Health Care Reform Implementation
There are many major aspects of President Obama’s health care legislation that are slated to go into effect in 2014. Here is what you need to know to comply with the law:
Minimum Essential Coverage: Effective January 2014, the law requires individuals to maintain “minimum essential coverage” each month. Minimum essential health insurance coverage includes individual market policies, job-based coverage, Medicare, Medicaid, CHIP, TRICARE and certain other coverage. If coverage is not maintained, individuals and households will be subject to a tax.
New York State Health Exchange: From October 1, 2013-March 31, 2014, New York State residents may apply for individual market coverage through the New York State Health Benefits Exchange. If you enroll in a health insurance plan between October 1, 2013 and December 15, 2013 and make your first premium payment, your new health coverage starts January 1, 2014. During the rest of open enrollment, if you enroll between the 1st and 15th day of the month and pay your premium, your coverage begins the first day of the next month. More information, including information on finding an In Person Assistor/Navigator, Certified Application Counselor (CAC), or Broker to assist you in choosing a policy, can be found at www.nystateofhealth.ny.gov or by calling 1-855-355-5777.
Federal Premium Subsidies: Individuals and families purchasing health insurance on the exchange may be eligible for subsidies. Premium subsidies will be available on a sliding scale for people with incomes of up to four times the federal poverty level—currently $45,960 for a single person and $94,200 a year for a family of four. There will be additional subsidies to cover out-of-pocket expenses for those earning less than 250% of the poverty line: $28,725 for a single person and $58,875 for a family of four.
Tax: If minimum essential coverage is not maintained, individuals and households will be subject to a tax. For a given household, the tax applies to each individual, up to a maximum of three. The tax is prorated by the number of months without coverage, though there is no penalty for a single gap in coverage of less than 3 months in a year. Exceptions will be made for certain religious groups, undocumented immigrants, those without coverage for less than three months, those serving prison sentences, those for whom the lowest-cost plan option exceeds 8% of annual income, and those with incomes below the tax filing threshold. The schedule of taxes is as follows:
• 2014: The higher of $95 per person (up to 3 people, or $285) OR 1.0% of taxable income.
• 2015: The higher of $325 per person (up to 3 people, or $975) OR 2.0% of taxable income.
• 2016: The higher of $695 per person (up to 3 people, or $2,085) OR 2.5% of taxable income.
• After 2016: The same as 2016, but adjusted annually for cost-of-living increases.
Delay of Employer Mandate: Implementation of the law’s employer mandate has been delayed until 2015. At that time, employers of 100 or more full-time employee equivalents will be required to provide health insurance or be taxed approximately $2,000 per full-time employee (defined as an employee who works 30 or more hours per week), excluding the first 30 employees. The employer mandate for businesses employing between 40 and 100 full-time employee equivalents has been delayed until 2016.
For more information, you can visit the Obama Administration’s website on health care reform (www.healthcare.gov) or call 1-800-318-2596.
To read my views on health care reform, click here.