It’s hard to believe, but the Affordable Care Act (ACA) turns 15 this year. Signed into law by President Barack Obama in March 2010, the ACA has reshaped health care in the U.S. during the past decade and a half. Most of its key provisions rolled out by January 2014, with others taking effect in 2020. While the individual mandate was repealed in 2017 —eliminating the penalty for not having health insurance by 2019 — the employer mandate is still in place. (More on that below).
In 2010, it was estimated that nearly 50 million Americans, about 16% of the population, were uninsured — without any form of health insurance. During the years since then, the uninsured population has declined as much as half — with around eight percent without health insurance in 2023. In 2024, the National Centers for Health Statistics reported the number of those under age 65 without insurance was back up to 9.1%
In this post, we’ll dive into the key goals of the ACA, explore its provisions, uncover the positive impact it’s had on consumers, and break down how it’s reshaped the insurance industry.
ACA Key Goals and Provisions
When the ACA was launched, its mission was clear: make health insurance more affordable for Americans, improve the quality of health care, and strengthen patients’ rights and protections.
Here are eight ways the ACA has improved group health plans and impacted the lives of employees with employer-sponsored health insurance.
1: Prohibiting pre-existing health condition exclusions: Under the ACA, federal and state marketplace plans must include treatment for pre-existing medical conditions. No insurer can reject an applicant, charge the individual more, or refuse to pay for essential health benefits for a health condition a person had before ACA coverage started. Once enrolled, the plan cannot deny coverage or raise rates for coverage based on the person’s changing health condition.
Neither Medicaid (Medi-Cal in California) nor the Children’s Health Insurance Program can refuse to cover a qualified individual because of a pre-existing health condition.
Pregnancy is covered from the day coverage under the ACA plan begins. For additional information on coverage for pregnancy, visit the HealthCare.gov website.
Prior to the ACA, some health plans limited or did not cover health conditions that predated a person’s coverage. A person who obtained new coverage during pregnancy might have pregnancy-related treatments denied. Similarly, someone with a chronic condition like diabetes might have their new insurer deny coverage for diabetes-related treatment. That discrimination no longer applies.
2: Eliminating lifetime or annual coverage limits. The ACA prohibits insurance companies from limiting expenses for essential health benefits — either on an annual basis or during the entire time someone is enrolled in a plan.
This prohibition applies to all individual and job-based health plans, including plans that are grandfathered under the ACA.
Prior to the ACA, it was not uncommon for an insurer to limit coverage during a calendar year to a specified dollar amount or limit the payout during the entire time someone is enrolled to $1 million or less.
3: Allowing parents to maintain insurance coverage for a child through age 26. If a parent’s health insurance covers dependents, the parent can add or maintain coverage for a child until the child turns age 26.
A child can be added to the parent’s health plan during the plan’s yearly open enrollment or during a Special Enrollment Period, which could be triggered by losing health coverage elsewhere, moving, marriage, or having a baby or adopting a child. Refer to the Special Enrollment Period definition on HealthCare.gov for details. The child’s student status, marital status, and living situation do not matter.
Prior to the ACA, coverage for a child was often limited to children claimed as a dependent on a parent’s taxes or those who were full-time students. Coverage typically would end when the child reached age 19.
4: Requiring Marketplace health insurance plans to cover 10 essential health benefits (EHBs), including:
- Ambulatory patient services (outpatient care you get without being admitted to a hospital)
- Emergency services
- Hospitalization (such as surgery and overnight stays)
- Pregnancy, maternity, and newborn care (both before and after birth)
- Mental health and substance use disorder services, including behavioral health treatment (including counseling and psychotherapy)
- Prescription drugs
- Rehabilitative and habilitative services and devices (services and devices to help people with injuries, disabilities, or chronic conditions, or to gain or recover mental and physical skills)
- Laboratory services
- Preventive and wellness services and chronic disease management
- Pediatric services, including oral and vision care (Adult dental and vision coverage are not considered essential health benefits)
ACA-compliant plans must also include:
EHBs are minimum requirements for all Marketplace plans. Specific services covered in each broad benefit category can vary based on state/jurisdiction requirements.
Plans may offer additional benefits, including dental coverage, vision coverage, and medical management programs (for specific needs like weight management, back pain, and diabetes).
In the past, competing health plans had major differences in what they did and didn’t cover. Now employees have access to improved care plus preventive care services without cost-sharing.
5: Setting a minimum Medical Loss Ratio (MLR) for insurers offering ACA plans. The ACA requires insurance companies to spend a specified percentage of collected premiums on medical claims and quality improvement activities (as compared to administrative costs or profits).
For ACA Small Group plans, the minimum MLR is 80%; for ACA Large Group plans, it is 85%. If an insurer fails to meet the minimum MLR, it must issue premium rebates to policyholders.
Before the ACA. MLR reporting and requirements varied significantly by state. Rebating was rare. For additional info, visit the CMS website.
6: Mandating guarantee issue coverage beginning January 1, 2014. All individual and group ACA-compliant health plans must guarantee issue policies to all applicants, regardless of their health status or other factors.
For children under age 19, insurers were prohibited from imposing pre-existing conditions and outright coverage denials beginning September 23, 2011.
The ACA also requires insurers offer renewal as long as the premiums for coverage are paid on schedule.
7: Creating the employer mandate for health insurance. The ACA’s shared responsibility provisions require Applicable Large Employers (ALEs) to offer affordable, minimum essential health coverage that provide “minimum value” to full-time employees and their dependents. If employers do not offer qualifying coverage, they could face potential ACA penalties. Visit the IRS web page and scroll down to “Tax provisions for employers” to learn more.
This change has encouraged more employers to offer coverage and helped employees gain access to affordable plans. Previously, there was no coverage requirement, and many groups did not offer health insurance.
8: Permitting employers to earn a Small Business Health Care Tax Credit. If an employer offers health insurance to employees through the Small Business Health Options Program (SHOP), the business could qualify for a Small Business Health Care Tax Credit. Eligibility is subject to the following:
- The business must have fewer than 25 full-time equivalent (FTE) employees.
- The average employee salary is about $56,000 per year or less.
- The employer pays at least 50% of each full-time employee’s premium costs.
- The business offers SHOP coverage to all full-time employees. (You don’t have to offer it to dependents or employees working fewer than 30 hours per week to qualify for the tax credit.)
Businesses that do not meet the requirements for the Small Business Health Care Tax Credit may still be able to deduct the cost of offering health insurance to employees as a business expense. You should discuss your situation with a professional tax advisor to learn more.
The Future of Group Health Insurance
The ACA has significantly impacted health insurance since it was introduced in 2010, but its future remains uncertain. During the first Trump administration, there were attempts to repeal and replace the ACA. Currently, some in Washington, DC, are pushing for changes to the tax code that allows employers to deduct expenses for employer-sponsored health care. For now, if your business offers qualifying group health insurance to employees, you could benefit from multiple tax advantages. Be sure to consult your financial advisor to understand what deductions might apply to your business.
If you need a coverage quote, ask your health insurance broker for help. Using a broker won’t cost you extra and could actually save you money. Brokers can help you find the best coverage for your business and employees. If you don’t have a broker, we can help you search for one.
