Health Insurance

What if you still cannot afford health insurance in 2014??

Most of the significant provisions of the new healthcare reform law take effect in 2014. By that year, there will be a federal exchange market–as well as individual markets in many states. These exchanges will be open to individuals and small businesses, some of which will be subsidized.

Said markets will be heavily regulated, in order to ensure that they follow new consumer protections guidelines. In addition, people with pre-existing conditions will have more options than existing high-risk pools or costly guaranteed issue health insurance plans.

Despite these changes, some are still worried that insurance will remain beyond their reach. If the cost of a health plan is still prohibitive financially, will a person be responsible for paying the penalty levied as part of the individual mandate?

Fortunately, that will not be the case. There are some exceptions, specifically included to avoid such a situation:

  • You can apply for a financial hardship exception from the penalties, if you lost your job or had your hours cut.
  • You are not subject to the mandate if your annual income is so low that you are not required to file a tax return.
  • You will also not be penalized if the least expensive health insurance plan available on the exchange is still more than eight percent of your annual income.
  • You will still be eligible to get subsidies to buy affordable health insurance on the exchanges even if your employer offers health insurance. If the employer’s plan costs more than 9.3 percent of your income (and you earn under 400 percent of the federal poverty level).
  • The mandate penalties will be adjusted with the cost of living; if there is a deflationary economy, the amount will go down from the projected 2016 levels: the greater of $695 and $2,085 for individuals and families, respectively–or 2.5 percent of household income.

Nate Akers
Insurance Expert
Licensed Insurance Agent

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Health Insurance

Changing Healthcare 2014

Starting January 1, 2014, four of the biggest changes in the reform legislation are set to be implemented. This is when the “rubber will meet the road” and it all goes from theory into practice. Whether or not this is a big success or another financial burden on our national debt, only time will tell. But, what’s important now is to understand what is expected of you and/or your business and which decisions are best for you.

The 4 biggest changes are:

• Individual Mandate- The PPACA requires all American citizens and legal residents to purchase qualified health insurance coverage. If not, then you will pay a minimum fine of $95 up to 1% of your household income. The fines increase in 2016 to $695 per person or 2.5% of income up to $2085.

• Guaranteed Coverage- Coverage cannot be declined due to pre-existing conditions. For persons who have been unable to get coverage on the individual market due to pre-existing health conditions, they will now be able to get the same coverage and price as a healthy person the same age (smokers are charged additional).

• Health Insurance Marketplace (Exchange)- For individuals and small businesses, the Federal government and some states will provide an Exchange to access health insurance in addition to the traditional method of an insurance agent/broker. In fact, some insurance agents/brokers will provide plans both inside and outside the Federal or State Exchange. The two important points are 1.) an individual can only qualify for a subsidy and 2.) a small business can only qualify for the small business tax credit through a Federal or State Exchange. The Enrollment for the Exchanges opens October 1st this year.

• Pay or Play Rule- For businesses with 50 (FTE/Full-Time Equivalent) employees or more, an affordable “minimum essential coverage” health plan must be provided to their employees or pay a fine. If a business does not provide qualified coverage, the penalty will be the lesser of ($2000 times the # of F/T employees minus 30) or ($3000 times the # of F/T employees that obtain a subsidy for coverage through the Exchange). This penalty is determined on a monthly basis so will pay 1/12 those amounts times the # of months they are not in compliance.

These are the biggest, but far from the only, changes that are coming in 2014. How will you be affected? Do you know the best approach to take? For some, you may not see much difference. For those individual and businesses who want answers to your questions, my suggestion is to speak with an agent/broker that will be providing coverage both inside and outside the Exchange to compare your options and help you make the best decision.

Nate Akers
Insurance Expert
Licensed Insurance Agent

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