If you have present individual insurance, you may be able to keep it, if you have been continuously insured since before March 23, 2010, and have not made substantial changes to your policy. In this case, your plan is said to be “grandfathered” and you can keep the plan even after the Affordable Care Act is fully implemented. If your plan is not grandfathered, it will end on December 31, 2013.
will be required to purchase medical insurance starting in January
1, 2014. This is called the Individual Mandate. Those not enrolling
will pay a penalty along with their income taxes annually to the
Internal Revenue Service, beginning in 2015. The penalty for not
participating in 2014 will be the greater of 1% of Modified Adjusted
Gross Income or $95, whichever is greater. This will increase each
year, until it is the greater of 2% or $295.
Premium Assistance/Tax Subsidies
If your income is within the government-specified range, you may qualify for “premium assistance.” You can use Covered California’s calculator to help determine if you qualify for premium assistance.
Here are some important facts to know about Premium Assistance.
• Paid Directly to Insurance Companies. Each month, the government will pay the premium assistance directly to the insurance company.
• Premium Assistance - Now or Later. You will be able to choose how much premium assistance to accept for your monthly premiums. You can choose to take 100% of the assistance, half, none or any percentage that you would like.
• Qualifying Year. The amount of premium assistance is calculated on 2012 tax returns, but it is reconciled to your 2014 income at tax time.
• Tax Return Reconciliation. Each year, when you complete your tax return, you will be reconciling the premium assistance you received with the amount you were allowed according to your actual earnings for that year. If you took more than your earnings allowed, you will owe the difference. If you took less you will receive a tax credit.
• Qualifying. There are three key qualifications for receiving premium assistance. 1) You are not offered insurance by an employer (if spouses and dependents are offered insurance, whether the employer helps with the premium or not, they do not qualify for premium assistance). 2) If your employer offered insurance costs more than 9.5% of your W2 income. 3) Your Modified Adjusted Gross Income (MAGI) income falls within the range below.
Health Insurance Plan Changes
The ACA law mandates changes to benefits and purchasing options for health insurance. The major changes are:
• Individual Mandate. Individuals will be required to purchase medical insurance starting January 1, 2014. The per-person penalty for not participating in 2014 will be the greater of 1% of Modified Adjusted Gross Income or $95, whichever is greater. This will increase each year, until it is the greater of 2.5% or $695, per person.
• Essential Health Benefits. These are health insurance coverage items that are mandated for all individual and family policies.
• Preventative Services. Specific health services focused on prevention are covered at no cost. This list includes services specifically for men, women, and children as well as for age / risk-specific status.
• No annual or lifetime benefit limits. The total amount of financial benefits paid by the insurance company is unlimited.
• Guaranteed Issue. No more health questions on applications, no pre-existing conditions exceptions or waiting periods.
• Open Enrollment. You can only purchase a plan during the enrollment period (Oct-Dec).
• Limited Carriers. To participate, insurance companies must be approved the state entity which offers subsidized coverage. For example, in San Luis Obispo County, only Anthem Blue Cross and Blue Shield participate.
• Limited Network. The metal tier plans network of medical providers is smaller than the previous network for individual and family plans.