The new Obamacare regulations can be a confusing maze to navigate.
Should you set yourself up on Healthcare.gov? We all know how well that site has been working the past few months. When do we need insurance by? What are these penalties you keep hearing about?
Well, I sat down with health insurance agent Amy Kelley, and got the tough questions figured out. In summary, here are 12 things you need to know about Obamacare before 2014.
1. If you currently have health insurance, you should switch your plan right now. If you have a new plan effective date as of 12/21, then you can keep your 2013 rate all the way until December 1, 2014 and avoid the Obamacare rates for one whole year.
2. If you do not switch your current plan now, then you will have to switch to Obamacare or ask an agent about switching to a non-compliant plan in 2014 (more info on non-compliant plans below.)
3. You do NOT have to go to Healthcare.gov to get compliant health insurance. Get with your local agent and he/she can help advise you on the best plan.
4. You DO need to go to Healthcare.gov if you qualify for a subsidy. Many people who think they make too much money actually do qualify, so check before you completely abandon the idea of getting a subsidy.
5. You SHOULD get with an agent to see if non-compliant plans may be a better option for you. You will be subject to a tax penalty, but from an overall cost perspective, this might be a better option for some.
6. There is absolutely NO UNDERWRITING. This is the best part of Obamacare. No underwriting means that you do not have to qualify to get major medical: Everyone qualifies!
7. The IRS plans to pay a subsidy for each individual that qualfies on a monthly basis. This will be paid directly to the insurance company.
EXAMPLE: A family of four’s new health insurance cost is $860 a month. They would get a subsidy per year of $6,720, or $560 month. The only payment the family would need to pay is $300 a month ($860 minus $560) a month.
8. With most plans that are compliant, the prescription drug plan will go into effect AFTER your deductible. Deductible range is from $1,250 all the way up to $6,350.
9. The following are exceptions to not having to pay the tax penalty on Obamacare:
- Religious reasons
- Not lawfully present in the US
- Inability to afford coverage: required contribution toward coverage exceeds 8% of household income.
- Income below 100% of the poverty level
- Hardship waiver obtained
- No coverage for a period of less than 3 months during the year.
10. The TAX PENALTY is on a sliding scale for 3 years:
- 2014: $95.00 per uninsured adult in the household, or 1% of the “modified adjusted gross” income.
- 2015: $325 per uninsured adult in the household, or 2% of the “modified adjusted gross” income.
- 2016: $695 per uninsured adult in the household, or 2.5% of the “modified adjusted gross” income.
- The penalty will be ½ of the amount for individuals under the age of 18
11) All COMPLIANCE plans will have essential health benefits and these benefits include:
- Maternity (no matter what age and no matter if you are male or female)
- Wellness Visits
12. To absolutely AVOID penalties, everyone needs to have a compliant plan by March 31, 2014. Or you can renew your current plan NOW (by December 21, 2013) to keep your plan for an entire year.
A lot of this may still be kind of confusing, which is why it is important that you speak with your insurance agent immediately. It costs you nothing to speak to an agent, so go ahead and get it done!
For further reading: