The Affordable Care Act

Learn more about the Affordable Care Act (ACA or “Obamacare”)


What is the Affordable Care Act?

The Affordable Care Act (ACA), also known as “Obamacare” is a major health-care reform bill that was signed into law in 2010 by former president Barack Obama.


How does the Affordable Care Act work?

ObamaCare, or the ACA, requires everyone to have health insurance or pay a tax penalty in order to reduce the amount of uncompensated care the average U.S. family pays for.

There is an Open Enrollment Period (OPE), which is the time frame during which you can enroll for coverage for the following year. Failure to enroll in a new plan or renewing an old plan by the deadline will result in a tax penalty.

However, consumers who experience a qualifying life event can enroll in a Covered California health insurance plan even outside of the open-enrollment period through special enrollment.


What’s covered?

The Affordable Care Act requires all major medial health insurance plans to provide coverage for what is referrent to as the “10 Essential Health Benefits”. This includes:

  • Laboratory Services
  • Emergency Services
  • Prescription Drugs
  • Mental Health & Substance Use Disorder Services
  • Maternity & Newborn Care
  • Pediatric Services (including oral & vision care)
  • Rehabilitative & Habilitative Services and Devices
  • Ambulatory Patient Services
  • Preventive & Wellness Services & Chronic Disease Management
  • Hospitalization

What types of health insurance plans can you buy?

Under ACA, you can buy the following types of health insurance plans:

  • Major Medical Plans
  • Qualified Health Plans
  • Catastrophic Plans
  • Supplemental Plans
  • Gap (Short-Term) Plans

Major Medical Plans, Qualified Health Plans, and Catastrophic Plans usually begin coverage within 45 days and will help you avoid the tax penalty. All three cover ACA mandated benefits as well.

Supplemental Plans and Gap (Short-Term) Plans help fill gaps in coverage and usually begin coverage within 2 weeks. You could be subject to a tax penalty with these plans and they will not cover the ACA mandated benefits.


What are subsidies?

Subsidies, also known as Premium Tax Credits, are a form of financial assistance available from the federal government for individual health insurance plans. You may use a subsidy when you buy a “qualified health plan” (QHP).

The Affordable Care Act determines whether or not you’re eligible for subsidies based on the following criteria:

  • You live in the United States
  • You are a U.S. citizen, national, or otherwise lawfully present in the United States
  • You are not incarcerated (in jail or prison)
  • Your combined total household income is between 133% and 400% of the Federal Poverty Level (FPL).

*In most states, people with incomes below 133% of FPL will qualify for Medicaid.


To learn more about the Affordable Care Act (ACA or Obamacare), call Jessica Liu Insurance Services at 415-386-2283 and talk with one of our agents today. We’re right here in San Francisco, ready to guide you toward a more secure future!

Need an insurance quote? Get in touch!

Access quotes from California's most trusted insurance carriers. It’s comparison shopping at the click of a mouse.

Request a Quote 415-386-2283