Individual and Family Health Insurance
With the implementation of the Affordable Care Act, people now have the option of obtaining health insurance through The Marketplace, or directly with an insurance carrier. Many people are still confused as to which way to go and how to get there. We will give you answers to some frequently asked questions here.
Q. How do I know where to go to get health insurance?
A. The amount of your premium is influenced by your age and geographic location (community rating), as well as your Modified Adjusted Gross Income. This will also determine the best place for you to seek enrollment.
- If your household income falls below 400% of the Federal Poverty Level, then you would benefit from enrolling in health insurance through The Marketplace (aka The Exchange). The Marketplace is the only avenue of securing health insurance and receiving a subsidy, otherwise known as A Premium Tax Credit, or APTC. Use this calculator to determine whether or not your income is below 400% of the Federal Poverty Level.
- If your income is below 138% of the Federal Poverty Level, then you qualify for Income Based Medi-Cal (California’s version of Medicaid). In California, you will need to sign up for Medi-Cal through The Marketplace, otherwise known as Covered California. Once enrolled there, Covered California sends your information to County Human Services, Economic Assistance Department, for processing.
- If your income falls between 138% – 266% of the Federal Poverty Level, you may be eligible for A Premium Tax Credit and any children under the age of 19 will be automatically placed on Medi-Cal.
- If your income is above the 400% Federal Poverty Level, you are better off enrolling directly with an insurance carrier. This eliminates the ‘middle man’ (Covered CA) and gives you direct access to the carrier, as well as a few more plan choices.
Whether you are eligible for assistance or not, a licensed and certified insurance broker, like Pronoeo Insurance Agency, can assist you with your enrollment at NO CHARGE to you.
Q. How do I know which insurance carrier to choose?
A. You will want to check with all of your current medical providers (doctors, therapists, specialists, facilities, etc.) to see with whom they are contracted, and then sign up with that carrier.
- Be specific when you ask your medical provider about their contracts because each contract is specific to the type of plan that is covered. A doctor or facility may be contracted for group insurance, but not for individual, and vice versa, with the same carrier. Or they may be contracted for a non-Marketplace plan and will not take a plan purchased from the Marketplace.
- Some offices will say that they “will take any PPO.” That does NOT mean that they are contracted with those carriers. PPO’s offer coverage outside of the prescribed network of physicians. However, utilizing one of them means more out of pocket expense for you. Make sure that your doctor has a contract with the carrier you choose.
- If your care needs to include a special facility, such as UC Medical Center or Stanford, be sure to ask if they are in the carrier’s network.
Q. How do I know which plan to choose?
A. You will want to make sure that any plan you choose is an MEC plan. MEC stands for Minimum Essential Coverage. Most short-term policies or travel insurance policies do NOT qualify as MEC plans because they do not provide the twelve Essential Health Benefits:
Ambulatory patient service
Maternity and newborn care
Mental health and/or substance abuse treatment and services
Behavioral health treatment
Rehabilitative and habilitative services and devices
Chronic disease management
Preventive and wellness services
Pediatric services (including dental and vision care)
Medi-Cal plans and Cobra plans DO qualify. However, your ultimate choice will most likely be based on affordability. You will need to look at the monthly premium as well as how much out of pocket expense you will have if/when you use the insurance.
- There are 4 levels of plans: Bronze, Silver, Gold, and Platinum – both inside and outside of the Marketplace. The different levels represent the different amount that each plan will cover;
Bronze covers 60%
Silver covers 70%
Gold covers 80%
Platinum covers 90%
- All plans cover preventive exams and procedures with no out of pocket expenses.
- Regardless of your health, no carrier can exclude you or rate you higher based on a pre-existing condition.
- If you are someone who rarely goes to the doctor, then you might want to choose the Bronze level plan. It has the highest deductible, but also has a cap on your out of pocket expenses. So if something major did happen, your maximum out of pocket for the year would be limited (Note: Maximum Out of Pocket expenses DO NOT include monthly premiums). However, if you have kids that are climbing trees all of the time, or you have a chronic illness, you might want something that will be a higher monthly premium, but less out of pocket when you go to the doctor. This is where a licensed and certified agent can help you evaluate your situation.
Q. What if I can’t afford the monthly premiums? Is there a penalty?
A. Yes, the penalties began in tax year 2014 and will increase each year. The family cap will be 300% of the current individual flat fee.
- In 2015, the penalty is $325 per adult, $162.50 per dependent, up to $975 per family, or 2% of your Modified Adjusted Gross Income, whichever is greater.
- In 2016 the penalty will be $695 per adult, $347.50 per dependent, up to $2085 per family , or 2.5% of your Modified Adjusted Gross Income, whichever is greater.
- In 2017 and beyond, the penalty will continue at 2.5% of your taxable income, or the flat-fee penalty stated for 2016 (whichever is greater), but will be adjusted for inflation. In extreme cases, a hardship can be filed that will allow someone to be exempt from the penalty. Check with your tax adviser or CPA to see if this would apply to your circumstances.
Q. Will I be able to deduct the premium I have to pay?
A. Self-employed persons MAY be able to claim their premiums as a business expense. Consult your accountant for precise information. If you are not self-employed, you will not be able to deduct premiums and the premiums must be paid with after-tax dollars.
Q. My spouse gets health insurance through his/her employer, but it is too expensive to add me and the kids. Can we go to the Marketplace and utilize the subsidy to buy insurance at a lower rate?
A. No. If an employer OFFERS insurance to a spouse and/or dependents of an employee, then the spouse and/or dependents are ineligible to receive any subsidies through the Marketplace. However, there are no restrictions for them purchasing other insurance; they just cannot receive any subsidies to do so.