(This article was last updated on October 30, 2015)
What is Obamacare? If you’re not sure or you only have a vague idea, then you’ve come to the right place. We want to set the record straight on the Affordable Care Act, starting with the new law’s most important features.
Under the ACA, you can’t be denied health insurance due to a pre-existing condition, and men and women will pay the same rates for the same services. Insurance companies can’t spend more than 20 percent of premiums on overhead costs, and you can’t be dropped from your plan arbitrarily. In short, the ACA holds insurers accountable for their actions and gives you more rights as a consumer. Obamacare also offers improved benefits for all qualified, ACA-compliant health plans. When you purchase a health plan today, you’re guaranteed coverage for:
- Emergency care
- Lab testing
- Maternity care
- Mental health care
- Outpatient services
- Pediatric services
- Prescription drugs
- Preventive care
- Rehabilitative services and care
There are health plans available today that don’t have to adhere to the regulations outlined by the ACA. These plans are considered grandfathered plans, and you’re most likely to find them being offered by employers. Grandfathered coverage existed before March 23, 2010. You can read more about these plans on the federal marketplace website.
Federal and State Marketplaces
One of the biggest changes to the healthcare system has come in the form of newly created marketplaces. There are two types: federal and state. Both types offer the same services. You can use a marketplace to sign up for insurance that’s either subsidized or not. You can also use the marketplaces to find out if you qualify for a government program like Medicaid or CHIP, but you can’t sign up for these programs using the exchange. Instead, you’ll be redirected to the appropriate website for those specific applications.
As of now, just 13 states and the District of Columbia manage their own health insurance exchange sites. The remaining states redirect residents to the federally administered marketplace or have a hybrid system. Regardless of where you live, you can take advantage of federal subsidies available through the marketplace to make health insurance more affordable.
Advance Premium Tax Credits
The real advantage to using the marketplace is that you can get financial assistance to lower the cost of monthly premiums. Subsidies, also known as advance premium tax credits, make it possible for low- to middle-income people to pay for health insurance. The amount that you receive in subsidies is based on your proximity to the federal poverty line. You can earn between 100 and 400 percent of the FPL and qualify for assistance. During the 2015 enrollment season, about 87 percent of people who signed up for health insurance on the federal marketplace qualified for a subsidy, and the average subsidy brought premiums down to around $101 per month.
Deadlines and Penalties
Under the ACA, you only have a set amount of time each year to sign up for health insurance. Outside of this period, you’ll be assessed a fee known as the individual shared responsibility payment. In order for Obamacare to work, people need to participate. In this case, “participate” simply means that you have to have health insurance that meets the minimum essential coverage requirement.
The enrollment period lasts for about three months each year beginning in the fall. In 2016, you have from Nov. 1, 2015 through Jan. 31, 2016 to sign up. This deadline applies to anyone who wants to sign up for coverage using a marketplace, a private broker or an insurance company directly. If you enroll in health insurance through your job, then you’ll follow your company’s enrollment guidelines, which may differ from the national sign-up period.
This year marked the first year that taxes were assessed against people without insurance, and the fees were relatively small. Unfortunately for those who don’t buy insurance, the fee increases as follows over the next few years:
- When you file your taxes for 2015, you’ll owe the greater of $325 per adult or 2 percent of your household’s taxable income.
- When you file your taxes in 2017 for 2016, your fee will be the greater of $695 per adult or 2.5 percent of your household’s taxable income.
- Every year after 2016, the fee increases with inflation.
The fee is prorated based on the number of months that you didn’t have coverage for the year, minus three months. In other words, you need to have health insurance for at least nine months each year in order to avoid the penalty.
Most people will have to have health insurance under the new law, but there are some exceptions. In the following cases, for example, you won’t have to enroll in a plan and won’t be charged the fee for non-compliance:
- Your employer-sponsored coverage is too expensive.
- You participate in a recognized health care sharing ministry.
- You’re incarcerated or a non-legal resident.
This list is not exhaustive, so check with the marketplace to see if you meet other conditions for avoiding the penalty fee. In addition to exemptions for things like religious preference and incarceration, some people will be exempted from the individual mandate due to hardship, which includes issues like:
- Being homeless
- Filing for bankruptcy
- Experiencing a natural disaster
- Having your insurance canceled
If you qualify for an exemption to the mandate or you think you might, make sure to apply. Many of the exemptions can only be applied for during tax season. The federal marketplace offers links to the appropriate forms for filing for an exemption.
Special Enrollment Periods
Outside of open enrollment, the only way to sign up for health insurance on a state or federal marketplace is to qualify for a special enrollment period. Just as employers offer a window of time to enroll in or modify your coverage if you have a baby or get married, the government allows people to change their health plans or sign up for new ones if they experience a qualifying life event such as:
- Marriage or childbirth
- Losing existing coverage
- Becoming a citizen
There are other qualifying life events that may enable you to sign up for marketplace coverage outside of open enrollment. The only way to know for sure is to apply. You only have 60 days from the date of the event to enroll. If you don’t sign up within your approved window, then you’ll have to pay the penalty fee for not getting coverage.
(This article was last updated on October 10, 2014)
Americans have been inundated with information about the Affordable Care Act, or Obamacare, since President Obama signed it into law on March 23, 2010. Most of the information disseminated in the media regarding the details of Obamacare is very confusing. Often this data either contains false information or too little accurate information and is almost seems to be purposefully vague so that an American ends the TV broadcast or finishes reading the news article with as little information and understanding of what the law now requires of them as when they started watching the news show or reading the article. Another obvious trend is that there is a focus with TV news reporting to really sensationalize the stories that are most polarizing, or put another way, angers people on both the “Right” and the “Left”. Why would so many news organizations do this? Simple, when people are angry about something they don’t really understand, they keep coming back for more. So that means more TV viewers, more online article readers and so on. The average article on a top 10 news website will have approximately 200 comments left by readers if it is an average story and not connected to a hot button issue. News stories on Obamacare typically see more than 1,000 comments, with some articles having more than 10,000 comments.
Explaining The Basics About Obamacare – Facts About The Affordable Care Act
We are going to give you the information that you need to know about what the Affordable Care Act is, how it affects you and your family, how do you obtain health insurance that is either subsidized or not subsidized and finally what it will cost and the repercussions for violating the law in plain and simple terms.
Here is a quick overview of the Obamacare requirements that you must follow. All of this information is further explained in very clear terms in this article.
- If you do not have health insurance from your employer and do not qualify for an exemption, you must get health insurance.
- Your health insurance must comply with the law.
- Depending on the state that you live in, you will either get health insurance through the federal government on Healthcare.gov, through a private insurance company on your own or through your state’s marketplace exchange website
- You have a set period of time every year to get health insurance or change your health insurance. The period of time for 2015 is November 15, 2014 to February 15, 2015.
- If you did not get health insurance by the March 31, 2014 deadline you will be taxed when you pay your 2014 taxes. You will be taxed again for not having insurance in 2015 as well.
- The tax is assessed for every month in the year that you are without insurance and not approved for an exemption. For instance, if you are without insurance for half of the year, you will be assessed half of the total tax penalty.
- If you are not insured for three months or less you will not be taxed.
- The tax for 2015 is 2% of your yearly household income or $325.00 per uninsured adult and $162.50 per uninsured child in the family.
- The law requires that all health insurance plans offer certain protections and basic requirements.
How Did The Affordable Care Act Become A Law?
President Obama ran his election with the promise that he would make healthcare better in the United States. We should note that despite many problems and constant attempts that have been made to repeal the law, at the close of the 2014 open enrollment period, more than 8 million Americans obtained healthcare on either the state or federal Marketplaces. Before the law was passed, the country was already in the midst of a recession that was started by the housing crisis and Americans needed a break. In March 2010, a little over one year after being sworn into office, President Obama made Obamacare a law, which was formally titled the Patient Protection and Affordable Care Act.
Many people took issue with different sections and requirements of Obamacare and many federal lawsuits were filed challenging whether President Obama could require every American citizen to get health insurance Ultimately, in June 2012 the Supreme Court of the United States ruled on two lawsuits and decided that the law could penalize people who did not follow the law with a tax and that the law could not require the states to expand the eligibility requirements of Medicaid.
Does everyone have to get health insurance under Obamacare?
The short answer is that yes, almost everyone must make sure that they have health insurance either through their job or that they have signed up for health insurance on their own by the deadline each year. In 2015, the deadline to enroll in health insurance is February 15, 2014. The deadlines are different for people who can get Medicare because they are over the age of 65 years old, receive Social Security or Railroad Retirement benefits or have a disease that qualifies them for Medicare. The deadline to get a Medicare plan is December 7th.
There are certain groups of people who do not have to get health insurance under the law. If think that you fit into one of these groups of people you will need to fill out an application for an exemption from the law and will need to wait for the government to review your situation and approve the exemption in order to know that you do not need to get health insurance. These groups of people are:
- Native Americans who get insurance through a government program
- A member of a healthcare sharing ministry that the government recognizes
- A member of a religious group that does not believe in health insurance (government must recognizes this religious group)
- A person who is in prison
- A person who is not a citizen of the United States
- A person who has only been without insurance for three months and intend to get insurance again before the three months is up
- A person who is under 26 years old and is still on their parent’s insurance
- A person who does not have to file a Federal Income Tax Return because they make under $10,150.00 a year
- If the lowest-price insurance policy available is more than 8% of your household income (To calculate: take your annual income and multiply it by .08, if the resulting number is less than the policy that you qualify for then you do not have to sign up for insurance)
- You applied for and was approved for a hardship exemption
There are a lot of examples of a “hardship”, which is the last group of people that do not have to get health insurance listed above. Here are a few examples of a hardship that may get you out of having to get health insurance.
- You are homeless
- You were evicted or will be evicted from your home or are going through foreclosure
- You are a victim of domestic violence
- You had a recent death of a close family member
- There was a human or natural disaster that damaged your property
- You filed bankruptcy in the last 6 months
- You have medical expenses from the last 24 months that you can’t afford to pay
- You are caring for a family member that costs a lot of money
- Your state did not expand the eligibility to get Medicaid
- You believe all of the insurance plans offered to you are too expensive
How Is Obamacare Going To Effect You in 2015?
In very simple terms, Obamacare will effect you and your family because you must have and pay for health insurance. The good thing is that every health insurance company who wants to be in business must offer their customers plans that cover certain things. This is a good thing because you can now know that your money is paying for a lot more coverage than it used to.
Here are some things that the law now requires of your health insurance company and your health insurance plan:
- You cannot be denied health coverage because you have a pre-existing health condition
- A health insurance company cannot cancel your plan just because you got sick
- A health insurance company cannot deny you coverage just because you already had a certain amount of claims submitted in a year or in your lifetime
- Health insurance companies cannot discriminate against you or raise your rates because of your gender, race, financial situation, medical history or a disability.
In addition to the above requirements, the Obamacare law also told insurance companies that they must pay for certain claims for every customer. These claims are referred to the minimum essential benefits and are:
- Ambulatory Patient Services, which means any healthcare that you receive outside of an inpatient hospital stay for things like treatments, rehab, minor surgeries, x-rays, biopsies and tests that would be done at a doctor’s office, an urgent care, clinic or outpatient hospital center.
- Emergency room services in a hospital
- Inpatient Hospital Stay and Services
- Maternity and newborn care services
- Mental health and substance use services and treatments
- Prescription drug coverage
- Rehabilitative and habilitative services and devices, which means therapies that are needed to regain a function or skill that was lost due to something like a stroke or that should be there but isn’t because of a disease like autism.
- Lab work
- Services to prevent, manage and learn about chronic diseases
- Oral and vision care services for children
How Do You Enroll For A Healthcare Plan Approved By Obamacare?
If you are looking for different insurance, lost your old insurance coverage at some point in time in 2014 and did not pick up a new plan or never had insurance before, you will need to enroll in a plan for the 2015 calendar year during the 2015 open enrollment period, which starts on November 15, 2014 and closes on February 15, 2015.
There are a couple different ways that you can sign up for a health insurance policy. You can either go to Healthcare.gov, which is the government’s official website for Obamacare and is the place where you can apply for a plan through the Marketplace. Every policy offered on the Marketplace, on Healthcare.gov, will meet all of the requirements of the law.
If you live in a state that has set up its own State Exchange website, which would be similar to Healthcare.gov, you’ll have to work directly with your state and its approved insurance plans and companies to get insurance. The following states have set up their own State Exchange programs and websites:
States With Individual Healthcare Exchanges:
- Washington D.C.
- New Mexico
- New York
- Rhode Island
If you do not want to sign up for health insurance on the Internet, you can call the toll free number listed on Healthcare.gov and speak to a representative who can help you fill out your application. These representatives are probably not licensed insurance brokers so they cannot give you advice on the different policies available to you.
Another way to sign up for health insurance is to connect with a licensed insurance agent or broker who can help you sign up for a health insurance plan on the Marketplace or with a private insurance company and can give you advice about the protections offered. You can connect with a licensed insurance broker through this website either by calling one of the toll-free numbers published on the website or by using the Get Assurance™ agent communication tool .
If you are comfortable shopping, researching and applying for health insurance online, you can also use a website like this one, which will provide you information on all of the plans available in your geographic region that meet your criteria.
What Will A Healthcare Plan Cost Me?
Now let’s get down to the real issue for most families: what does an insurance policy under Obamacare cost my family and I?
One very important reason that many families were uninsured and may continue to be uninsured, even though the law now requires everyone to have health insurance, is money. When a individual or family is faced with the hard decision of spending their money on food, housing or an insurance policy, it is oftentimes the insurance coverage that is put off until later. The Obama Administration realized that many families simply could not afford insurance coverage and so they wrote two provisions into the law to help ease that burden.
- First, the government has allocated money to help people who meet certain income requirements pay their insurance bill every month. This help will be continuous until the person or family makes enough money to pay the bill themselves.
- The ACA also provides for a tax credit for individuals and families that make under a certain amount of money each year as well. This tax credit is applied to the person’s federal income taxes for that year and is designed to reimburse the individual or family for their insurance-related out-of-pocket costs for things such as deductibles, co-pays and coinsurance payments.
- The law is also designed to help individuals or families that cannot afford healthcare coverage is to provide different levels of coverage so that the consumer has the choice of how much they want to spend.
The first thing we will outline is what it takes to get federal money to help you pay your insurance bill every month. This concept is commonly referred to as a federal subsidy. When determining whether a person is eligible for Medicaid, or public insurance, Obamacare has recommended that all of the states expand their requirements to determine eligibility in the Medicaid program to include all people that make 133% or under the federal poverty line (due to the way that the program actually calculates income, this rate is actually 138% of the FPL). This statistic is confusing but generally equates to approximately $16,105 a year for a single person or $32,913 for a family of four. The annual income levels change as the amount of people in the family change.
This concept is similar to the one used to determine whether a family or individual can receive financial help from the federal government to pay their monthly insurance bill.
The Affordable Care Act (Obamacare) says that any person who makes between 100% and 400% of the federal poverty level may receive financial assistance to pay for healthcare. The reason that the starting level is 100% is because anyone under that point, meaning that they earn less money, will definitely be eligible for Medicaid. Although Obamacare recommends that the states change their rules to include people that make under the 133% mark, which equals $16,105 a year, states are not required to make this change and any state that is still working with the old rules will allow people who make 100% of the poverty line into Medicaid, which equals $11,670 a year in 2015. This basically means that anyone who makes under 100% mark or $11,670 will get Medicaid and will not need help from the federal government to pay their insurance bill.
The most that a person can make in order to receive financial help from the federal government is 400% of the federal poverty line. The following is a simple chart to follow to determine whether your income and family size is within the range that may allow you to receive federal assistance to pay your insurance bill. Please note that these ranges do not apply for the States of Hawaii and Alaska. The income requirements to fit within this range of the federal poverty line for both Hawaii and Alaska are higher than the other states, which means that you have to make more money to fit within these ranges if you live in those two states.
In order to apply for financial help, a person must fill out an application through Obamacare for insurance. This can either be done directly on Healthcare.gov or you can work with a licensed insurance broker who will help you fill out all of the paperwork. In the near future, people will also be able to fill out an applicable for insurance through a participating insurance brokerage company’s website instead of only on Healthcare.gov. This technology is still being developed though.
After you submit your application, which will ask you questions like what is your family size and how much money do you expect to make this year, you will presented with all of your insurance options, their total costs and how much money the federal government will chip in every month. It is important to be as truthful as possible when quoting your annual income because if your tax return says that you made more money than you quoted on your application, you will be penalized for the money that the government paid towards your policy that it probably should not have had you been truthful about how much money you make.
In order to make the process of managing your insurance bill every month a little easier, the federal government will send your insurance company their part of the bill directly each month and then the insurance company will bill you directly for the remainder.
The second type of federal help that is available under the ACA is the tax credit. This credit is available to people who enroll in a silver-level healthcare plan and who make under 250% of the federal poverty level. The below chart reflects those income qualifications. As previously explained, the tax credit is designed to reimburse families for the insurance-related out-of-pocket costs tendered throughout the year for things such as deductibles, co-pays or coinsurance payments.
The other way that the Affordable Care Act helps make health insurance plans more affordable to families is that any program, whether through the federal government or a particular state, must offer participants multiple levels of coverage that vary in price. These different levels of coverage are called the bronze, silver, gold and platinum levels. The bronze level would cost the least and would offer the least coverage and the highest deductibles and co-pays, the silver and gold levels are in the middle and the platinum level would cost the most but would also offer the most coverage and the best coverage in terms of deductibles and co-pays.
The benefit of offering different coverage levels is that a person on a certain budget may be able to get a slightly better insurance policy after the federal subsidy is applied or they may opt to save their money and stick with a lesser plan to keep more money in their pocket.
What Happens If I Do Not Get Health Insurance?
Now that you know why you need insurance, what your insurance policy must offer you, what it will cost to get insurance and how to receive financial help, you need to understand the consequences of not obeying the law.
One of the issues debated by the Supreme Court in 2012 was whether or not the government could penalize people for not getting health insurance. The Supreme Court decided that they could tax people for not following the law. Starting in 2014, any person who does not have health insurance for any period of time beyond three months will be taxed when they file their annual, personal income tax returns.
If you do not have insurance for three months or less, you will not be taxed because the coverage gap is just considered temporary. If you do not have insurance for four months out of the entire year, you will only be taxed for four months of disobeying the law, which is a portion of the maximum tax that could be given under Obamacare. This amount increases as the length of time that you remain uninsured increases.
The Obamacare Act understands that many people may be hesitant to get insurance and to comply with a law that is so new to them, which is why the tax for violating the law for the first year (2014) is the smallest tax. In later years though, for instance this year, the tax will increase for people who choose not to get insurance.
Below is a chart that indicates the deadline to get insurance, per year and the associated tax that will be imposed if you choose not to get insurance.
|Year||Deadline to get insurance||Tax penalty|
|2014||March 31, 2014||1% of yearly household income or $95.00 per adult and $47.50 per child under 18 that does not have insurance, whichever is higher. The penalty for this year cannot exceed $285.00|
|2015||February 15, 2015||2% of yearly household income or $325.00 per person that does not have insurance, whichever is higher|
|2016||February 15, 2016||2.5% of yearly household income or $695.00 per person that does not have insurance, whichever is higher|
The term “yearly household income” may sound vague, but to determine that amount you only need to consider income above the tax-filing threshold. The tax-filing threshold is approximately $10,000. This means you should subtract $10,000 from your annual income to determine your household income.