Open enrollment begins on November 1st and will continue until January 15th.
***After Open Enrollment ends (January 15th), you can only obtain an ACA compliant plan with a qualifying event.
INSURANCE PLAN UPDATE…The new health insurance kid on the block is a company called OSCAR. It’s an EPO and now available in AZ, NY, NJ, Cleveland, Columbus, FL, Memphis, Nashville, Austin, San Antonio, LA, Orange Cty and San Francisco. In So CA, UCLA accepts the OSCAR plan. OSCAR is proactive on promoting wellness and using technology. Need to Skype a Doctor in the middle of the night? No problem and no charge with OSCAR!
So What Is The Affordable Care Act (Obamacare, HEALTHCARE.GOV, Covered CA, etc.)?
The Affordable Care Act (ACA), affectionately known as Obamacare is our current health care reform law in America. It was signed into federal law by President Obama on March 23, 2010. No matter what you call it, or what political side of the fence you are on, it’s important that you know what it can do for you and how to avoid some of the pitfalls we’ve seen.
…it originally was put into place to provide more Americans with access to affordable quality health insurance. It also gives access to people with pre-existing conditions and allows low-income people under age 65 to be on MediCaid. However, affordability is being debated now because if your Modified Adjusted Gross Income (MAGI – see below for quick calculation) is too high for help with the premium, rates have gone through the roof. Plus, many medical providers are dropping individual and family plans (IFP) plans, left and right. We can help minimize the blow as much as possible with a personalized insurance design. We also work with your tax professionals to make sure you’re minimizing your MAGI to maximize the subsidy or look for alternatives.
And a few more facts that you should know about the ACA:
- Those who make less, pay less: 2019 Federal Poverty Limit Chart (as of 11/2018)
- Health plans must cover maternity, pediatric dental/vision and certain birth control pills
- There are NO lifetime limits on ACA Compliant plans
- All new plans sold on or off the Exchange must include a wide range of new benefits including wellness visits and preventative tests and treatments at NO additional out-of-pocket costs
THINGS YOU NEED TO KNOW…
What is The Exchange?
The exchange is an online marketplace for health insurance. This is where you can go to find and apply for coverage from competing private health care providers. You have the option of buying a plan ON the Exchange or OFF the Exchange (direct with the carrier).
Okay, you’ve heard some of the POSITIVES about the ACA, now we need to let y’all in on a few of the GOTCHAS. There are many but we’ll cover a few.
What is the Metal-Tier System?
This is a way to compare health plans and figure out which is best for you and gives you the most Bang for your Buck! It’s all about how much you’re willing to pay in premiums and how much coverage you need.
Just remember the METALS:
- BRONZE – Insurance pays 60% you pay 40%
- SILVER – Insurance pays 70% you pay 30%
- GOLD – Insurance pays 80% you pay 20%
- PLATINUM – Insurance pays 90% you pay 10%
MAGI – you won’t find anything labeled MAGI on your tax form. For most people, MAGI will be:
- Line 37 on your 1040 tax form (Adjusted Gross Income)
- Plus any un-taxed Social Security and any tax-exempt income (Line 8b)
Check with your tax professional if you want to be 100% sure of your MAGI
AND THEN THERE ARE THE GOTCHAS!
Many Doctors do not accept the new individual and family (IFP) plans or they have aligned with one or two insurance companies only. These networks change daily. You’ll need to check EACH insurance company and sometimes call the Doctors’ offices to confirm.
TIP: If you Doctor doesn’t accept any IFP plans, consider a high-deductible, Bronze, Health Savings Account (HSA) plan. They used to be more affordable than they are now but it’s not what it is, it’s what it does. It allows you to put money away in an account (tax-deductible going in and tax-free coming out when used for qualified medical expenses). You can then use the HSA to pay for those Doctors’ bills.
FEDERAL POVERTY LIMIT (FPL): This is the barometer that the government uses to see if you qualify for help with your premiums and/or benefits. The issue is, if your income falls below certain amounts, you may be pushed into MediCaid (MediCal in CA). Now, if you are ok on Medicaid, then it’s no issue. If you don’t want to be on MediCaid however, you’ll want to be on top of this because it’s easier to get ON to MediCaid than it is to get OFF. We’ve had to go through the ‘appeals’ process for many of our clients to get them off of MediCaid. It’s no problem for us to do this, it’s just part of our customer service. However, many times it takes months to get you completely out of the States’ computer systems. To avoid this mess, your insurance agent should be keeping an eye on this for you. If they aren’t, change the Broker of Record to us and we’ll take care of the making the changes for you! Remember, it doesn’t cost you one extra penny to have us as your advocate 🙂
***IMPORTANT NEWS!! The government has just released the new FPL chart (March 2018). Click here for a pdf: 2019 FEDERAL POVERTY LIMIT CHART.
PENALTY FOR BEING UNINSURED: We know what you’re thinking…President Trump signed an Executive Order eliminating the penalty, right? Well, he and it will be implemented in 2019. Therefore, you may still have 2018 to be concerned about.
The penalty applies if you are without an ACA Compliant plan for more than two (2) months and one (1) day and is assessed on your taxes. However, the penalty DOES NOT apply to people who have one (1) short gap in coverage.
NOTE: There are many exemptions from the penalty available. Check out my blog for tips and hints to help you save money. If you are an expatriate (live outside the country) for most of the year, you may be exempt from the penalty. You must be living outside of the U.S. for a minimum of 330 days within a 12-month period. Additionally, there is no tax penalty who still meet one of the exemption categories of the mandate, such as J1, F1 or M1 visa holders (inbound foreign nationals) and other populations.
HINT – Remember, it is ok to reduce your MAGI by legal means so if you’re close to a plan being unaffordable, consider putting more money into your retirement account. We’ve seen where putting $500 in an IRA saved $2,000 in a penalty. Not bad! Check with your tax professional to see what else you can do to reduce your MAGI.TIP – ARE YOU HEALTHY AND PAYING THROUGH THE NOSE FOR A HIGH DEDUCTIBLE PLAN? Back away from the ledge! There may be some good news for you. You may be able to obtain an exemption to avoid the penalty if you can prove that the ACA Compliant plans are UNAFFORDABLE. There are two components of the rule that you will need: First, is the the lowest cost Bronze ACA Compliant plan available to you (go to your State Exchange or call us). Second, what is your MAGI (see below for calculation – the lower, the better)? Then answer the questions here (PS, unless they pertain to you, skip all the exemption questions): https://www.healthcare.gov/exemptions-tool/#/questions
The ‘Family Glitch’ – Lawd only knows why this was put into place and it hurts SO many people in so many ways! Basically, if one spouse has a job-based plan and that plan is considered “affordable,” and meets the “minimum value” standard, the rest of the family is NOT eligible for a subsidy!
So, what is considered ‘Affordable’ coverage’? Here’s how you can calculate if your employer based plan is affordable or not:
- What is the amount the employee pays toward to the Plan (monthly, bi-monthly, weekly, etc.)? $_________
- Multiply Line #1’s figure to come up with an annual amount = $ _________
- What is the entire family’s tax HOUSEHOLD MAGI for the year? $_________
- Multiply #3 x 9.56% = $__________. If the amount the employee contributes (Line #2) does not exceed 9.56% of the household MAGI (including spouse’s income), the employee’s plan is considered ‘affordable’, not fair but unfortunately affordable. If the amount from Line #2 is MORE than Line #4, then it is considered ‘unaffordable’ and the rest of the family is eligible for a subsidy through the Exchange.
So that means if your spouse and kids work or are on Social Security, their income is counted as HOUSEHOLD income. However, the premium you would pay for dependent coverage at work DOES NOT COUNT as the employee’s required contribution! I know, it doesn’t make much sense. That’s why we call it, the ‘FAMILY GLITCH’!
- Here’s a ‘Family Glitch’ example: Consider a family of five with a household taxable MAGI of $60,000/year. They’re well below the income limits for subsidy eligibility for a family of 4 (see FPL chart). Let’s assume that the working parent’s employer offers a good health insurance plan, and pays most of their employees’ premiums. The employee pays $100/month and the employer pays the rest. That’s just 2% of their income – well under the 9.56% threshold – so the coverage is considered affordable. Wait…there’s more to the story…
The other three (3) members of the family are considered ‘dependents’ and most employers do not contribute toward dependent coverage. Therefore, in this example, if the other 3 family members were to choose a plan through the employer group plan, it would cost them $1,500/month. Now the total payroll deduction for family health insurance is $1,600/month ($100/employee + $1,500/other 3 family members), which is a whopping 32% of their household income. Hold the phone! Here’s the GLITCH…the whole family is still considered to have access to “affordable” employer-sponsored health insurance, because the affordability determination is based solely on what they pay to cover the employee, not the employee plus dependents and/or a spouse. I know, it doesn’t make sense and it doesn’t seem fair but that’s the rule. And if the family does obtain a subsidy, the employer could get penalized.
TIP: It’s very possible the ‘Family Glitch’ only applies to employers with over 50 employees. Why? We have many clients’ that are receiving a subsidy and are offered insurance through their workplace. We have copies of the letter that the employers receive from the Exchanges and it states they should respond if they are an Applicable Large Employer (ALE). That leads us and our clients to believe if the employer is under 50 employees, the Family Glitch would not apply and the family SHOULD be able to legally obtain a subsidy on the Exchanges. We have researched extensively and cannot find this in writing anywhere on the government sites nor has anyone on the Exchanges been able to verify if this is true. In the meantime, many of our clients that work for employer under 50 employees are still comfortable enjoy receiving their subsidies!
TIP: Here’s another glimmer of good news. If the employer purchased a group plan through their State Exchange (CoveredCA in CA), they can EXCLUDE dependents which opens up the door for your dependents to receive a subsidy on the Exchange, even if they are over 50 employees.
This is all just the…
TIP OF THE ICEBERG when it comes to Obamacare!
All pretty confusing, right? We’re sure you have a lot more questions like…
- Have a child turning 26?
- When and how do I apply?
- Do I go On or Off the exchange?
- Will I be penalized for not obtaining health insurance?
- What do I do if I can’t afford my employers’ insurance?
- Can I get help with my premium?
- What happens if my premiums cost too much? What are my options?
- Who can assist me with all of this?
- What is the penalty for not being insured?
That is where we come in!
You know that ole’ saying, “we just don’t know what we don’t know”. The biggest issue nowadays? Most people have no idea what questions to ask. We will help easily guide you to the strategy and plan that is right for you. Or if your current plan is the right one, we’ll let you know that too!
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