Q: When do I have to be covered?
A: January 1, 2014.
Q: How will I get this coverage?
A: There are many ways to meet what the law calls the “individual
responsibility” requirement. You can accept coverage provided by your
employer, purchase a policy on your own, buy a plan through a public
exchange, or get coverage through Medicare, Medicaid or through other
types of governmental programs.
Q: Is health insurance going to be free?
A: No. This is a common misconception. While starting in 2015 many
employers will be required to offer full-time employees (and their
dependents) the option of enrolling in coverage, in most cases employees
will be required to cover a share of the costs. You may also be eligible
for coverage through your state’s exchange or health insurance marketplace,
but that option may also require individuals to pay a share. Go to
www.healthcare.gov to learn more.
Q: How is the government going to know if I have coverage or not?
A: Starting for 2014, you’ll be required to state on your federal tax return
that you have health care coverage and identify the source. If your
employer is large enough, your employer will have to file separate
paperwork to declare whether they offered you coverage and whether
you accepted or rejected the offer.
Q: How much is it going to cost me?
A: This is probably the most important question for many employees.
The short answer is that it depends on where you and your family obtain
coverage. Here’s a look at various situations:
Employer-based coverage: If you choose to buy a health plan through
your employer, you’ll continue to pay monthly premiums for
individual or family coverage. It’s possible your monthly premiums for
work-based coverage may increase under the ACA. The law imposes
new fees and taxes that could affect your employer either directly or
indirectly (see Chapter 8). Employers may decide to pass along some
of these costs to employees through higher premiums.
Exchange plans: You may decide to buy a health plan for yourself and
your family through the health insurance exchange in your state. If
you meet certain income thresholds and do not have access to
affordable, minimum-value coverage through your employer, you may
be eligible for federal tax subsidies to buy health plans through an
exchange. Once you compare options and select a health plan, you’ll
be responsible for your monthly premium, minus any subsidies
received. To learn more about plans, pricing and possible subsidies to
buy exchange coverage, visit www.healthcare.gov for a link to the
exchange in your state.
Government programs: You may qualify for low-cost or free health
care coverage if your income level qualifies you for a government
program, such as Medicaid or the Children’s Health Insurance Program
(CHIP). In many states, people with household incomes up to 138
percent of the federal poverty level will be eligible for Medicaid.
Tax penalties: If you choose not to obtain health insurance coverage
for yourself and/or your dependents starting in 2014, you will be
assessed a tax penalty equal to the greater of a flat dollar amount, or a
percent of your income.
Q: So what happens if I just don’t get coverage?
A: In 2014, the penalty will be $95 per adult and $47.50 per child with a
maximum of $285 for a family, or 1 percent of family income, whichever
is greater. In 2015, the penalty goes up to $325 per adult and $162.50 per
child with a maximum of up to $975 for a family, or 2 percent of family
income, whichever is greater. In 2016 and beyond, the penalty will be $695 per adult
and $347.50 per child with a maximum of $2,085 for a family, or 2.5
percent of family income, whichever is greater.
Q: Do all employers have to offer health insurance, or just big
A: Beginning in 2015, businesses with 100 or more full-time-equivalent
employees are required to either offer minimum essential coverage to
their full-time employees and their dependents (children up to age 26)
or face possible penalties. In 2016 and beyond, this requirement applies to businesses with 50 or more full-time equivalent employees. Smaller businesses have the option of offering
coverage, of course, just as they always have.
Q: I only work part-time. Is my employer required to offer me
A: No. The law doesn’t require any employer to offer part-time
employees health coverage, though some may do so voluntarily. The law
defines part-time as anyone who averages under 30 hours a week.
Q: What’s this tax credit I’ve heard about?
A: For people with incomes between 100 percent and 400 percent of the
federal poverty level that do not have access to an offer of affordable
coverage through their jobs, the law offers a subsidy in the form of a
“premium tax credit” that can be used to help pay for the purchase of
insurance on the exchange. The law considers coverage to be "affordable" when the employee is asked to pay no more than 9.5% of their household income toward the premium for single-only coverage for the employee. The exchanges will play a central role in
determining if individuals are eligible to obtain the premium tax credit.
Some individuals may also be eligible for “cost-sharing reductions” to
help limit out-of-pocket costs for such costs as deductibles and co-pays.
These government subsidies are for people who buy health plans on
exchanges. Once an exchange determines an employee is eligible for a
premium tax credit, the government will pay the tax credit amount
directly to the health plan. To apply for subsidies, individuals and
families must submit an application to the exchange in their state.
Contact the exchange in your state for more information.
Q: What are these exchanges I keep hearing about?
A: The public exchanges or “health insurance marketplaces” are
competitive marketplaces that offer a variety of plans administered
by private insurance companies. Exchanges are open to individuals and
small businesses to purchase coverage. The exchanges will be a resource
for employees who may not have access to "affordable" health insurance
through their employer. For 2014, most states will defer to the federal
government to operate the exchange in their state.
There will be multiple ways an individual can access an exchange: a
website where you can learn about various insurance plans and select
one that will help you meet the individual mandate; a phone option; and
“navigators” within your community that can provide assistance in filing
the necessary paperwork. Visit www.healthcare.gov for information.