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Health Care Reform Information
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Five Ways To Get Individual Health Insurance
Note: Health Care Reform is extremely complex and implementation is dynamic with new laws and rules being issued constantly.
This page represents a good faith effort to aid in understanding the changes.
This page represents a good faith effort to aid in understanding the changes.
Apply to the Exchange (aka "Marketplace")
The initial open enrollment for the California Health Exchange, named "Covered California" has ended. The next open enrollment period begins November 15th, 2014 and ends February 15th.
Applicants to the Exchange may be eligible for "Premium Assistance Tax Credits" (or "Advance Premium Tax Credit") to reduce the premium paid if their household income is less than 400% of the Federal Poverty Level (FPL). Applicants cannot get this credit if on either MediCal or Medicare, or if you have access to affordable insurance from your employer that meets minimum coverage requirements. Affordability is defined as having the employee only share of premiums be less than 9.5% of the employee's gross income.
In addition, applicants to the Exchange may be eligible for "Cost Sharing Subsidies" to reduce out of pocket costs such as co-pays and deductibles if their household income is less than 250% of the Federal Poverty Level.
If an applicant's household income is above 400% of Federal Poverty Level, then there will be no "Premium Assistance Tax Credits" or "Cost Sharing Subsidies", so the full price and all cost sharing would be paid by the applicant.
The selection of doctors and hospitals participating in individual plan networks may be smaller and more restrictive compared to group plan networks. Many grandfathered plans retain their broad networks however. Currently, it is estimated that about 80% of physicians and hospitals will be represented by some sort of plan on the Exchange.
Participating in an Exchange plan involves coordinating your health insurance with the IRS, Homeland Security, and the Social Security Administration, but this is all done in the background by Covered California.
Click for: How To Trigger A Special Enrollment Period
Apply for a Private non-Exchange Health Plan
Individuals and families may apply to private, non-Exchange plans. These plans will not be eligible for "Premium Assistance Tax Credits" or "Cost Sharing Subsidies" but basic pricing is not different than their counterparts in the Exchange.
All individually issued plans will be "guaranteed issue", meaning that no matter your health condition, even if you have been denied in the past, you will be able to get health insurance.
Pay a Penalty for Having No Insurance
If an individual does not purchase health insurance, either a flat penalty or a percentage of income will be imposed, whichever is greater. The penalty applies to each individual in a family. Dependents under 18 get a half penalty. The flat dollar penalty has a family cap at 300% of the flat dollar amount for an individual.
Annual Individual Mandate Penalty
Pay Either Minimum Household Penalty or Percentage of Household Income, Whichever is GREATER
Minimum Household Penalty Household Income
2014 $95/adult + $47.50/child or $285/family 1%
2015 $325/adult + $162.50/child or $975/family 2%
2016 $695/adult + $347.50/child or $2,085/family 2.5%
2017+ Increased for inflation Increased for inflation
DOWNLOAD INDIVIDUAL PENALTY CALCULATOR EXCEL SPREADSHEET
Religious Conscience Exemption
Some individuals may opt out by joining a faith-based medical expense sharing plan such as Samaritan's Purse, Medishare, or Christian Healthcare Newsletter. These plans are non-standard, limited in coverage, and may not cover preexisting conditions, but are designed to operate in a manner consistent with the member's belief system. Another plan that is more Libertarian politically than religious is the Liberty HealthShare program.
Employer Sponsored Group Health Plans
Individuals will be able to get health insurance as an employee benefit. Employers with less than 50 Full Time Equivalent employees are not required to offer group health. Employers with more than 50 Full Time Equivalent employees will be required to offer a plan to all full time employees, or be subject to potential penalties. The plan must meet certain affordability and benefit level tests as well.
Employer sponsored health insurance will continue to be a tax-efficient way to compensate and attract quality employees.
The initial open enrollment for the California Health Exchange, named "Covered California" has ended. The next open enrollment period begins November 15th, 2014 and ends February 15th.
Applicants to the Exchange may be eligible for "Premium Assistance Tax Credits" (or "Advance Premium Tax Credit") to reduce the premium paid if their household income is less than 400% of the Federal Poverty Level (FPL). Applicants cannot get this credit if on either MediCal or Medicare, or if you have access to affordable insurance from your employer that meets minimum coverage requirements. Affordability is defined as having the employee only share of premiums be less than 9.5% of the employee's gross income.
In addition, applicants to the Exchange may be eligible for "Cost Sharing Subsidies" to reduce out of pocket costs such as co-pays and deductibles if their household income is less than 250% of the Federal Poverty Level.
If an applicant's household income is above 400% of Federal Poverty Level, then there will be no "Premium Assistance Tax Credits" or "Cost Sharing Subsidies", so the full price and all cost sharing would be paid by the applicant.
The selection of doctors and hospitals participating in individual plan networks may be smaller and more restrictive compared to group plan networks. Many grandfathered plans retain their broad networks however. Currently, it is estimated that about 80% of physicians and hospitals will be represented by some sort of plan on the Exchange.
Participating in an Exchange plan involves coordinating your health insurance with the IRS, Homeland Security, and the Social Security Administration, but this is all done in the background by Covered California.
Click for: How To Trigger A Special Enrollment Period
Apply for a Private non-Exchange Health Plan
Individuals and families may apply to private, non-Exchange plans. These plans will not be eligible for "Premium Assistance Tax Credits" or "Cost Sharing Subsidies" but basic pricing is not different than their counterparts in the Exchange.
All individually issued plans will be "guaranteed issue", meaning that no matter your health condition, even if you have been denied in the past, you will be able to get health insurance.
Pay a Penalty for Having No Insurance
If an individual does not purchase health insurance, either a flat penalty or a percentage of income will be imposed, whichever is greater. The penalty applies to each individual in a family. Dependents under 18 get a half penalty. The flat dollar penalty has a family cap at 300% of the flat dollar amount for an individual.
Annual Individual Mandate Penalty
Pay Either Minimum Household Penalty or Percentage of Household Income, Whichever is GREATER
Minimum Household Penalty Household Income
2014 $95/adult + $47.50/child or $285/family 1%
2015 $325/adult + $162.50/child or $975/family 2%
2016 $695/adult + $347.50/child or $2,085/family 2.5%
2017+ Increased for inflation Increased for inflation
DOWNLOAD INDIVIDUAL PENALTY CALCULATOR EXCEL SPREADSHEET
Religious Conscience Exemption
Some individuals may opt out by joining a faith-based medical expense sharing plan such as Samaritan's Purse, Medishare, or Christian Healthcare Newsletter. These plans are non-standard, limited in coverage, and may not cover preexisting conditions, but are designed to operate in a manner consistent with the member's belief system. Another plan that is more Libertarian politically than religious is the Liberty HealthShare program.
Employer Sponsored Group Health Plans
Individuals will be able to get health insurance as an employee benefit. Employers with less than 50 Full Time Equivalent employees are not required to offer group health. Employers with more than 50 Full Time Equivalent employees will be required to offer a plan to all full time employees, or be subject to potential penalties. The plan must meet certain affordability and benefit level tests as well.
Employer sponsored health insurance will continue to be a tax-efficient way to compensate and attract quality employees.