Health Insurance – It’s the Law!

The health care reform law require nearly all Americans to have health insurance starting in 2014 or else pay a fine. Some exemptions will be granted, for example, for those with religious objections or where insurance would cost more than 8.5% of their family income. Below is some very important information that you must realize going into 2014. America’s healthcare system is going to change drastically, navigate the minefield successfully and you may get heavily subsidized coverage, but go without coverage and you can get hit with fines by the IRS.

Here are some Facts:

The health reform law give states the option to expand their existing Medicaid program to cover low-income and uninsured adults. In 2014 Medicaid will cover individuals and families under age 65 with incomes up to 138% of the federal poverty level which is $15,856 for an individual or $26,951 for a family of three. However, while the Supreme Court upheld the healthcare reform ruling, it limited the federal government’s ability to enforce the Medicaid expansion to low-income adults, effectively making the Medicaid expansion a state choice. The states have little option but to expand their Medicaid program as low income families will not be able to afford health insurance on their own. So many people who have never been on Medicaid, will be forced on it unless they can come up with money to buy medical coverage.

The health reform law will increase the Medicare payroll tax on earnings for upper income Americans. The Medicare Hospital Insurance Part A payroll tax on earnings for higher-income taxpayers by 0.9 percentage points from 1.45 percent to 2.35 percent, beginning in 2013. This is added to the high tax rates they currently pay.

The health reform law require employers with 50 or more employees to pay a fine if they don’t offer health insurance. This is a huge concern for small businesses that operate on minimal profits and cannot afford private health insurance coverage. Fines can reach upward of $3,000 per an employee but coverage could cost hundreds of thousands of dollars. Some companies may find that laying off a few employees prevents them from being involved in this requirement.

The health reform law does provide financial help to low- and moderate-income Americans who don’t get insurance through their jobs. The tax credits will be available to eligible U.S. citizens and legal immigrants who purchase coverage in the new health insurance exchanges and who have income up to 400% of the federal poverty level which in 2013 is $45,960 for an individual or $94,200 for a family of four. It is expected that majority of Americans will qualify for a subsidy in 2014. However, rates will raise an estimated 35%-75% so even large subsidies may leave Americans with the SAME costly coverage they are used to paying.

The health reform law create health insurance exchanges or marketplaces such as where individuals and families can shop for health insurance and compare prices and benefits. Once Exchange subsidies are announced will assist clients in applying for their health insurance subsidy.

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