Healthcare Reform

Save on your premiums

Individuals and Small Businesses may be eligible for a tax credit under ACA healthcare reform laws.  Thus, the credit is applied as a discount on your monthly insurance premium. Accordingly, to see if you are eligible for a tax credit, please use the Subsidy Calculator provided by the Health Insurance Marketplace.  Or, if you are a business, use the Small Business Tax Credit Calculator provided by the Health Insurance Marketplace.  In any case, both businesses and individuals must purchase benefits through the Health Insurance Marketplace to secure their tax credit.  However, note that you must purchase benefits through the Health Insurance Marketplace to secure your premium discount.

Avoid tax penalties

EMPLOYERS:  Employers who have more than 50 full-time equivalent employees must offer those employees benefits that pay for 60% of the minimum essential benefits.   Accordingly, if you are in non-compliance, you will incur a penalty of $2,140 per year multiplied by the number of full-time employees, and excludes the first 30 employees. Additionally, the penalty is increased each year by the growth in insurance premiums.  However, note you may also incur a penalty when at least one of your employees receives a premium tax credit in the Health Insurance Marketplace (Exchange).

INDIVIDUALS:   Following is information on the Individual Mandate of the ACA.  However, note the tax penalty for individuals has been recently repealed.  The penalty, prior to 2019, affects individuals who fail to obtain qualifying health insurance.  Individuals can have coverage through their employer, or through an individual policy to satisfy the requirement.  Accordingly, if  you do not have qualifying health insurance, the tax penalty will be $695 for adults. Additionally, the penalty is $347.50 for each child. However, the maximum family penalty is the greater of 2.5% of income, or three times the adult penalty, which is $2,085.  Consequently, your penalty will be applied on your annual tax return.

Underwriting guidelines of the ACA

• There is no longer a pre-existing condition clause.  In other words, insurance companies can not increase rates or deny coverage because of a pre-existing condition.
• Your dependents can remain on you policy until they turn 26 years old.
• Insurance companies can not consider gender when setting rates.
• Employer renewals must be based on the same rates as new business.
• The waiting period for employer benefits should not exceed 90 days.

Your employer paid benefits must comply with the “Essential Benefits” of ACA. Specifically, to be in full compliance with the law, your insurance policy must cover at least 60% of the costs of the following essential benefits.  If you purchase an individual policy from the marketplace, it’s likely that your policy will also contain these benefits.

• Ambulatory patient services
• Emergency services
• Hospitalization
• Maternity and newborn care
• Prescription Drugs
• Mental health and Substance Abuse disorder services
• Rehabilitative and habilitative services and devices
• Pediatric services, including oral and vision care
• Preventive and wellness services, and chronic disease management