Insurance exchanges: Directs states to establish insurance exchanges where individuals and small businesses can compare various insurers’ healthcare plans, band together to form larger purchasing groups, and obtain coverage at more affordable rates. In states that choose not to establish such exchanges, the federal government will do so.

Premium subsidies: Provides sliding-scale subsidies that reduce the cost of coverage. To be eligible for a premium subsidy, household income must be between 100 percent and 400 percent of the FPL. (Below 100 percent of FPL, the household qualifies for Medicaid. Above 400 percent of FPL, subsidies are no longer available.)

Large employer mandate: Requires employers with more than 50 full-time employees to offer “affordable” coverage to their workforce or pay an annual penalty to the IRS. “Full-time” employees are defined as working 30 hours or more per week (which means the law does not apply to part-time workers). The amount of the penalty depends on whether the employer does or does not offer coverage and whether any of the employees receive a premium credit for purchasing individual or family coverage on a state-based exchange.

Small employer subsidies: Offers a modest tax credit to small employers to help defray some of the cost of purchasing health insurance for their employees. To be eligible, a small business must meet the following criteria: (a) 25 full-time employees or fewer (meaning tax credit subsidies are unavailable for companies with between 26 and 50 employees); (2) average annual wage less than $50,000; and (3) employer contributes at least 50 percent to the premium cost.


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