Affordable Care Act Takes a Bite

Affordable Care ActSome people say that the Affordable Care Act (Obamacare) is a dog.  Well, for 2016 this dog finally has developed some sharp  teeth.  Maybe you noticed when you did your 2014 taxes this year that you had to pay a small penalty for not having health insurance.  The penalty you will be paying shortly for not having insurance in 2015 may be more than three times  the 2014 amount, and it will more than double in 2016.  Ouch!

So what does this mean?  In 2014 if you didn’t have health insurance, you only had to pay a penalty of 1 percent of your income (or $95 per person) whichever is higher.  For the year 2015, (the taxes you will be filing in early 2016) your penalty will jump to 2 percent of income or $325 per person, whichever amount is higher. In  2016 these numbers grow to 2.5 percent of income or a minimum of $695 per person (children are accessed at a lower amount $347.50 per child).

Okay, so what if I’m insured for part of the year?  If you don’t have a Qualified Health Insurance plan for two months or less, then you don’t face a penalty.  Beyond that each month you don’t have health insurance counts as 1/12th of the total penalty.  That means if you do not have health insurance for three months you would be subject to a penalty of 25 percent of the full annual penalty;  for four months you would be subject to a penalty of 33 percent etc.

 

Finding consistency

Another issue is how people sign up for their insurance. For those who use a navigator it is very likely that the navigator(usually a seasonal employee)  is no longer employed, and thus you may not have anyone to assist you if you have a problem or issue after the enrollment period ends.  The same holds for those who use the internet.  We can also attest that many times the Healthcare.Gov representatives do not know the system, can’t provide guidance, and may cause you to get incorrect answers to problems or issues.  Only an agent is likely to be there year round to assist you if you have a problem.  At our agency we have learned that you may indeed throw out the piece of mail that may come and ask you for additional information.  We’ve undertaken a policy of reviewing the marketplace accounts of each of our clients every month so that we can proactively take care of issues that we can see before they cause our clients to lose coverage.

 

Avoiding pit falls

People are likely to experience new pitfalls with the Affordable Care Act as well.  This year over 5 million Americans signed up for health insurance but failed to keep it.  For some, they missed a payment or two; others failed to provide proof of citizenship/residency, income or some other required information.  So they lost their insurance, but they ended up with an outstanding balance with their selected insurance company.  Unfortunately most of these people didn’t call the marketplace to officially cancel their plans, and thus let their insurance lapse for non-payment.  Guess what, they still owe the premium balance to their insurance company.  That means that if they try to sign up this year with that company, they will need to pay off that balance before  actually getting their insurance.  This will lead to a great deal of confusion for those individuals.  Unfortunately it seems that Florida had the largest percentage of drop off and so we will have more than our share of headaches.  It is possible to correct this situation but you’ll need professional guidance to accomplish this.

 

So here are some general take-aways that we’ve learned from the first two Obamacare/ ACA seasons:

  1. Use a professional to assist you; it costs nothing, and they ought to know the ropes.
  2. If you apply on the marketplace and have any changes in status  (i.e. income increase or decrease, change in family size, if you move, if you change your phone number, etc.), then you need to notify the marketplace (1-800-318-2596).
  3. Some people (especially the young) may be better off paying the penalty and getting coverage using unqualified plans.

 

Bill Kohn is the owner-manager of Florida Health Agency. For more information about the Affordable Care Act, Obamacare, or Medicare, call 754-205-2005 extension 100 or email [email protected]

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