Surviving Obamacare: What You Need
Affordable Care Act Basics
On January 1, 2014, the Patient Protection and Affordable Care Act (ACA) - commonly known as “Obamacare”, went into effect requiring all Americans who do not qualify for an exemption or currently have an extended plan (grandfathered or non-ACA plan purchased in 2013 and approved for extension) to carry ACA-approved coverage or be a member of a healthshare plan, or be subject to a tax penalty.
Those with qualifying incomes can benefit from premium subsidies to lower the cost of ACA-approved plans. Guaranteed acceptance of pre-existing medical conditions makes coverage more accessible to those previously denied coverage due to health issues.
Read more below for details about ACA-approved coverage and options that may affect you.
Who is Required to Carry Health Insurance
Almost all Americans are now required to carry health insurance or face a tax penalty. For tax year 2016, the penalty is 2.5% of your total household adjusted gross income (AGI), or $695 per adult and $347.50 per child, to a maximum of $2,085.
For 2017 and beyond, the percentage option will remain at 2.5%, but the flat fee will be adjusted for inflation.
The Internal Revenue Service is in charge of verifying coverage and assessing penalties. There are a few people who will be exempt from the individual mandate. More information can be found on our Individual Mandate page.
People who are members of a healthshare plan are exempt from this tax.
You Must Have Government-Approved Coverage or be a Member of a Healshare Plan
If you aren’t a member of a health share plan or covered by Medicare or an employer, you must sign up for a plan that has been approved by the federal government. These plans are designated as Bronze, Silver, Gold and Platinum. To learn more about these new plans and what they cover, visit the Covered Benefits page.
How to Avoid Rising Premiums
The Affordable Care Act has made health insurance much more expensive for most individuals, except those who qualify for premium assistance. Benefits available under approved plans, also known as the “10 Essential Benefits,” are much more generous than most people previously chose to carry. Young people are subsidizing premiums for older people, so their premiums have gone up even more. Read more on our Rates and Underwriting page.
To buffer these increases, we recommend investing in your HSA in order to lower your taxes; having us re-shop your coverage every year, and consider a healthshare plan as an alternative to an Obamacare plan.
The law contains new rules that unfortunately make health insurance more expensive for most individuals, unless you qualify for premium assistance. Benefits available under approved plans, also known as the “10 Essential Benefits,” are much more generous than most people previously chose to carry. Young people are subsidizing premiums for older people, so their premiums have gone up even more. Read more on our Rates and Underwriting page.
Who Qualifies for Subsidies and Tax Credits
Individuals and families who earn less than 400 percent of the federal poverty level qualify for tax credits to help pay for health insurance. This is on a sliding scale, with greater subsidies available to those with lower incomes. Contributing to an HSA will lower your adjusted gross income, and may actually enable you to qualify for a larger subsidy.
To learn more about how this works and whether you qualify, visit the Premium Subsidy page.
Guaranteed Acceptance: When You Can Enroll
If you have a pre-existing health condition that has prevented you from being approved for health insurance, you can no longer be denied health coverage as all ACA plans are guaranteed-issue. Everyone is accepted, including those with challenging health problems such as substance abuse, mental health issues, organ failure, or even a terminal illness.
You can only enroll during the Open Enrollment period starting November 1, 2016 until January 31, 2017. -- or before then if you qualify for a Special Enrollment Period. Citizens of AZ and NV have options to sign up year-round. To learn about how to qualify for a Special Enrollment Period, visit our page here.
We have much more information about Guaranteed Acceptance and pre-existing conditions on our Guaranteed Acceptance page. If you cannot currently enroll, you can get an inexpensive short-term plan at any time, but you will need to qualify medically.
Alternative Health Coverage Options
Coverage options are always available, even if you don’t qualify for a special enrollment period or you don’t want to sign up for an ACA health plan.
If you are in good health, you may want to consider a healthshare plan. These are faith-based plans with much lower monthly contributions. If you are a member of this type of plan, you are exempt from having to carry health insurance.
Short-term plans can cover you just one day after you enroll, and you can choose coverage from one to eleven months (varies by state).
Health Insurance for Small Businesses
Health care reform is causing small business owners to change the way in which they operate—specifically, the number of employees they employ and the hours they work. Many small business owners are facing hard decisions in order to survive the high premiums and penalties enforced by Obamacare.
The Small Business Health Options Program (SHOP) Marketplace is a tool accessible to all small-business owners with 50 or less full-time employees. In order for small-business owners to utilize SHOP, they must offer coverage to all full-time employees.
Despite the recent extension on fines aimed at business owners who do not offer health coverage for their full-time employees, hundreds of employers are choosing to reduce employee hours in anticipation of penalties.
Learn how to cover your small business on our Small Business FAQ page.
How to Lower Your Costs
This new law is creating tremendous changes in the way that health care is paid for and regulated. It is a wonderful opportunity for many people to obtain health insurance who may have faced obstacles in the past. But it is also an extremely expensive exercise in government control and regulation, and will make health care and health insurance even more expensive for millions of Americans.
We believe that the biggest problem with our health care system is soaring costs. The only way to put the brakes on health care inflation is with policies that increase consumer involvement, price transparency and free market competition. Once prices are posted in doctor’s offices and on hospital websites, we’ll know we have a functioning market.
If you qualify for subsidies, your costs may be quite low. If you don’t, we can help. Either by finding the carrier and plan offering the best options today - and then re-shopping it every year. Or by helping you enroll in a healthshare plan, if you feel like that is a good option for you.
We also believe in making sense out of today’s health insurance options and alternatives. We have made it our mission to remove the confusion surrounding health care and make it easy for our clients to get the best coverage possible—and save money at the same time. If you would like to explore your options, set up a time to talk to one of our Personal Benefits Consultants today by calling 800-913-0172.