WEXFORD — Many people think the federal government will provide health care insurance under the Affordable Care Act. However, that is not true.

But what the act does is set up insurance exchanges in each state where people can find insurance plans and rates from different companies, according to Manda Sanders, a senior government affairs representative with Highmark.

She spoke Wednesday to about 100 business people at a meeting sponsored by SMC Business Councils.

The event, which was at The Chadwick, focused on the new federal health care reform act, parts of which are already in effect with more requirements still to be phased in.

Either the state, the federal government, or a partnership of the two will set up website insurance exchanges.

“Then businesses and individuals can go to that site to look for the plan that will work best for them,” she said.

Besides providing the insurance information, the exchanges must provide a 24 hour hotline, quality ratings to insurance company plans, uniform enrollment forms, outreach to help consumers with insurance enrollment, help to determine who is eligible for governmental subsidies and provide an online calculator to help consumers determine what they can afford.

For people who live certain points below the federal poverty level, the federal government will provide subsidies to those who apply to help pay for insurance, Sanders said.

Pennsylvania has not decided what kind of exchange it will have, she said.

Sanders said that the act was meant to do six things by 2014: bring insurance market reform, have individuals get health insurance, provide government subsidies to people who can’t afford insurance through their work, develop insurance exchanges for one-stop-shopping for insurance, expand Medicaid and set up a penalty system for employers who do not provide insurance.

Reform to the insurance industry comes in the form of no one being denied insurance for a preexisting condition and of having insurance rates based on only three criteria: geography, age and tobacco use.

Individuals must get health insurance through their employer, and if they don’t, they can be fined, Sanders said, with fines starting at $95 in 2014, $325 in 2015 and $695 in 2016.

“There are hardship exceptions,” she said of the fines.

As for employer penalties, businesses with 50 or more employees that do not provide affordable insurance to their employees can be fined $2,000 per employee, per year, minus the first 30 employees.

Sanders said affordable insurance, according to the law, is less than 9.5 percent of a person’s annual income.

Employees with unaffordable health insurance can go to an exchange and if they get a cheaper insurance plan, the employer can be fined $3,000 per year per employee.

A list of new taxes will help to finance the new health care laws including:

A 2011 branded pharmaceuticals tax

A 2013 medical device tax

A 2018 Cadillac tax for businesses that provide health care plans that cost more than $10,700 per year for an individual or $27,500 per year for a family. That is a 40 percent tax on the amount of money the insurance plan costs above those thresholds.

The timeline, Sanders said, for the health care act to be in place is:

n Nov. 16, 2012, States must have submitted plans for exchanges.

n Jan. 1, 2013, The U.S. Department of Health and Human Services will issue approval for state based exchanges.

n Oct. 1, 2013, Open enrollment for the exchanges begins, and they must be up and running.

n Jan. 1, 2014, The exchange plan goes into effect.