ACA (Affordable Care Act)

The Affordable Care Act is the 2010 federal health reform law that reshaped US health insurance. Its major provisions include guaranteed issue and community rating on the individual and small-group markets (no denial for pre-existing conditions), essential health benefit requirements, out-of-pocket maximum limits, dependent coverage to age 26, the Health Insurance Marketplace (Healthcare.gov and state exchanges), premium tax credits for eligible individuals, Medicaid expansion in participating states, and the employer shared-responsibility requirement for large employers.

For employers, the most operationally significant piece is the employer mandate — employers with 50 or more full-time equivalent employees must offer minimum-value, affordable coverage to full-time employees or face penalties. The ACA also created the reporting requirements that produce Forms 1094-C and 1095-C every year. For individuals, the ACA eliminated the ability of insurers to deny coverage or charge more based on health status and set the minimum coverage standards (10 essential health benefits) that every ACA-compliant plan must include. The individual mandate penalty was reduced to zero at the federal level starting in 2019, though a handful of states have their own mandate penalties.

The takeaway: the ACA sets the floor for what a health plan has to look like in most contexts. Any plan design conversation — group, individual, self-funded — has to be checked against ACA rules before it can be finalized.