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.