and annual check-ups are offered without cost-sharing. This supports early detection and better long-term health outcomes.

ACA Exemptions 

The Affordable Care Act has been enacted to ensure that nearly all U.S. residents have access to good healthcare facilities. So, there are certain individuals who may be exempt from its coverage requirements. 

So understanding these exemptions is important for everyone, especially those who are non-U.S. citizens, short-term residents, or facing financial hardships. One group that is notably affected by ACA policies is international students. 

While these students are not required to meet the individual mandate for ACA, they still need to secure ACA-compliant health insurance for international students. More so, if they are attending universities that mandate comprehensive coverage. 

Below are the two major types of ACA exemptions. Read on: 

1. Short-Term Residency or Foreign Status Exemption

Non-residents, especially international students, often fall under the ACA exemptions. It depends on their visa status and how long they have been in the U.S.A. 

• It is applicable for individuals who are classified as non-residents, especially for the first five calendar years on F-1 visas for tax purposes. 
• There is no requirement to maintain the ACA-compliant coverage during this exemption period. 
• However, despite this exemption, various universities seek ACA-compliant health insurance for international students to ensure adequate care during their studies.

Pro tip: Even if you are exempt, purchasing ACA-compliant plans will offer you better coverage, especially during medical emergencies and chronic care needs. 

2. Hardship and Affordability Exemptions

These exemptions are available to U.S. citizens and permanent residents. Apart from that, if a person is facing difficulty affording insurance or encountering qualifying personal hardships. 

• You might be qualified if the lowest-priced plan exceeds a certain percentage of your household’s annual income. 
• If you have hardships such as eviction, natural disasters, domestic violence, or medical expenses, you will be qualified for the exemptions. 
• If you apply through the Health Insurance Marketplace, with proper documentation to support the claim, you will be exempt from the requirements. 

While international students may not use hardship exemptions, it's good for dependent family members or transitioning visa holders to understand these options if ACA compliance becomes necessary.

FAQs

• What Does ACA Stand For?

ACA refers to the Affordable Care Act, a US healthcare reform law that was signed into being in March 2010. The ACA is commonly referred to as Obamacare, and it sought to increase the number of people with health insurance. Moreover, it also aimed to improve the quality of medical care and slow the rate of healthcare spending.

Under the ACA, millions of Americans, including students, families, and workers at small businesses, have benefited. They are now able to obtain health insurance that is more secure and affordable than before

• Do you get any kind of exemption for the ACA?

Some people are exempt from the ACA requirement to have insurance. Common exceptions include having a very low income, enduring specific hardships like raising a child for whom you receive government support. Although the penalty for the federal individual mandate was zeroed out in 2019, a few states still have their penalties, so it’s wise to know the rules of the state you are living in.

• What is the Highest Income to Qualify for the Affordable Care Act?

There is no firm upper limit on income to qualify for Affordable Care Act coverage. However, to receive subsidies, your income generally must fall somewhere between 100% and 400% of the federal poverty level. However, under current rules, you or your household must earn more than 400% FPL to qualify for these subsidies.

• What do You Mean by an Affordable Care Act Penalty Notice?

An ACA penalty notice is a letter from the IRS that tells employers they may owe a financial penalty for failing to follow the Affordable Care Act. It usually goes out to those who have at least 50 full-time employees. They receive such notice because:

• Did not provide minimum essential coverage to at least 95% of full-time employees, or
• Provided unaffordable or non-minimum value coverage.

Parting Thoughts

Before you choose to go to the USA to fulfil your academic dreams, please learn vividly about the ACA requirements and exemptions. If you know what it is from the core, utilizing its benefits will become easier for you. So, read this blog to get an in-depth knowledge of the Affordable Care Act and have a safe stay in the USA.