Understanding and deciphering health insurance requirements
Effective January 1, 2014, the Affordable Care Act (ACA) will require all Americans to maintain a minimum level of health coverage or face a tax penalty.
According to the Minnesota Society of CPAs, whether you’re uninsured, you’ve been denied coverage in the past, or you just want to explore new options, you can now “shop” for health care insurance via the government’s Health Insurance Marketplace at www.healthcare.gov or call 1-800-318-2596 for assistance. For Minnesotan exchanges, use www.mnsure.org.
The Health Care Marketplace is designed for those who don’t have insurance now and those who currently purchase their own insurance, meaning they don’t get it through an employer.
The exchange will offer a list of health plans and their premiums and out-of-pocket costs, including deductibles and copayments.
You can also submit a paper application or apply over the phone by calling 1-800-318-2596.
All plans must offer a comprehensive set of essential health benefits, including doctor visits, preventive care, hospitalization, prescriptions and more. Plans cannot deny you coverage or charge you more due to pre-existing health conditions, including a pregnancy or disability.
Your monthly premium will depend on your income, the state in which you live, your age, whether you smoke or not, and your family size, among other factors.
Cheaper plans come with big deductibles and many other out-of-pocket costs. For example, if you choose a plan that costs $40 or $50 a month, you may have a $5,000 or $10,000 deductible before the plan starts paying benefits.
If there is a particular doctor or facility you know you want to use, check that it takes part in the plan before you sign up.
You must have health insurance coverage by January 1 regardless of whether you have it through your employer; purchase it privately; are covered by Medicare, Medicaid or the VA; or purchase it through the Health Insurance Marketplace.
The most important deadline is December 15, the day the enrollment period ends for policies that go into effect on January 1, 2014.
You can enroll until March 31, but you must sign up and pay your first premium by December 15 if you want to be covered when the mandate to carry health insurance kicks in January 1.
Additional deadlines include:
• December 16–January 15: coverage begins March 1.
• January 16–February 15: coverage begins March 1.
• February 16–March 15: coverage begins April 1.
• March 16–31: coverage begins May 1.
Generally, people will be able to enroll in or change plans once a year during an annual open enrollment period.
Unless you’re in a group exempted by the Internal Revenue Service, you’ll be required to have insurance as of January 1, 2014, or else you’ll be liable for a tax penalty.
The 2014 penalty for not having health insurance is up to $95 per adult and $47.50 per child, or 1 percent of your taxable income, whichever is greater.
The penalty will eventually reach a maximum of 2.5 percent of your taxable income. The amount you owe will be prorated to reflect the number of months you were without coverage.
If you owe a penalty, it will be assessed on your 2014 income tax form due April 15, 2015. If your income is so low that you do not file a tax return, you are exempt from paying the penalty.
If you need help, a CPA can analyze your current situation and determine the best course of action with regard to your health insurance needs and your personal financial plan.
To find a CPA in your area, visit www.mncpa.org/referral or call 1-800-331-4288.