How to calculate your Modified Adjusted Gross Income (MAGI)

Generally, your Modified Adjusted Gross Income (MAGI) is the total of your household's Adjusted Gross Income and any tax-except interest income you may have (amounts on lines 37 and 8b from IRS Form 1040).

How to calculate your Gross Income (GI)

Your gross income is the total money you earn through wages, interests, dividends, rental income, royalty income, capital gains, business income, farm income, unemployment, and alimony. It includes your salary, interest, income from investments, and any income you made through business, trade, or investments.

How to calculate your Adjusted Gross Income (AGI)

This is your GI minus your IRS deductions: things like IRA contributions, moving expenses, alimony paid, self-employment taxes, and student loan interest.

GI - Deductions = AGI

How to calculate your Modified Adjusted Gross Income (MAGI) and why it's important to healthcare

The MAGI is the magic number that determines if you qualify for a tax subsidy to lower the premium or out-of-pocket expenses through an Individual or Family health policy through the exchange.

Your MAGI is your ADJ with some items added back and counted again.

AGI + IRA Contribution Deductions + Student Loan or Interest Deductions + Excluded Foreign Income + Employee Savings Bonds used to pay higher education + Employer-paid adoption expenses = MAGI

It's simpler than it seems

For most people, the AGI is the same as their MAGI. .

What if I lose health coverage through my job?

If you lose your health coverage at your job, you have 2 main options for health insurance: 1) Enroll in an individual or family plan through the private exchange or 2) Continuing your group coverage through COBRA.

Get the Facts

If you lose your job and/or your job-issued health insurance, you may want to buy an individual or family plan through the private exchange. 

If you qualify for a tax subsidy based on your family size and household income, you can enroll in the government-sponsored plans through the private exchange. Your plan will be issued by a brand-name insurance company. 

If you do not qualify or don't want to use a subsidy, you can enroll in a private plan offered through the private exchange instead. We offer both public and private plans options. 

Or, you may have the option of continuing your coverage for a period of time through COBRA. COBRA is generally for employers with 20 or more employees on the plan, so if your employer is too small for COBRA, you might have a different continuation option in your state. 

• 1) Get an individual or family plan in the exchange If you lose your health insurance through your job for any reason, you can enroll in a private plan through the exchange. This is true even if you leave your job outside the Open Enrollment period (first year is October 1, 2013 to March 31, 2014). By using the exchange, you could qualify for lower costs based on your household income to keep the plans affordable for you. You can't be turned away or charged more because of pre-existing conditions, how often you use your plan, gender, or profession. Pre-existing conditions and pregnancy are always covered. All plans must include Essential Health Benefits (things like hospitalizations  ER, Rx, etc) with no yearly or lifetime limits so you can never run out of insurance for core care.   
• 2) Use a continuation option for smaller businesses (varies by state) COBRA might not be available to you if your employer is too small to qualify for COBRA (generally speaking, "too small" means employers with less than 20 employees on the health plan for more than half of the previous plan year). If COBRA isn't an option, there might be a different continuation option for small employers in your state. COBRA is a federal law that may let you pay to keep you and your family on your employee health insurance for a limited time (usually 18 months) after your employment ends or you lose coverage through your job.

If you decide on COBRA continuation coverage, you won't be able to get any of the lower costs on premiums or out-of-pocket expenses when you use your plan. You can only qualify for reduced costs through individual or family private plans in the exchange. 

Individual Requirement to have health insurance

If you do not have coverage that is considered minimum essential coverage (this could be a private plan, coverage through your job, or a government-sponsored health plan like Medicaid, Medicare, CHIP, Tri-Care, etc.) starting in January 2014, you have to pay a penalty if you don't qualify for an exception. You will also have to pay all of the costs for your health care and will have no financial protection if you get sick. 

What if I have insurance through my job?

You can keep it. You're considered covered under the new Health Reform law. 

But you may be able to change to enroll in new coverage through the exchange if you want to.

Any job-based health plan you currently have qualifies as "minimum essential coverage" under the law. You don't need to change to a new plan in order to avoid the fee that uninsured people may have to pay for 2014.

Comparing job-based and Exchange plans

With most job-based health insurance plans, your employer pays a portion of your premiums (usually about 50% of your portion of the monthly premium). If you choose a private exchange plan instead for you (as individual or as family), your employer will not likely pay any toward the premium. 

Qualifying for exchange savings in 2014

If you decide to shop for new plans in the exchange, you can. You'll still be entitled to all the new benefits and underwriting. You won't be turned down or charged more premium for pre-existing conditions  claims, gender or profession. Pre-existing conditions and pregnancy are always covered. All new plans must include a of Essential Health Benefits with no yearly or lifetime benefit limits so you can never run out of insurance for core care. 

But be aware that you may not qualify for lower costs on your monthly premiums and out-of-pocket costs (things like deductibles, copays, etc), even if your income qualifies you for it.

Whether you qualify for lower costs in the exchange based on income will depend on what kind of coverage your employer offers. 

If your job-based coverage is considered affordable and meets minimum value, you won't be able to get lower costs in the exchange. This is true no matter what your income and family size are.

Your employer can tell you whether the insurance plan it offers meets minimum value and can provide you with information to determine if the plan is considered affordable to you.

If you do not qualify for lower costs in the exchange, and your employer does not pay part of your premiums on new plans in the exchange, be sure you take these things into account before you consider choosing a plan other than your employer’s.

What if I have PCIP coverage?

Coverage through the federal Pre-Existing Condition Insurance Plan (PCIP) ends on December 31, 2013. You must take action by December 15 to avoid a coverage gap.

Why is PCIP coverage ending?

PCIP will not pay for services you get after December 31, 2013. If you don’t sign up for new coverage by December 15, you won’t have health insurance coverage on January 1, 2014.

When the health care law was signed in 2010, it created PCIP as a temporary program. PCIP made health coverage available to uninsured people with pre-existing conditions until key parts of the law took effect.

PCIP enrollees have new options

Starting in 2014, health insurance companies can no longer deny you coverage or charge you more because of your health condition. Pre-existing condtions must be covered and you can't be penalized for having them. You might qualify for lower monthly premiums or lower out-of-pocket costs (things like deductibles, copays, etc) based on household income. New plans through the exchange are based on a sliding scale to keep them affordable for you while offering you comprehensive coverage for your your health conditions. 

Now you have more choices for health coverage. You can get coverage in the individual market, through your employer, or from public programs like Medicaid and the Children’s Health Insurance Program (CHIP).

Enroll by December 15 for coverage that starts January 1

You must enroll in a new health plan by December 15, 2013 in order to have coverage that starts January 1, 2014. If you enroll after December 15, your coverage can start no earlier than February 1, 2014.

Open enrollment for the exchange ends March 31, 2014.

You must take action to get new coverage because PCIP coverage does not automatically convert to an exchange plan.

What dates should I mark on my calendar?

For shopping in the exchange for new coverage:

There are 3 key dates to remember: 

• October 1, 2013: Open enrollment starts
• January 1, 2014: Health coverage can start
• March 31, 2014: Open enrollment ends

If you want to secure new coverage and try to lower your costs based on your household income, you'll need to make a plan selection during Open Enrollment. If you miss it, you'll have to wait until the next year's Open Enrollment to qualify for lower costs (October 1, 2014-December 31, 2014)

You can apply for Medicaid and CHIP any time

Medicaid provides low-cost or no-cost insurance to low-income individuals or families. Children’s Health Insurance Program (CHIP) provides insurance to children whose family's incomes are too high for Medicaid but they still need some financial assistance. These are both administered by your state and can vary depending on where you live. If you qualify for Medicaid or CHIP, your coverage can begin immediately. You can also apply for coverage at any time. 

Self-Employed will use the Individual and Family Exchange to secure coverage

Under the law, if you are Self-Employed (business of one), then you are not considered an "employer" under the Affordable Care Act. Therefore, you'll be able to use the exchange to qualify for lower monthly premiums or out-of-pocket expenses based on your household income on new plans... if you don't have access to an affordable job-based plan through your spouse's employer or other government-sponsored coverage. Be sure to mark those 3 dates at the top of this post on your calendar  Open Enrollment rules will apply to you.

Small employers can start coverage any time

A small employer has less than 50 full-time equivalent employees. Small employers generally may start offering health insurance coverage to their employees through the exchange at any time during the year.

Large employers can start coverage any time

A large employer has 50 or more full-time equivalent employees. Small employers generally may start offering health insurance coverage to their employees through the exchange at any time during the year.

What if I'm a part-time employee and my employer doesn't offer coverage?

If you’re a part-time worker and you don't have access to coverage through work, you may be able to buy health insurance in the exchange and qualify for lower costs based on your household income.

If your employer doesn’t offer health insurance to part-timers

You may be able to get lower costs on your monthly premiums and out-of-pocket costs based on your household size and income.

You may also qualify for free or low-cost coverage through Medicaid or the Children’s Health Insurance Program (CHIP).

If your employer does offer coverage to part-timers

If you’re offered coverage through an employer, you may buy insurance through the exchange instead, but in most cases, have access to affordable coverage through work means you can't qualify for lower costs for private plans based on income. 

You would be eligible for lower costs only if the coverage your employer offers isn’t considered affordable to you or doesn’t meet certain minimum standards.

How are exchanges helping individuals and families?

If you need coverage, you can use the exchange to enroll. If you have coverage, you gain new rights and protections through the exchange. 

But if you don’t have any qualified coverage (individual or family coverage, plan through your job or your spouse's, or a government-sponsored plan), you may have to pay a fee.

Exchanges and what’s changing in 2014

Whether you’ve been uninsured, you’ve been turned down for health insurance in the past, or you just want to see if you can save money and get better coverage under the new law, the exchange will give you more choices. And, you'll have more control over your benefits. No matter where you live in the United States, you'll have access to the new health plans. 

By using a private exchange, you can compare coverage options based on price, benefits, quality, and more. You can compare private and government-sponsored plans side-by-side. You can choose the combination of price and benefits that fits your budget and meets your needs.

• You can get lower costs on coverage: Many will qualify for lower monthly premiums or out-of-pocket costs (like deductibles, copays, etc) on private insurance through the exchange. Subsidies are on a sliding scale to keep insurance affordable for you based on your household income.
• Essential health benefits are covered in the exchange: All plans must offer Essential Health Benefits including doctor visits, preventive care, hospitalization, prescriptions, and more - with no yearly or lifetime benefit limits, so you can never run out of insurance on core care. 
• Pre-existing conditions will be covered: Plans won’t be able to deny you coverage or charge you more due to pre-existing health conditions, including a pregnancy or disability.
• An exchange can help you make decisions:  Find out if you qualify for lower premiums, check doctor networks, compare plans side-by-side, calculators for tax subsidies or Small Business Tax Credits, watch videos to help you make choices: these are just some of the helpful tools you can use through the exchange. And you'll have access to a nationwide team of benefit specialists and Health Reform experts if you need personalized assistance. 
• Fees begin: Beginning 2014, most people are required to have health coverage. Coverage could be a plan you purchase yourself, coverage through your job or your spouse's job, or a government-sponsored plan. Without qualified coverage, most people will be charged a fee starting in 2014. 

Open enrollment for exchange plans begins October 1, 2013 and runs through March 31, 2014. Coverage begins as early as January 1, 2014.

What are Essential Health Benefits?

All new individual and family plans issued January 1, 2014 or after must include coverage for Essential Health Benefits. No insurance company can put a yearly or lifetime maximum on Essential Health Benefits so you'll never run out of insurance for core care.

The essential health benefits include at least the following items and services:

• Ambulatory patient services (outpatient care you get without being admitted to a hospital)
• Emergency services
• Hospitalization (such as surgery)
• Maternity and newborn care (care before and after your baby is born)
• Mental health and substance use disorder services, including behavioral health treatment (this includes counseling and psychotherapy)
• Prescription drugs
• Rehabilitative and habilitative services and devices (services and devices to help people with injuries, disabilities, or chronic conditions gain or recover mental and physical skills)
• Laboratory services
• Preventive and wellness services and chronic disease management
• Pediatric services

Essential health benefits are minimum requirements for all plans in the exchange. Plans may offer additional coverage. You will see exactly what each plan offers when you compare them side-by-side in the exchange.

Can I keep my own doctor?

You may be able to keep your doctor and use one of the new plans, depending on the plan you choose.

Different plans have different doctor choices

A network is a list of hospitals, doctors, specialists, pharmacies, and other health care providers that participate in your plan. The health care providers have contracts to take care of the plan's members (that's you!). Depending on the type of policy you buy, care may be covered only when you get it from a network provider.

When comparing plans in the exchange, you will see a link to a list of providers in each plan’s network. If staying with your current doctors is important to you, check to see if they are included before choosing a plan.

Exchanges Scheduled to Open on October 1, 2014

What is an exchange?

Think of an exchange like an online supermarket for benefits. You'll browse through low-cost plans online, compare benefits and pricing side-by-side, see if you qualify for tax subsides or tax credits to reduce your costs and enroll online. Plans are sold by private insurance companies competing for your business.

Another way to think of shopping in an exchange is like planning a trip to the Grand Canyon. The first thing you'll probably do is visit a travel website to look at prices for airfare. You'll compare prices from several different private airline companies side-by-side. Then you'll consider things like arrival time or airport location. And once you make your decision, you can book your flight right there on the site before you shut your computer down. Or, if you'd prefer, you can call a service number to get information over the phone, too.

That's just like an exchange! Simple, better choices. Quick and easy comparisons. Private companies competing for your business to give you the best value. Purchase what you need online.

There are two types of exchanges: Public and Private.

Public exchanges are fun by either the state or federal government, but you'll still be shopping for plans sold by private insurance companies such as BlueCross BlueShield, United Healthcare and Humana. The public exchange choices and pricing will vary depending on what state you live in.

The public exchange will be used mostly by people or businesses who qualify for tax subsidies or tax credits to reduce their insurance costs. This will be for individuals and families, Self-Employed (who are the same as an individual or family under the new law) and Small Business (less than 50 full-time equivalent employees).

Private exchanges can include access to the public exchange products and information in addition to all other health insurance plans. Compare benefits, pricing and doctor networks for public and private plans side-by-side and decide which one is best for you. Private exchanges might also offer other products beside health insurance - like dental, vision, life, critical illness or accident to name a few. Private exchanges might also offer other services like wellness programs, online benefit management, benefits app, payroll, COBRA administration and more.

A private exchange can be sued by anybody who needs insurance, depending on what products that particular exchange offers. Some private exchanges might offer plans to all markets: individuals & families, Self-Employed, Small Business, Large Businesses and Medicare-eligible consumers.

A private exchange is your one-stop-shop for getting the best value from your benefits.

Don't stop preparing just because you heard "delay"

We've heard the word "delay" several times since we've heard the word "passed" in relation to the Patient Protection and Affordable Care Act (PPACA), sometimes called 'Obamacare'.

First, there was the delay of Medicare cuts until after the election. Then there was the delay of the Employer Mandate, which required businesses of 50 or more full-time equivalent employees to offer affordable health insurance or pay a penalty. Penalties for non-compliance have been delayed until 2015. Then there was an announcement, buried in the Federal Register, that the administration would delay enforcement of several key pieces of eligibility for another year, relying on the good, old fashioned honor system for individuals to report their income and base tax subsidies on that. And most recently, the caps on out-of-pocket insurance costs have been delayed for one more year (now starting in 2015). By limiting the "worst case scenario" amount that you'll pay out-of-pocket in health expenses each year, which would likely cause many premiums to increase.

Don't stop preparing just because you heard "delay"

Many people think that the entire law has been delayed, but it's only the specific parts listed above. 

The individual requirement to have health insurance will start on-time on January 1, 2014 - along with other key changes to individual and family policies. You can qualify for tax subsidies based on income to help reduce monthly insurance premiums and out-of-pocket expenses like deductibles and copays. You cannot be turned down or charged extra for pre-existing conditions, health history, gender, or how often you use your plan. Pre-existing conditions and pregnancy are always covered. Your children can be insured on your health plan until they are age 26. You can shop in exchanges to help reduce your costs and choose from a Platinum, Gold, Silver, or Bronze (some will have a 5th "catastrophic" plan option) sold by private insurance companies competing for your business. 

Changes that affect Small Businesses will also begin in 2014. PPACA defines a Small Business as one with at least two but less than 50 full-time equivalent employees. If you are Self-Employed (business of one), then you are not considered an "employer" under PPACA and can use the exchange to shop for low-cost individual and family policies. Insurance companies cannot charge Small Businesses more based on size, gender, health conditions within the group, pre-exisiting conditions, claims, or profession. Insurance companies also have to account for where all the premiums dollars go with limits on how much they can keep for administration and overhead costs and profit. Small Businesses are not required to offer health insurance to its employees, but might qualify for a tax credit if they do. 

Why were parts of the law delayed?

The reason for many of the delays in the law are associated with cost. When all plans have to limit what an individual can pay in out-of-pocket costs each year ($6,250 for an individual - includes copays, deductibles, etc.) and limit the deductible on health plans (can't exceed $2,000 for an individual or $4,000 for a family), then we will see an increase in what many people pay for insurance. As we know, there is no such thing as free lunch, so when benefits on health plans get better, the prices will get higher. This delay will give us all time to adjust to the new rating system before making additional changes that could increase insurance rates.

According to a study released by the Obama Administration, over half of Large Businesses (50 or more full-time employees) were not prepared for PPACA changes, and that is why the Employer Mandate was delayed. The Employer Mandate requires Large Businesses to offer health insurance to their employees or pay a penalty ($2,000 per employee per year with a wavier for the first 30 employees). The plan also has to pass an Affordability Test for all employees. If it is deemed unaffordable for at least one employee who tries to use a tax subsidy to qualify for reduced premiums in the individual exchange, then the employer would be charged a penalty of $3,000 per employee per year for non-compliance.  

So what should I do now?

Keep moving ahead. Don't stop preparing your Large Business for PPACA changes just because you have another year before the penalties begin. Use the next year to partner with a private exchange who will make sure that your plans are PPACA compliant, you are doing all the required calculations and reporting, and your plan passed the Affordability Test. Do this in 2014 so you are ready for 2015... penalty-free. 

What if a small business doesn't offer insurance to employees?

Under the Affordable Care Act, a small business is one with less than 50 full-time equivalent (FTE) employees.

A small business is not required to offer health insurance to employees, but a small business can choose to offer insurance. Small businesses with less than 25 employees might qualify for small business tax credits by offering insurance and paying at least half of the employee's premium.

Because a small business is not required to offer insurance, you have a few options:

1) Offer group health insurance using a small business tax credit
2) Offer group health insurance if you don't qualify for a small business tax credit
3) Offer individual insurance plans to your employees through the private exchange

Contact us for your complimentary review to see what option is best for your business.

What is the SHOP for small businesses?

The SHOP is the Small Business Health Options Program under the new Health Reform law.

Starting in 2014, the SHOP is available for small businesses with less than 50 full-time equivalent employees. Your exchange expert can help you determine if the SHOP will help your business.

Starting in 2016, businesses up to 100 employees can use the SHOP to shop for health coverage for employees.

If you are Self-Employed (business of one), then you will not use the SHOP, but you can shop for individual policies through the exchange instead.

Small Business Tax Credit

If your business qualify for a small business tax credit, you can only apply it to plans purchased through the SHOP. You can still work with your agent, broker, or private exchange to help with SHOP plans.

What if I retire but I'm not eligible for Medicare yet?

Medicare at age 65

You qualify for Medicare at age 65. Some people qualify for Medicare younger based on disabilities, but for most people, it is based on age. It does not matter what age you get Social Security income, Medicare will still begin at age 65.

Retiring before age 65

If you retire before age 65, you'll need to secure health insurance coverage to avoid paying a penalty in 2014.

You might qualify for reduced premium or lower out-of-pocket plans based on your income through the exchange.

You might qualify for extending your employer health insurance benefits through COBRA.

You might qualify for Medicaid, which is low-cost or no-cost insurance for low-income individuals or families.

If your employer offers retiree coverage, then you can take that and meet the individual requirement to have insurance under the new Health Reform law.

What are my health insurance options if I'm unemployed?

If you are unemployed, you may qualify for Medicaid, the Children's Health Insurance Program for your children, or lower costs on health plans in the exchange based on your income.

Options depend on your household income and family size

Your household income and your family size, not whether you are working or not, will determine what health insurance options you have and how much you will pay for coverage.

Starting in 2014, you might qualify for lower premiums and lower out-of-pocket costs for a plan through the exchange based on your income.

Will I qualify for lower premiums under the Affordable Care Act?

If you don't have access to an affordable health insurance plan through an employer, then you might qualify for lower premiums when you purchase a plan through the exchange. It depends on your income and family size.

Pay Lower Premiums

Based on your household income, you might qualify for a tax credit called the Advance Premium Tax Credit. This credit is applied immediately to your premium to reduce the cost you pay each month for health insurance.

Pay Lower Out-of-Pocket Costs

You might also qualify for lower out-of-pocket costs when you use your health plan based on income. Learn more here.

Estimate Your Savings

You can use these income levels as a guideline to estimate if you might be eligible for lower premiums starting in 2014. The premiums are based on a sliding scale to keep them affordable for you, so the lower your income, the less you pay for insurance. (These are 2013 income amounts and are likely to be higher in 2014)

•  $11,490 to $45,960 for individuals

• $15,510 to $62,040 for a family of 2

• $19,530 to $78,120 for a family of 3

• $23,550 to $94,200 for a family of 4

• $27,570 to $110,280 for a family of 5

• $31,590 to $126,360 for a family of 6

• $35,610 to $142,440 for a family of 7

• $39,630 to $158,520 for a family of 8

• wages

• salaries

• tips

• net income from a business you own

• social security payments

• unemployment pay

• other sources such as alimony, rental income, interest, dividends, capital gains, annuities, and some retirement and pensions

Medicaid

If your income falls below those amounts, then you likely qualified for Medicaid. Medicaid is a federal program that gives low-cost or no-cost insurance coverage based on income, which is run on the state-level. 

The Affordable Care Act expanded the Medicaid program in 2014 to include more people, but not all states agreed to expand the program. And not all states offer coverage to all adults who qualify based on income. So, if you cannot get Medicaid because of your state's rules, then you would qualify for lower premiums by purchasing a plan through the exchange instead. The premiums are on a sliding scale to keep them affordable for you. 

Children's Health Insurance Program (CHIP)

If your household income is too high for Medicaid, you might qualify for CHIP in your state to insure your children. 

Calculating Your Income Level

When you qualify for lower premium plans through the exchange, you'll need to estimate your household income for 2014.

For most people, you can use your household's adjusted gross income for this estimate. You might find that on your tax return from last year to help you estimate.

Another way is to add up all the following income sources for all those in your household in 2014:

Modified Adjusted Gross Income (MAGI)

When you actually apply for coverage, you'll be asked to give your "Modified Adjusted Gross Income" for your household.

Generally speaking, that amount is your household's adjusted gross income plus any tax-except Social Security, interest, and foreign income you have. That's the number you use when you qualify for lower premiums in the exchange, Medicaid or Children's Health Insurance Program.

But don't panic. You don't have to calculate this number yourself. When you complete your application for lower premiums, the math will be done for you. It's just a good idea to see if you might qualify before taking the time to complete the application. 

How do I choose between the Bronze, Silver, Gold, or Platinum plans?

4 Plan Choices

There are 4 different categories of plans to choose from in the new exchange that you could get lower premiums or lower out-of-pocket expenses on based on your income. They are Bronze, Silver, Gold, and Platinum.

All the plans include a core set of Essential Health Benefits. The four categories do not indicate the quality of care that you'll receive - just what you pay out-of-pocket when you use your plan.

Each category has a different monthly premium amount and a different amount that you pay out-of-pocket for healthcare.

5th choice for some

There is a fifth "catastrophic" plan, which is available for people under 30 years old or those with limited incomes. Learn more about that plan option here.

Paying Premiums

With all health insurance plans, you pay a premium each month to have the coverage. You'll pay this amount to the insurance company whether you use your plan or not.

Generally speaking, the higher the premium, the lower your out-of-pocket. The lower the premium, the higher your out-of-pocket.

For example, if you have a Gold plan, you will likely pay more per month in premium but less when you go to the doctor or have another medical service. If you have a bronze plan, you'll likely pay more for services but pay less each month in premium.

How do you choose your plan?

Your plan choice comes down to your personal preference and comfort level. You have to find the balance between price and benefit that is right for you.

Of course, none of us know what the future will bring. That's why we have insurance, after all. So the best thing we can do is take past health history into consideration. You also need to think about what is a comfortable amount for you to pay out-of-pocket in medical expenses. Most consumers find themselves falling somewhere right in the middle. Most don't want to pay the highest premium, but also don't want to biggest out-of-pocket costs either.

Some considerations to help you decide:

Do you go to the doctor often? Take many prescriptions drugs? Think there is a high possibility of hospitalization or expensive outpatient procedures or tests?

If so, you want want to consider paying the higher premium for a Platinum or Gold plan. The more often you use your plan, the more having lower out-of-pockets costs will help you.

If not, you might want to consider a Silver or Bronze plan. You'll pay more for medical services when you use your plan, but you'll save on the monthly premiums. And if you don't think you'll use your plan that often, you might see an overall savings in the year.

Will I qualify for lower out-of-pocket costs under the Affordable Care Act?

When you purchase health insurance coverage through the exchange, you might be able to get lower costs on deductibles, copayments and other out-of-pocket expenses. It depends on your income and family size.

Qualifying for lower out-of-pocket costs in the exchange

When you purchase a qualified plan through the exchange, the amount you pay in out-of-pocket expenses for Essential Health Benefits is based on your income. It's on a sliding scale to keep it affordable for you.

Estimating Your Income

Use this 2013 information as a reference, even though the amounts are likely to be slightly higher in 2014. Also, amounts can be different based on family size, up to 8 family members.

* Up to $28,725 for individuals
* Up to $38,775 for a family of 2
* Up to $48,825 for a family of 3
* Up to $58,875 for a family of 4
* Up to $68,925 for a family of 5
* Up to $78,975 for a family of 6
* Up to $89,025 for a family of 7
* Up to $99,075 for a family of 8

The income amount for qualifying for lower premiums is different. Right now, we are just talking about qualifying for lower out-of-pocket costs when you use your plan for medical care.

For Silver Plans Only

The out-of-pocket savings can only be applied to Silver plans in the exchange if you qualify. 

Plans are divided into 4 different categories: Platinum, Gold, Silver, and Bronze. The categories are based on how much you pay toward medical costs and how much the insurance plan pays when you get medical care. It isn't based on quality.

When you qualify for lower out-of-pocket expenses, it's like getting a Gold or Platinum plan for the price of a Silver plan. You can select any plan you want, but you can only apply your out-of-pocket savings toward a Silver plan.

Can I buy a "catastrophic" plan under the new Health Reform law?

Who can buy a "catastrophic" plan?

For most people, a "catastrophic" plan will not be an option. The Affordable Care Act limits your out-of-pocket risk on most new health plans, making catastrophic plans not compliant with the new law for most people.

However, there will be a "catastrophic" health plan available in the exchange starting in 2014. People under 30 years old or those who have limited incomes and qualify for a hardship exemption may be able to buy the "catastrophic" to save premium.

What is a "catastrophic" plan?

It protects you from very high limited costs, but asks you to incur for expenses than other, more comprehensive plans in the marketplace. A catastrophic plan generally requires you to pay a big portion of your health costs upfront and mainly provides protection against very large claims and worst-case scenarios.

Catastrophic plans can still provide preventive care at no cost and cover some primary care office visits.

Can I qualify for reduced premiums for a "catastrophic" plan?

If you decide to get a catastrophic plan through the exchange, you will not be able to qualify to lower that premium or the out-of-pocket expenses based on your income like you can with more comprehensive options in the exchange.

Why should I have health insurance?

Nobody plans on getting sick or hurt

We don't plan to get sick or hurt, but that doesn't prevent those things to happening to most of us at some point in our lives. That's why health insurance is so important. It protects you from very high expenses and gets to access to the healthcare that you need when you need it.

Health insurance is there when you need it

Health insurance is a contract between you and the insurance company. When you buy a plan, the insurance company agrees to pay their part of your medical costs when you get sick or hurt.

Health plans also provide coverage for preventive care to help keep you from getting sick or be able to catch illnesses early. Things like vaccines, screenings, physicals, and maintenance prescription drugs are too easy to ignore if you don't have health insurance, which can lead to serious illnesses or conditions.

The average 3-day hospital stay is around $30,000. The average cost for a broken leg is about $7,500. Having health insurance protects you against paying those expenses out of your pocket.

Common Definitions:

Premium: A fixed amount that you pay each month for your health insurance plan. This does not include any out-of-pocket expenses that you might incur when you use plan.

Deductible: The amount you pay before the insurance company pays their part on certain expenses such as hospitalizations or outpatient tests and procedures. Once your deductible is met, the insurance company begins to pay for a portion of your costs. Some plans have low deductibles and some have high deductibles. The deductible amount affects the amount of premium that you'll pay for that insurance plan.

Co-insurance. Simply put, this means you pay part and the insurance company pays part. It generally comes into play after your deductible is met for the year. For example, after the deductible, the insurance company might pay 80% and you might pay 20% of eligible charges until you hit your maximum out-of-pocket amount for the year.

Copayment: Often called a copay; it's a fixed amount that you pay for a service. Copays are commonly charged for services like office visits, emergency room care, or prescription drugs. You pay the copay amount (say, $30 for an office visit) instead of the full charged amount (say, $180 for an office visit).

Out-of-pocket maximum: The most you'll pay if you get sick or hurt. Think of it like your financial "worst-case scenario". This can include you deductible, co-insurance, and under the new law, will include copays on most plans as well.

Benefit Maximum: This is the most that an insurance company will pay out on your behalf in a year or in your lifetime. The Health Reform law prevents benefit maximums on Essential Health Benefits for most new plans, so you can't run out of insurance on those important services.

Without insurance, you put yourself at risk for less adequate treatment, testing and care as well as huge financial debt or bankruptcy.

Do I qualify for a small business tax credit?

Your small business may qualify for employer tax credits for offer health insurance if:

• You have fewer than 25 full-time equivalent employees making $50,000 a year or less. 
• The tax credit is highest for businesses of 10 or fewer employees who make $25,000 a year or less.

How to Qualify

To qualify for the Small Business Health Care Tax Credit, you must meet the employee and income stipulations and pay at least 50% toward the cost of your full time employees' premium costs. The credit is also only available when you purchase coverage through the public exchange SHOP Marketplace.

You can find out more by visiting IRS.gov or consulting with your tax adviser to see if your business might qualify. And if so, how much that credit might be.

What if I'm self-employed (business of one)?

How does the Affordable Care Act affect businesses of one?

If you have a business of one, then you are considered Self-Employed, not "an employer" under the Affordable Care Act. You would not be able to get a group health insurance plan for your business, but you would be able to get an individual or family plan. You could even qualify for reduced premiums or lower out-of-pocket expenses based on your income.

How are health plans changing to help me?

Starting in 2014, no health insurance company can turn you away or charge you more for pre-existing conditions, health history, claims, gender or profession. Pre-existing conditions and pregnancy are always covered. You might qualify for reduced premiums or out-of-pocket expenses based on household income if you purchase a plan through the exchange.

Does a small business have to offer health insurance to its employees?

What's considered a small business under the Health Reform Law?

The Affordable Care Act defines a small business as one with less than 50 full-time equivalent employees.

What's a full-time equivalent employee?

Generally speaking, it's a true employee of your business who works 30 or more hours per week for 120 days or more per year. Employees who work part-time can partially count toward your total number of FTEs for your business even though you do not have to offer a part-time employee benefits.

Are small businesses required to offer health insurance to employees?

No, they are not required. So if your business has less than 50 FTEs, there is no penalty if you do not offer health insurance. Penalties are applied to large businesses starting in 2015.

Small Business Tax Credit

Some small businesses might qualify for a small business tax credit if purchasing a business health plan through the public exchange SHOP.

Offering Small Business Health Insurance 

If a small business offers group insurance, they will still be required to meet:

• Participation (required number of employees on the group plan) 
• Contribution (amount employer pays toward employee's insurance) 
• Employee notification requirement (new under the Affordable Care Act)
• COBRA (if applicable) rules.

An Alternative to Group Insurance

Many small businesses might choose to offer individual insurance plans to employees instead of a business plan. If so, you can use the private exchange to enroll in coverage. No health insurance company can turn anyone away or charge more for pre-existing conditions, health history, claims, gender or profession starting in January 1, 2014.

Contact an exchange expert for more information on what option saves your business the most money.

Do I qualify for Medicaid based on my income?

Qualifying for Medicaid

Qualification is based on income and family size. If you are eligible, you get low-cost or no-cost healthcare.

Medicaid provides health coverage for some low-income people, families and children, pregnant women, the elderly, and people will disabilities. Medicaid programs must follow federal guidelines, but can vary based on the state that you live in.

Medicaid Expansion under the new Health Reform law

The Health Reform law expanded Medicaid to include more people starting in 2014. Before the income qualification was 100% Federal Poverty Level (FPL) and has been expanded up to 138% FPL.

But again, it can vary state-to-state. Not all states decided to expand Medicaid to include more people. If your state did not, then you can qualify for reduced premiums plans through the exchange instead. See our State Decisions page to see if your state expanded Medicaid or not.

And not all states offer Medicaid coverage to lose whose incomes qualify. For example, some states do not offer Medicaid to young adults who are not pregnant or who have not recently given birth.

The best thing to do is visit Medicaid.gov to see if you qualify.

Reduced Premiums and Out-of-Pocket Expenses through the Exchange

If you can't get coverage through Medicaid, you might qualify for lower premiums or lower out-of-pocket expenses when you enroll in a health plan through the exchange. Premiums are based on a sliding scale to keep them affordable for you based on your household income. 

How does the Health Reform Law affect Medicare?

Medicare really isn't affected by the Affordable Care Act. Medicare Part A and Part B benefits will not change under the new Health Reform law.

Medicare supplement policies aren't affected too much, either. The open enrollment for Medicare Advantage plans will stay the same: October 15 - December 7 each year.

Part D Prescription Plans

The only real change comes in Part D Prescription plans. The law calls for shrinking the "donut hole" by providing discounts on prescriptions during the donut hole period.

What do you need to do if you have Medicare plans now?

If you have a Medicare plan now, you do not need to make any changes because of the new law.

If you are retired but under age 65, then you can purchase a private health insurance policy through the exchange until you are eligible for Medicare at age 65.

What will happen to the insurance plan that I have now?

You can keep your current plan

Some will benefit from keeping their current plan for as long as possible, and some will not. Exchange experts can help you determine what is best for you specifically.

Many insurance companies are offering "early renewal options" for the plan you have now. This allows you to renew your plan at the end of the year and lock in your 2013 pricing until December, 2014.

Keeping your current plan

Generally speaking, people and small businesses who are paying lower premiums today because of good health, young age, gender (males usually pay less than females today), or industry (some professions are charged extra today because SIC code) will likely pay higher premiums under ACA. The exception if if you qualify for subsidy based on your income that significantly reduces your premium on a new plan in 2014.

If that's the case, you'll want to keep your current plan for as long as possible.

Not keeping your current plan

For some, this new system will offer significantly lower rates and they will not want to keep their current plan after December 31, 2014.

Generally speaking, those are people and small businesses who are paying high premiums today due to pre-existing conditions, claims, age, gender or industry.

If so, you  might see better benefits for lower premiums in 2014 and beyond and will want to make the switch as soon as it available in January, 2014.

That isn't the case every time, of course, so you should have our exchange experts review your current plan and pricing, compared it to the new plans and pricing, and show you which option offers you the best value. 

Some of the changes starting in 2014

Starting in 2014, insurance companies can't turn you away or charge you more for pre-existing conditions, health history, claims, gender or industry for individual or small business plans. Other changes are made to how plans are priced to decrease the gap between what people pay for insurance.

Another factor is household income. If your household income is less than 400% FPL (which is about $96,000 a year for a family of four) and you do not have access to an affordable group health insurance plan at work, then you could qualify for lower premiums and lower out-of-pocket expenses on healthcare under the new law.

That's what it's best to get your complimentary review from exchange experts, so you can be sure that you are not overpaying for insurance in 2014.

How will my kids be covered?

Kids and young adults are guaranteed to have the same access to quality healthcare under the Patient Protection and Affordable Care Act.

Medicaid

Based on household income, children might qualify for Medicaid coverage in their state.

Medicaid is a low-cost or no-cost insurance for low income families. Historically, Medicaid qualification was under 100% Federal Poverty Level (FPL), but the new Health Reform law called for Medicaid to be expanded to include more people (incomes up to 138% FPL).

Not all states chose to expand Medicaid, though, so check with Medicaid.gov for eligibility and applying for coverage.

CHIP

The Children's Health Insurance Program, referred to as CHIP, provides health coverage for nearly 8 million children whose family incomes are too high for Medicaid but still can't afford private insurance. Visit Medicaid.gov for more information on CHIP in your state.

Covered on parent plan until age 26

Young adults can be covered on their parents' health insurance plan up to age 26 under the new law. It doesn't matter if the child is married or a student,  he or she can still be a dependent on his/her parent's health plan until age 26.

Private Insurance 

Young adults age 19 or older can also have their own insurance - either through their job or by enrolling in a private plan.

Young adults might qualify for lower premiums or lower out-of-pocket expenses on insurance plans purchased through the exchange. It is based on income to keep it affordable for you.

"Catastrophic" Plans

If you are younger than 30 years old, you could get a catastrophic plan through the exchange, in addition to the four other choices: Platinum, Gold, Silver, Bronze. Learn more about the "catastrophic" plan here.

Are my pre-existing conditions covered?

Have you had trouble getting health insurance or had limited coverage because of pre-existing health conditions? Good news. All that is about to change.

Pre-exsiting conditions won't keep you from getting coverage

Starting in 2014, health insurance plans can't refuse to cover you or charge you more premium each month just because you have a pre-existing condition. Coverage for pre-existing conditions begins immediately.

And once your covered, your plan can't refuse to cover treatment for pre-existing conditions or charge you extra at renewal because of how often you used your plan.

All this is true even if you've been turned down in the past for pre-existing conditions.

An exception to the rule: Grandfathered individual and family health plans

Grandfathered plans fall under the old rules and do not have to cover pre-existing conditions. These would be plans that you purchased yourself - not through an employer or government plan.

You can switch to a new plan starting January 1, 2014 to have your pre-existing conditions covered. Pregnancy is also a covered benefit then, along with 10 Essential Health Benefits - all with no yearly or lifetime benefit limits so you can't run out of insurance for core care.

Don't miss Open Enrollment

Open Enrollment for the new plans through the exchange begins October 1, 2013 and will continue through March 31, 2014. The first available effective date for coverage to start is January 1, 2014.

The first year's Open Enrollment is longer to give more people time to shop the new plans. Next year's Open Enrollment (and beyond) will be October 1st through December 31st with new plans becoming active on January 1st.

How can I lower my health insurance premiums?

By working with the private exchange, our experts will create a financial plan specific for you or your business that saves you the most money.

The rules and pricing that apply to individual and small business (less than 50 employees) today will be changing pretty drastically under the new law.

Some of the changes to individual and small business plans include:

• No insurance company can turn you away or charge you more for pre-existing conditions, claims, gender or profession. 
• The rate table has to compress -  lessening the difference between what older and younger pay for insurance. 
• Insurance companies must justify premium increases and limit their profit margins. 
• Benefits will also change to limit your out-of-pocket expenses, a core set of Essential Health Benefits must be included in all plans, no lifetime or yearly limits on Essential Health Benefits so you can't run out of insurance, and you must have 100% coverage for preventive services, just to name a few.

Qualifying for reduced premiums or lower out-of-pocket expenses

Based on income, you might qualify for tax subsidies to reduce your premium or out-of-pocket on certain plans purchased through the exchange. Think of a tax subsidy kind of like a discount that is applied immediately to lower the amount you pay for insurance. You might also qualify for reduced out-of-pocket expenses to help lower deductibles, copays and more.

These changes will cause some people to save a significant amount of money while getting better coverage. For some, they will pay more under the new rules.

Some might pay more under the new law

If you are someone who has been paying very high premiums because of pre-existing conditions, age, gender or industry, then you are likely to see some premium relief, especially if you qualify for a tax subsidy.

But if you are paying very low premiums today because of preferred health, age, gender or industry, then you might see your premiums increase, especially if you do not qualify for any tax subsidies or small business tax credits.

The best thing for you to do is to let our experts review your current insurance plan and compare it to your new coverage options. We will advise you on what offers you the most benefit and most premium savings.

 

Am I required to have health insurance?

The simple answer is "yes".

Starting January 1, 2014, there is an individual requirement to have qualified health insurance. Qualified health insurance can include Medicaid, Medicare, CHIP, Tri-Care, or health policies issued through an employer or to you personally. This is sometimes referred to as the "Individual Mandate".

Exchanges can help

Exchanges have been created to offer low-cost solutions to the health insurance requirement to make sure that everyone has access to affordable coverage options.

Just like most every rule, there are exceptions. Some people will not have to pay a penalty for not having insurance based on exceptions such as income level or religious objection. Learn more about the requirement and exceptions here.

If you do not have health insurance and do not qualify for an exception, you will be subject to a penalty starting in 2014. You can learn more about the penalties here.

How will the exchange help me or my family?

What is an exchange?

An exchange, sometimes called a marketplace, is a website where you can view your coverage options in one place. You can easily compare plans and pricing side-by-side, select what you want, and only enroll in the coverage you need.

How the exchange can help

Here are a few examples:

1) Simplifies insurance so it's easier to understand your choices.

2) No health insurance company can turn you away or charge you extra premium because of pre-existing conditions, claims, health history, gender or profession

3) Pre-existing conditions, pregnancy and 10 Essential Health Benefits must be covered by all plans

4) Many will save money on health insurance through the new pricing rules in the exchange

5) Many will qualify for tax subsidies (used like discounts toward new policies) based on household income to lower the premium and out-of-pocket expenses you pay on your health insurance in the exchange

6) There are no lifetime or yearly maximums for Essential Health Benefits so you can't run out of insurance

7) No health insurance company can terminate your coverage because you get sick

8) Health insurance companies have to justify their premiums and rate increases

9) Access to top healthcare experts for advice and service

10) All policies issued through the exchange are compliant with the Patient Protection and Affordable Care Act law