HEALTHCARE REFORM
AND YOU
The Patient Protection and Affordable Care Act & The Health Care and Education Affordability Reconciliation Act of 2010, together, create the most comprehensive health insurance reform ever under taken in recent history by our Country. Many of the new laws required changes have already been incorporated into company health plans across the country since the effective date in September of 2010. However, there will be many more changes taking place in the months to come, as more guidance is issued by the government to employers, insurancecarriers and individuals. One of the key requirements of the new law beginning in 2014, is the mandate that all U.S. citizens & legal residents either carry health insurance or pay an income tax penalty. While the tax penalty is not too severe in the first year, it becomes progressively more costly each year thereafter.
If you obtaincoverage through an Exchange:
The Exchange will sell insurance policies at certain levels of coverage:
• Bronze level – a medical plan designed to pay 60% of covered medical benefits; • Silver level – a medical plan designed to pay 70% of covered medical benefits; • Gold level – a medical plan designed to pay 80% of covered medical benefits; • Platinum level – a medical plan designed to pay 90% of covered medical benefits; • Catastrophic – available to young adults up to age 30 or those exempt from the individual mandate (additional requirements may apply)
You may only obtain coverage through an Exchange if you are not participating in your employer’s plan.
Penalties for failing to buy coverage
Tax penalties for failing to buy coverageare phased in according to the following schedule.
If you satisfy certain low income thresholds and do not have medical coverage through an employer, or have employer-provided coveragethat is considered “unaffordable” or pays benefits that are below the “Bronze” plan discussed above, there are tax credits available to help you pay the premiums for coverage purchased through the Exchange. The credits also help pay for expenses like deductibles and co pays. More information on these credits will be provided to you later. If you and your family are below 133% of the Federal Poverty Level in 2014, you may qualify for Medicaid.
In 2014, the greater of $95 or 1% of taxable income;
In 2015, the greater of $325 or 2% of taxable income;
In 2016, the greater of $695 or 2.5% of taxable income; and
After 2016, the penalty is indexed for inflation.
As of 2019 the penalties under the individual mandate will no longer be applied.
However, there are two ways to avoid the tax penalty:
You can buy coverage for you and your family through your place of employment, if your employer offers such coverage. That coveragemust meet certain standards set by the law in order for you and the employer to escape respective tax penalties. The coveragemust meet certain minimum coverage standards (Generally pays at least 60% of your covered medical expenses) and must be considered “affordable” (Employer cannot charge you a premium for single or employee only coverage greater than 9.86% of your W-2 earnings for the year). The 9.86% would apply to annual salaries of up to about $45,000. Or, you can provide coverage for you and your family through a Federally run Insurance Exchange that is supposed to be up and running by 1/1/2014. Essentially, an Exchange is an interactive site where an individual can go to research, evaluate and buy healthplans. The State of Florida chose not to set up a state run exchange, so the Federal government will take over that responsibility.
Other changes that took effect in 2014 are:
The healthplan no longer excludes coverage of a pre-existing condition;
The healthplan may not impose more than a 90-day waiting period for coverage;
Your plan no longer place s an annual limit on key benefits in the plan;
Your healthplan must allow dependent children up to age 26 to enroll in coverage, regardless of the availability of employer-sponsored coverage where they work.
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