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