Obamacare: News, Rules, and Updates
Find out everything you need to know about Obamacare! Money Girl outlines new rules and updates so you can comply with the healthcare law and make sure you and your family are covered.
If you thought the health care reform law (also known as Obamacare) was already confusing, there have been some recent changes that make it even more perplexing.
In this episode I’ll tell you what you need to know about the rules so you meet key deadlines and comply with the law.
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What Is Obamacare?
Obamacare is a nickname for The Patient Protection and Affordable Care Act (ACA), which passed in 2010. It offers Americans new benefits, rights, and protections for healthcare.
Most notably, when you shop for health insurance, you may qualify for a subsidy that reduces the cost of coverage, depending on your income and family size. But the law also requires you to have insurance starting in 2014.
What Is the Obamacare Penalty?
Did you get that? If you don’t have health insurance you’re breaking the law, unless you qualify for a health care exemption.
The penalty for not having health coverage is $95 per adult and $47.50 per child, or 1% of your income, whichever is higher. However, individuals won’t be penalized on the first $10,000 of income and families won’t be penalized on the first $20,000.
Additionally, the Obamacare penalty does have a ceiling. It can’t be more than the average annual cost of the least expensive health plan, but we don’t know what that amount is yet.
Let’s say you’re a single person who earns $40,000. If you decide to opt for the penalty instead of buying health insurance, your penalty would be $300 ($40,000 – $10,000 = $30,000 x 1%) in 2014. While this may seem low, the penalty does increase substantially in 2015 and 2016.
When you file your income tax return, the penalty gets added to the amount of tax you owe. Or, if you overpaid tax throughout the year, the penalty will be subtracted from your refund.
Who Qualifies for Obamacare?
As I previously mentioned, the health care law requires every American to have health insurance, no matter if you’re employed, unemployed, underemployed, or self-employed.
If you lose your job-based health insurance, you have 2 options: COBRA coverage or an Obamacare plan. COBRA is a federal law that allows you to keep your plan for up to 18 months after your employment ends. It’s typically much more expensive because you must pay the full monthly premium, including any amount that your employer had contributed before.
Here are 3 changes that have been made to Obamacare that you should know:
Change #1: Canceled Health Plans Might Be Allowed
Not only does the ACA require you to have health insurance starting in 2014, but it says that you must have a qualified plan with a minimum set of benefits. Problem is, getting a new and improved plan turns out to be more expensive for many Americans, and President Obama got a lot of flack about it.
As a result, the government recently announced that insurers could allow you to keep your existing health plan through 2014, even if it doesn’t have the minimum benefits to comply with the ACA.
But “could” is an important part of the announcement. Insurance is regulated by states, not the federal government. So the final call on this proposed change is up to the insurance commissioner in each state. Then it’s up to insurers who offer policies in those states, whether renewing canceled policies is a smart business move.
The bottom line is that if your insurance company has told you that your health plan is being canceled, you may still be able to keep it. Just remember that you may not get some of the benefits of other plans under Obamacare.
My recommendation is to shop around and find out if you can get a qualified plan with more coverage for a lower price.
Change #2: High-Risk Pool Coverage is Extended
The Obama administration is also extending coverage for those enrolled in state high-risk pools. These are private plans organized by states to cover certain individuals with pre-existing medical conditions who previously couldn’t get health insurance on the open market or through an employer.
Starting in 2014, Obamacare prohibits insurers from denying you coverage or raising your rate if you have a pre-existing medical condition. So, high-risk coverage was supposed to end on December 31. But it will now continue through the end of January to give high-risk enrollees more time to transition into regular health plans.
Change #3: There’s More Time to Get Enrolled
Another important change to Obamacare is a delay in the deadline for enrolling in coverage. It was moved back from December 15 to December 23 of 2013 after the government’s infamous botched website launch made it difficult for many to shop.
If you miss the deadline, you can still get coverage because open enrollment lasts until March 31. However, if you want coverage to begin on January 1, you must sign up by December 23, 2013.
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About the Author
Laura Adams received an MBA from the University of Florida. She’s an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers is her newest title. Laura’s previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.
