Affordable Care Act (ACA)

The federal legislation, implementing regulations, and related guidance that brought about significant changes to the US health care system. The Affordable Care Act (ACA), which is also referred to as health care reform, includes expanded requirements applicable to employers, health plans, insurers, and individuals. The ACA consists of two statutes:

Among other things, the ACA:

  • Provides for tax credits for small employers that purchase insurance for their employees.

  • Adds a program that provides reimbursement to participating employer plans for certain health benefit costs for early retirees and their spouses, surviving spouses, and dependents.

  • Requires individuals to obtain minimum essential health coverage and penalizes those who do not purchase coverage.

  • Requires employers to provide minimum essential health coverage to employees or be penalized.

  • Requires states to create health benefit exchanges through which individuals and small employers can purchase health insurance.

  • Implements insurance market reforms, including to prohibit:

    • lifetime and annual limits on essential health benefits;

    • preexisting condition exclusions;

    • discrimination based on preexisting conditions or other health status; and

    • waiting periods longer than 90 days.

For analysis of the ACA's requirements, see Practice Note, Affordable Care Act (ACA) Overview ( and Affordable Care Act (ACA) Toolkit ( .

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