Health Insurance for Individuals
Why Do You Need Health Insurance?
Signed into law in March 2010, the Affordable Care Act (ACA) is the most sweeping health care legislation passed by Congress since the adoption of Medicare in the 1960s. The precise impact of the Affordable Care Act (ACA) will continue to be shaped by new rules and guidance developed by the federal agencies in support of the law.
Some provisions of the ACA, including insurance market reforms such as increased access for dependents and the prohibition of lifetime limits on coverage, have impacted health care benefits since soon after adoption of the law. Other provisions, such as requiring all Americans to obtain health care coverage and the implementation of insurance exchanges, took effect in 2014.
Today, health care costs are high, and getting higher. Who will pay your bills if you have a serious accident or a major illness? You buy health insurance for the same reason you buy other kinds of insurance; to protect yourself financially. With health insurance, you protect yourself and your family in case you need medical care that could be very expensive. You can’t predict what your medical bills will be. In a good year, your costs may be low. But if you become ill, your bills could be very high. If you have insurance, many of your costs are covered.
At BIG. we are committed to complying with health care law and to helping you understand its impact. Please call our agency. We can help you determine if you are eligible for lower costs on your health insurance. We are licensed to offer plans through the Marketplace or directly through the insurance company.
Affordable Care Act
The Affordable Care Act (ACA), also know as “Obamacare” was signed into law in 2010. Some people refer to the Affordable Health Care Act as “Obamacare” because it was signed into law by President Barack Obama. The Obamacare bill is the first substantial healthcare reform plan since 1965, and it’s aimed at making health care more affordable for American citizens through regulation and federal subsidies.
A Few Key Points of the Obamacare Bill:
The Obamacare act is a 955-page document that establishes a lot of rules and regulations for the insurance industry, and attempts to make sure all Americans can get an affordable healthcare plan. These are a few of the key points from this law:
- No-one can be excluded from getting insurance
- Everyone has to get insurance coverage or face tax penalties
- The ACA has established state and Federal administered Health Insurance Marketplaces where individuals, families and small businesses can shop for health insurance
- The bill expands low-income care through expansions to Medicaid and federal health insurance subsidies
Clearing Up Some Misconceptions about Obamacare:
Some news sources have run inaccurate information about Obamacare, so these are a few of the most common misconceptions about the law:
- Obamacare is not a healthcare plan; it’s a series of rules and regulations for the insurance industry, combined with expansions of federal programs and federal subsidies
- The Obamacare bill does not give health-care subsidies to undocumented immigrants
Ultimately, Obamacare attempts to ensure that people who need access to a good healthcare plan can get it. The Affordable Health Care Act imposes regulations on the insurance industry that will end exclusionary tactics, reduce premiums and hopefully improve overall access to health care. The bulk of these changes have either already begun, or will roll out through 2014.
Health Insurance Marketplace
The Health Insurance Marketplaces, also called health exchanges, are organizations set up to facilitate the purchase of health insurance in each state in accordance with the Affordable Care Act (ACA). Marketplaces provide a set of government-regulated and standardized health care plans from which individuals may purchase health insurance policies eligible for federal subsidies.
Important: Marketplace Open Enrollment ended March 31. You can still buy a Marketplace health plan only if you qualify for a special enrollment period. You can apply for Medicaid and CHIP any time. Find out if you qualify for a Special Enrollment Period or Medicaid and CHIP. Open Enrollment for 2015 coverage starts November 15, 2014.
What kind of Insurance is on the Marketplace?
- Private health insurance. Plans cover essential health benefits, pre-existing conditions, and preventive care.
- Lower costs based on your household size and income. You can preview plans available in your area right now, with prices based on your income and household size. Most people who apply will qualify for lower costs.
Open Enrollment: For coverage starting in 2015, the proposed Open Enrollment Period is November 15, 2014-February 15, 2015. Individuals may also qualify for Special Enrollment Periods outside of Open Enrollment if they experience certain events. (See Special Enrollment Period and Qualifying Life Event)
Special Enrollment Period: A time outside of the open enrollment period during which you and your family have a right to sign up for job-based health coverage. Job-based plans must provide a special enrollment period of 30 days following certain life events that involve a change in family status (for example, marriage or birth of a child) or loss of other job-based health coverage.
Qualifying Life Event: A change in your life that can make you eligible for a Special Enrollment Period to enroll in health coverage. Examples of qualifying life events are moving to a new state, certain changes in your income, and changes in your family size (for example, if you marry, divorce, or have a baby).
Essential Benefits and Preventative Care
The Affordable Care Act ensures health plans offered in the individual and small group markets, both inside and outside of the Health Insurance Marketplace, offer a comprehensive package of items and services, known as essential health benefits.
Essential health benefits must include items and services within at least the following 10 categories:
- Outpatient services
- Emergency services
- Maternity and newborn care
- Mental health and substance use disorder services, including behavioral health treatment
- Prescription drugs
- Rehabilitative services and devices
- Laboratory services
- Preventive and wellness services and chronic disease management
- Pediatric services, including oral and vision care.
The Penalty in 2014 and beyond
The penalty in 2014 is calculated one of 2 ways. If you or your dependents don’t have insurance that qualifies as minimum essential coverage you’ll pay whichever of these amounts is higher:
- 1% of your yearly household income. (Only the amount of income above the tax filing threshold, $10,150 for an individual, is used to calculate the penalty.) The maximum penalty is the national average premium for a bronze plan.
- $95 per person for the year ($47.50 per child under 18). The maximum penalty per family using this method is $285.
The way the penalty is calculated, a single adult with household income below $19,650 would pay the $95 flat rate. A single adult with household income above $19,650 would pay an amount based on the 1% rate. (If income is below $10,150, no penalty is owed.)
The penalty increases every year. In 2015 it’s 2% of income or $325 per person. In 2016 and later years it’s 2.5% of income or $695 per person. After that it’s adjusted for inflation.
If you’re uninsured for just part of the year, 1/12 of the yearly penalty applies to each month you’re uninsured. If you’re uninsured for less than 3 months, you don’t have to make a payment.
You’ll pay the fee on your 2014 federal income tax return. Most people will file this return in 2015.
Minimum Essential Coverage
The type of coverage an individual needs to have to meet the individual responsibility requirement under the Affordable Care Act. This includes individual market policies, job-based coverage, Medicare, Medicaid, CHIP, TRICARE and certain other coverage.
Lower Health Insurance Costs
You could be eligible for lower costs on health coverage based on your income and household size. However, you generally won’t qualify if your estimated 2014 income is above:
- $45,960 for an individual
- $94,200 for a family of 4
The lower your income, the lower your costs. If your income is close to these limits your savings will be less.
- If you’re not eligible for lower costs because your income is too high, you can still buy health coverage through the Marketplace.
- You can also get insurance outside the Marketplace–through a private insurance company, an online insurance seller, or an agent or broker.