It seems everyone has an opinion on The Affordable Care Act. It’s generally a pretty strong one too. Regardless of which side of the isle you’re on, one thing is almost certain. You don’t know all the details. How can I be so sure? Because it’s nearly 11,000 pages of regulations. Although this is something that affects all of us, few of us REALLY understand the complexity of it. Although we pick up bits and pieces from the media, and maybe even a little bit of research online, many of us accept that there is a major overhaul in the United States health care system, we’re not entirely sure how we are personally affected. Once again, we turned to a Holly Springs professional to learn more. Bob McIver from RDM benefits ran through it with us.
The Affordable Care Act (ACA) reforms the health care industry. It has just completed the first major wave of rules, changes, and open enrollment. Please do not lose sight of the “Open Enrollment”. This November will be the next Open Enrollment period for those individuals and families that need to enroll in the plan or they will have to suffer the penalty.
We have all been in question about the March 2010 decision to make the ACA a law. It is official and it is the law of the land. The major changes allow low and middle income Americans to purchase these products through the Market Place (sometimes known as the exchange). North Carolina has opted to stay with the Federal Guidelines and not introduce a new state health plan as well as not expand Medicaid.
What Does the Affordable Care Act Do for you?
The availability of the health plans through the carriers (insurance companies) will need to be sought out with the mandates that everyone who can afford health coverage must sign up. In this day and time we have to buy auto insurance and sometimes homeowners insurance. It is required. Well for the first time, we are required to buy health coverage.
There will be new adjustments made with new taxes, but the ACA will:
- Prohibit insurance companies from dropping your coverage.
- Eliminates pre-existing conditions clauses
- Eliminates gender discrimination
- Protects against rate increases due to health issues and caps your maximum out of pocket expenses in the plan.
- Make the Market Place available for assistance toward premiums for lower income households
- Offer preventative care at no cost. Annual screenings produce health
In 2014, approximately seven million individuals and families signed up for health coverage. We are not sure about the accuracy of these numbers, but they will grow with the mandatory enrollment.
Your Education on Health Care Reform
There are four types of “metal plans” with bronze, silver, gold, and platinum. These are available through the carriers and Market Place as well as a Catastrophic Plan for individuals under 30. With the lower priced products available (bronze & silver), my attitude is “just have something in place”. We as Americans do not want to discount our quality of health care and this is another objective of the ACA.
The ACA will benefit many Americans in many ways, but this does not mean everyone will pay less. There will be a lot of people that will be paying more for their healthcare, and obviously this won’t sit well with those that do. It’s important to understand all of your options. Just like going to an accountant to have your taxes filed, you should consider going to see a health care broker in order to be educated on your options. Brokers can be an asset to help evaluate these options.
There is a penalty for not being insured in 2014. The penalty in 2014 is calculated one of 2 ways. If you or your dependents don’t have insurance that qualifies as minimum essential coverage you’ll pay whichever of these amounts is higher:
1% of your yearly household income. (Only the amount of income above the tax filing threshold, $10,150 for an individual, is used to calculate the penalty.) The maximum penalty is the national average premium for a bronze plan. $95 per person for the year ($47.50 per child under 18). The maximum penalty per family using this method is $285.
The way the penalty is calculated, a single adult with household income below $19,650 would pay the $95 flat rate. A single adult with household income above $19,650 would pay an amount based on the 1% rate. (If income is below $10,150, no penalty is owed.)
The penalty increases every year. In 2015 it’s 2% of income or $325 per person. In 2016 and later years it’s 2.5% of income or $695 per person. After that it’s adjusted for inflation.
If you’re uninsured for just part of the year, 1/12 of the yearly penalty applies to each month you’re uninsured. If you’re uninsured for less than 3 months, you don’t have to make a payment.
You’ll pay the fee on your 2014 federal income tax return.
It doesn’t matter which side of the aisle you sit on. What’s important is that you understand that this is in place now, and ignorance is not an excuse that our government deems a valid excuse.
Like any topic concerning government rules and regulations, it’s best to talk to an expert. If you are responsible for your own health insurance, find someone who know the rules.
Thanks to Bob McIver with RDM Benefits in Holly Springs for his input and expertise on the subject.
