Choosing Your Health Care Plan

You have probably been so inundated with information and the politicization of coming health care reform that you really don’t know which end is up! Fed up, you’re really ready to just turn your back on the whole matter. So, I think, the following will shed some helpful light on the subject. (Should you be an employer, I’ll talk about the issues you face later in the article.)

There are a few factors we can use for determining what your response needs to be to the upcoming enrollment for 2014. First of all, if you’re employed and covered by an employee plan you need do nothing in response to the coming Marketplaces as the public exchanges are now being called. Your benefits are paid in part by your employer and you, as an employed insured, cannot receive tax credits through the marketplaces. If you do have and pay foryour own individual coverage, which was in effect on March 23, 2010, your plan may be grandfathered and you need not do anything. However, you may not get some rights other plans offer. Such grandfathered plans do not have to cover preventive care free of charge, do not have to guarantee your right to appeal, do not have to protect your choice of doctors and access to emergency care, nor do they have to be held accountable through rate review for excessive premium increases. Review your current policy to determine just what you have. These are just some basic items and are not all-inclusive; see for further information on grandfathered plans.

However, if you are an individual without insurance, self-employed, or your employer does not offer insurance, you fall into one of what I call three Categories for 2014:

Category I – has an income ranging from 100% to 400% of the Federal Poverty Level (FPL) and is eligible to receive subsidies through the Federal and State sponsored marketplaces. A single individual earning between $10,336 and $43,336 is eligible. The following is how it would line up for families:

Family of Two – $14,570 – $58, 280
Family of Three – $18,310 – $73,240
Family of Four – $22,050 – $88,200

Should you earn within the above income ranges, it is probably to your advantage to purchase insurance through the Marketplaces, as you will receive some level of subsidy for your insurance and pay a lower monthly premium. You can only receive subsidies through the State and Federal Marketplaces. Subsidies are only paid at the Silver Level of the Marketplaces! I’ll explain the metallic levels further later in this article.Still, compare the cost of the Marketplace plans with those off the Market for the best solution.

Category II – is for those individuals with incomes greater than 400% of FPL. For those who are single and earning over $43,336, you do not qualify for tax credits and subsidies nor do the following family settings:

Family of Two > $58, 280
Family of Three > $73,240
Family of Four > $88,200

For those who fall into this Category, you receive no subsidies and can more easily purchase insurance on or off the Marketplace. When I say Off Market, I’m referring to those plans purchased directly from a carrier or through a carrier’s agent and not utilizing the Federal or State Marketplace websites. Not all carriers are participating in the Marketplaces and those that do may not be offering their plans in all states.

Category III – is for those individuals who are not exempt (See for exemptions) and choose to not purchase insurance. People in thiscategory will pay a penalty fee collectible starting in 2015 in conjunction withthe filing of their tax return. The fee for 2014 is 1% of your yearly income or $95 per person for the year, whichever is higher. The fee increases every year. In 2016,it is 2.5% of income or $695 per person, whichever is higher. So, if your income is $100,000 your penalty for 2014 will be $1000 and $2500 for 2016.

In 2014 the fee for uninsured children is $47.50 per child. The most a family would have to pay in 2014 is $285.

It’s important to remember that someone who pays the fee won’t get any health insurance coverage. They will still be responsible for 100% of the cost of their medical care.

Now that you know what Category you’re in,especially those in Category II, let’s look at the differences between insurance in place during 2013 and that becoming effective in 2014. Plans effective and in existence by December 31, 2013 don’t have to follow all the rules of those going into effect on January 1, 2014. They do not have to accept all preexisting conditions nor do they have to contain all the Essential Health Benefits as those mandated by the ACA for 2014. Therefore, these plans come at a less expensive rate and their levels of benefit will be carried through 2014 before having to conform in 2015.

The health plans becoming effective in 2014 must provide the ten following EHBs:
• Ambulatory Patient Services
• Emergency Services
• Hospitalization
• Maternity and New born Care
• Mental Health and Substance Use Disorder Services, including Behavioral Health
• Prescription Drugs
• Rehabilitative and Habilitative Services and Devices
• Laboratory Services
• Preventive and Wellness Services and Chronic Disease Management
• Pediatric Services, including Oral and Vision Care

 Health Care PlanWhen the Marketplaces open, you’ll be in a very unique position. While online and using the Internet, you will be able to compare 2013 rates for privately purchased rates and plans to those becoming available in 2014. You do this by merely changing the effective date of the plan from one in 2013 to one in 2014. Should you qualify for subsidies as in Category I, you can compare the rates you’ll pay with the Silver Plan for 2014 available on the Marketplace website for your state. (The Federal and State Marketplace plans are identified by metallic plans: Catastrophic, Bronze, Silver, Gold, and Platinum Each metallic plan corresponds to the level at which it pays once your deductible is met for covered expenses. Catastrophic is for those under age 30 or with hardships. Bronze is at the 60% actuarial level with Silver at 70%, Gold at 80%, and Platinum at 90%. The plan you select on the Marketplace will pay at these levels once your deductible is met and until you reach your maximum out-of-pocket expense at which time it will pay 100% of covered expenses.)

If you have preexisting conditions, I still urge you to make application for a 2013 plan. The carrier may accept the conditions, carve out the condition for a period of time, or deny the application. If they carve out the condition, they will get back to you on details, which you can accept or deny. Should a carrier turn down your application, apply again after October 1, 2013, the 2014 enrollment start date, for a plan becoming effective on January 1, 2014 or thereafter. Since all conditions must be accepted for 2014 plans, you will be accepted. Whatever you do, do not cancel any current coverage until the new coverage is in effect.

Should you be an employer with over fifty employees, the ACA mandates have been pushed back to 2015 for you. Still, should you be an employer with less than fifty employees, you’re not required to provide health care insurance for your employees. However, if you are an employer with twenty-five or fewer employees there are some tax credits available to you.In order to qualify for these credits, an employer must have twenty-five or fewer employees, pay these employees less than $50,000 a year, and pay 50% or more of their employees annual healthcare coverage. Getting these credits also requires an employer to purchase coverage through the SHOP portion of the State and Federal Marketplaces.

Whether you’re employer or individual, your broker or agent will be able to provide you with more information and I suggest you contact him or her.

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