Hold on, take a couple deep breaths. It’s going to be alright.
Sure there is enough uncertainty surrounding the impact of health care reform to fill a Costco sized jar of pickles, but that doesn’t mean we don’t know anything.
Let’s take a look at what we know so far and what you can expect as a result.
What Are Your Options?
Well... That’s a great questions.
If you like to be prepared and want to get things taken care of before the big deadline, you can buy a health insurance plan anytime you want.
Disclaimer: you will have to be “approved” for that health insurance policy through a process called medical underwriting.
If you are so excited to be a part of Obamacare, you will have to wait until October 1, 2013 to formally apply.
Disclaimer: You will only have a specific time period in which you can apply, and could potentially pay a heck of alot more than you would now.
Who Can Help Me Buy a Plan?
Another great question.
Right now it looks like an independent agent or broker will be able to assist you buying a plan in or out of the marketplace.
That’s good because independent agents and brokers work for you. They do not answer to one insurance company and can provide you with the most comprehensive offering of options.
Why Did You Say “Right Now?”
The federal government has told us, after completing a 3-4 hour registration process, we will be able to “sell,” I prefer the term assist, you plans in the marketplace.
What they haven’t told us is how much they plan to pay us...
UPDATE: Ohio health insurance companies will be paying agents and brokers the same commission for plans sold inside or out of the marketplace. Basically, we can help you with any and all insurance options under the Affordable Care Act.
You Greedy Insurance...
Before you reach for your nails and cross, hold on a second.
You have a job. A job that you get paid a specific amount of money to do. If you weren’t paid enough, you would be unable to do your job.
Insurance agents are no different.
I pride myself on offering you the best level of services, advice and information possible. If the government decides to devalue those services, it will be very difficult for me and other experiences agents to spend the time helping you buy a plan in the marketplace.
Who Else Can Help Then?
If you require assistance, which you probably will, and brokers are unable to provide it, you would then have to turn to the government's Walmart approach to replacing us and use one of their “Navigators.”
Are They Taking Us Hiking, What’s a Navigator?
A navigator is a person who will be sitting on the other end of an 800 number waiting to navigate you to the best health insurance option.
It's very likely these people will be very inexperienced in dealing with health insurance. Additionally, they will have very little incentive to provide anything more than basic assistance.
Buying a Plan Outside the Marketplace
If you prefer to sidestep the potential circus the Affordable Care Act could turn into, than you are better off trying to secure coverage before the big show starts.
By doing so you will lock in a rate that is good for 12 months (with most companies) from your effective date. This might be in your best interest if rates do indeed increase by the estimated 25-50 percent.
Doing so will not permanently protect you from participating in the health care reform cycle, instead will only delay your involvement.
Buying a Plan From the Marketplace
If you think Obamacare is the greatest thing since sliced bread, than you might be interested in standing in an iPhone like release line to sign up for coverage the radical legislation will be providing.
I’m kidding about the line, there won’t be one. You will do everything online.
Now the line of paperwork is another story. It’s hard to say how the federal government will handle the administration duties of this new enrollment process.
Buying from the marketplace is the only way you can potentially qualify for tax credits and subsidies to help make your coverage more affordable.
What is the Tax Penalty?
This is the amount of money you will be required to pay if you are an eligible person who chooses to go without health insurance.
You will pay a specific dollar amount or percentage of your income, whichever is greater. Here’s how it breaks down over the next few years:
- 2014 - $95 or 1% of income above tax filing threshold ($9,500 in 2011)
- 2015 - $325 or 2% of income above tax filing threshold
- 2016 - $695 or 2.5% of income above tax filing threshold
Note: Penalty for dependents under age 18 is one half of the individual amount.
- 2014 - $285 or 1% of income above tax filing threshold
- 2015 - $975 or 2% of income above tax filing threshold
- 2016 - $2085 or 2.5% of income above tax filing threshold
Are You an Eligible Person?
Probably. Unless one of the following applies:
- Employees whose individual insurance costs would exceed 8 percent of his or her household income
- Individuals who earn below the minimum filing amount. In 2011, that amount was $9,500 for a single person under age 65, and $19,000 for a married person joint filing. By 2014, those numbers will have increased with inflation.
- Anyone who has suffered a hardship preventing them from obtaining insurance
- Native American tribes
- Individuals will brief coverage gaps
- Certain religious groups such as the Anabaptist, Amish, Mennonite, and Hutterite
Isn’t Someone Suppose to Help Pick-up the Check?
You are 100 percent correct.
If you meet certain income requirements, federal tax credits and subsidies will help offset the cost of your newly acquired health insurance.
Here’s a breakdown of those requirements:
- Individual with annual income of $10,830 to $43,336
- Family of 2 with annual income of $14,470 to $58,280
- Family of 3 with annual income of $18,310 to $73,240
- Family of 4 with annual income of $22,050 to $88,200
The Bottom Line
You are going to need to buy health insurance next year, or pay a penalty if you don’t. You are going to want to find someone you trust to help you “navigate” your options (pun intended).
If not, you could find yourself stuck with a plan for an entire year that doesn’t meet your needs.
If You Could Do Me One Favor...
If you have a friend who is uninsured or would simply benefit from this article, please share it with them. That way you can always remind them about the time you helped them with their health insurance and how they will forever be indebted to you.