What Qualifies as Health Insurance Under the Affordable Care Act?

Now that most Americans must carry health insurance, making sure your policy meets the minimum coverage standards set by the Affordable Care Act is crucial if you want to avoid paying a tax penalty when you file your 2014 taxes in 2015.

If you have job-based health insurance, your plan most likely meets minimum coverage standards. In some cases, you may also be able to keep your plan until October 2016 even if it doesn’t meet minimum standards due to a two-year extension.

The law requires health plans sold outside and inside the online Health Insurance Marketplace to include a package of “essential health benefits.” Health plans also must cover at least 60 percent of the total cost of your medical services.

Essential health benefits cover 10 categories:

• Ambulatory patient services (outpatient care that doesn’t require hospitalization)
• Emergency services
• Hospitalization (such as surgery)
• Maternity and newborn care (before and after your baby is born)
• Mental health and substance abuse disorder services, including behavioral health treatment
• Prescription drugs
• Rehabilitative and habilitative services and devices
• Laboratory services
• Preventive and wellness services and chronic disease management
• Pediatric services, including medical, dental and vision care

Coverage under each category varies in every state and even within plans offered in the same state, so carefully check benefits when comparing plans. Some plans may offer coverage that goes beyond the essential health benefits.

Another caveat: Self-insured large employers that pay the costs of their employees’ health care and “grandfathered” plans created or bought on or before March 23, 2010 do not have to provide essential benefits.

If you still have questions about health care requirements, TurboTax has you covered. TurboTax Health can answer your questions about whether the new health care law impacts you and your taxes.