The Affordable Care Act is one component of a two-part health reform bill. A marketplace was established for the purpose of comparative shopping for standardized coverage for essential health insurance for individuals and families. Four packages (Bronze, Silver, Gold, and Platinum) are offered, which vary in percentages paid by the plans and deductibles paid by the insured. The Bronze package has the highest deductible and lowest percentage paid by the plan. All health plans include services and / or devices for rehabilitation, prevention and wellness, prescription drugs, pediatrics, mental health, maternity and newborn care, laboratory, hospitalization, emergency, chronic disease, ambulance, and addiction. Federal subsidies are available to help qualifying participants with co-payments, deductibles, and other out-of-pocket expenses. It also made health insurance coverage mandatory, which means that there’s a corresponding penalty for not having health insurance. Open enrollment for the current year is closed, and will not open for next year’s coverage until November 1, 2015.
Qualifying health plans include any individual plan already in place, any Marketplace or job-based plan (including COBRA coverage and plans for retirees), a majority of Medicaid plans (including Children’s Health Insurance Program), Medicare Parts A and C, parental plans for those 25 and under, university coverage for students, and plans that cover veterans or are connected to the Department of Defense. In a nutshell, if you can afford health insurance, but do not have minimum essential coverage, then you must claim a reason for exemption or pay a penalty that will be attached to your federal tax return.
Fees for failing to provide the minimum coverage for you or your family are based on your income and household size. Penalties are applied to those who earn more than the tax filing threshold for their filing status. Currently, fees incurred are 2% of your annual income, with a ceiling of the national average premium for a Bronze package, or $325 per person (half that for each child under the age of 18), with a ceiling of $975, whichever is the higher cost.
Most exemptions for these fees are very specific and are related to health coverage (uninsured for no more than 2 consecutive months of the current year or your state of residence did not expand its Medicaid program for which you would have qualified), or income issues (acceptable plans exceed 8.05% of your household income or your income is not high enough to require filing a tax return). You may also qualify if you are a member of a group that shares a health care ministry or a member of a recognized religious sect that objects to insurance. Incarceration and living abroad also provide exempt status.
Exceptions are also made for personal hardships such as homelessness, eviction or foreclosure, domestic violence victimization, substantial damage to property, bankruptcy, excessive medical bills from previous 24 months of treatment, unexpected increase in household (getting married, having a baby, caring for an elderly or incapacitated family member), moving to a new residence, or your existing health plan is no longer available.
A professional insurance provider should be contacted for more detailed information concerning your particular situation. Even though it would appear to be less expensive to just pay the fees at the end of every year, you or a member of your family will still have to pay for some type of medical care during the year. Aspiring insurance professionals can take our insurance pre-licensing and exam preparation course for more information about the latest industry practices.