The Market is open for business! Are you shopping?
Disclaimer: Just a reminder that these seven ACA-related blogs are in no way intended to pick sides or point fingers regarding the good and bad of health reform, or its legislators. My goal has been to simply dissect a few areas of the law to make it as understandable as possible to those who will be affected by its existence (even though its existence seems to constantly hang in the balance).
The long awaited, much debated federal Health Exchange Marketplace opened for business on Oct 1, 2013. Anyone can register for their health insurance through the federal’s Marketplace; however, some states operate their own. The states that don’t have their own are those whose representatives on Capitol Hill voted not to participate. Just because your state doesn’t have its own Marketplace does NOT exempt you from the law’s mandated coverage. If you go to Healthcare.gov, it will tell you which situation applies to your state.
Bottom line, you must now begin signing up for health insurance or eventually get fined.
One little piggy went to the marketplace,
Another little piggy stayed home.
The first little piggy got health insurance coverage,
The second little piggy desired none.
That second little piggy will have fees, fees, fees, when all is said and done.
Unless you’ve been living under a rock and haven’t heard, the process for signing up for health insurance through the new Marketplace hit a serious brick wall. The Healthcare.gov site incurred a myriad of registration problems disallowing people to sign up the coverage when they were promised. As of the date of this blog posting, it’s still not working properly. If your state has its own health insurance site USE IT and don’t wait on the federal site to be corrected.
One little piggy went to his state marketplace,
Another little piggy went to the fed’s site.
The first little piggy got instantly insured,
The second little piggy tried all night.
That second little piggy said my, my, my, something just ain’t right.
Also, as a result of all the government’s website issues, the uninsured public now has until March 31, 2014 to sign up instead of the original deadline of January 31, 2014. If you enroll by December 15, 2013, your coverage will begin January 1, 2104.
Before registering, be clear on these matters
In spite of all the bugs, kinks and glitches that need to be cleared up with the government’s site, all uninsured Americans are required to have health insurance. Here are just a few things you should be fully aware of as you chose to abide by or ignore that law:
You are already covered if you…
…have Medicare, Medicaid, CHIP, health plan through your job, COBRA, or other types of plans you purchased on your own. You can switch from your job-based plan to a Marketplace plan but you may not qualify for lower premiums based on income. You cannot use the Marketplace plan as a supplement plan.
You will pay a penalty fee (a tax) if you…
… choose not to be covered. In 2014, your household’s penalty will be $95 per adult, $47.50 per child, or 1% of your income–whichever is higher. Payable with your 2015 tax return. In 2015, that penalty will increase to the higher of 2.0% of annual income or $325 per person. Payable with your 2016 tax return. The following year it will be the greater of 2.5% of income or $695 per person. Payable with your 2017 tax return. After 2016, the penalty amount will be indexed to the cost of living.
You may be exempt from the penalty tax if you…
…were uninsured for only three months of the year; if you can claim a hardship; or if your income is below a certain amount. You must file for one of these exemptions. It’s done either when you fill out your federal tax return or at any time through the Marketplace.
There are a lot of variables under the claim of hardship and affordability, so if you think you qualify, look into this carefully so that you can be specific in your claim. I will cover this topic fully in the next and final article of this series.
You can lower your insurance premiums if you…
…qualify for a tax credit called Advance Premium Tax Credit. If you qualify, you can receive advance payments of this tax credit to lower your monthly premium costs right away. You choose how much of it to apply to your premiums each month, up to a maximum amount.
If the amount of advance credit payments for the year is less than the tax credit you’re due, the difference is refunded to you when you file your federal tax return. If your advance payments for the year are more than the amount of your credit, you repay the excess advance payments with your tax return.
Exactly how much you will save with the tax credit depends on your family size and income. If your income falls within these following ranges, you’ll qualify to save money on your premiums in 2014. The lower your income within these ranges, the more you’ll save. (These 2013 figures may be slightly higher in 2014.)
- $11,490 to $45,960 for individuals
- $15,510 to $62,040 for a family of 2
- $19,530 to $78,120 for a family of 3
- $23,550 to $94,200 for a family of 4
- $27,570 to $110,280 for a family of 5
- $31,590 to $126,360 for a family of 6
- $35,610 to $142,440 for a family of 7
- $39,630 to $158,520 for a family of 8
If your income in 2013 is below the amounts shown, then you may qualify for your state’s Medicaid coverage. If your state is not expanding its Medicaid program in 2014, leaving you ineligible for those benefits, unfortunately, you won’t be able to get lower costs on the Marketplace through the tax credit either. You would therefore have to pay the entire cost of a Marketplace insurance plan.
Indeed, there are truly so many details that require your attention to ensure you are compliant with the law and that you are receiving all the savings to your premiums for which you qualify. Speaking of savings, in the next and final blog of this 7-Part series, I will cover the various exemptions to the ACA that could save a qualified person from paying hundreds of dollars in penalties. Stay tuned…