Be Prepared for Change in Health Insurance

shutterstock_151145456If you purchased an Affordable Care Act Plan, changes are coming soon. To protect yourself you should begin by acting now.

Several changes are about to happen.
The rates for every plan will be changing on January 1, 2015 with many plans going up by 17 percent or more.

The Subsidies you get are likely to change as well, and if you do nothing, you are very likely going to see sticker shock in January 2015.

There are three new carriers joining the exchange whose plans and rates may be better suited for you this year. Their rates are not as yet released to the public, but they will be on or before November 1, 2014. The carriers are Assurant, First Health and United HealthOne, a division of United Healthcare.
The doctor networks and the Medication Formulary may also have changes this year.

What do we recommend doing?
The most important thing is that you plan to review your current plan and make sure you understand the income you used as a basis for that plan. If you don’t remember that, we can assist you in figuring that out; it is a trial and error procedure which should get us close to the reality of your plan’s subsidy. You need to compare that to your current projected income to make sure things are more or less correct. There are some strategies that can mitigate any tax liabilities if you underestimated your subsidy. These include ensuring that you don’t expect a refund from the IRS as these funds can be clawed back by the IRS and using IRA’s and other shelter’s to reduce your project income. Don’t let poor planning, which is so simple to overcome, end up costing you money or making your insurance more expensive than it should.

Second, you should review your expected income for next year with a professional. If you plan wisely, you may be able to maximize your subsidy thereby reducing the cost of your health insurance and perhaps qualify for special plans that are only available to people within specific income levels. Being off by a few cents is enough to disqualify you.

The role of an agent is crucial to this process.
A good health insurance agent, familiar with the current healthcare law, can assist you in planning for your tax subsidy for the 2015 year. We have calculators we can use now to estimate what that will be, and you may be able to find them yourself from organizations like the Kaiser Foundation.

You should also plan to formally review and re-choose a plan in the November 15 through February 15 time period. Good agents will be filling their calendars early, so it’s best to speak with one and schedule a time now.
Many people who purchased insurance via the website and people who either used Navigators or called the Marketplace may not understand the nuances of the law and how to manipulate the process to gain the optimal coverage at the most cost effective price. Navigators and the marketplace are merely vehicles to gain coverage. They merely act as data entry clerks, working on the information you provided to them.

What if you didn’t buy health insurance this year?
Many of you chose to not get a plan this year. Some of you will be exempt while others are willing to pay the penalty. The tax for not buying a plan for 2014 is either $95 or 1 percent of your income, whichever is larger and this is a per person penalty.

For 2015 the penalties become more severe. They rise to $325 per person or 2 percent of your income, whichever is larger. Because of this you might want to reconsider and see if it now makes sense to have insurance.

William Kohn is the owner-manager of Florida Health Agency, headquartered in Pompano Beach, FL. 33064. He can be reached at 954-332-9768 or by email at [email protected].

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