Questions About The Affordable Care Act

QUESTION: What is a subsidy and how do I know if I qualify?

ANSWER: In the context of health reform, a subsidy is government assistance to help you afford health insurance. Under the Affordable Care Act, the government will grant subsidies in the form of premium tax credits to people who fall within a certain income level. These tax credits will be applied up-front to the monthly premium you pay for coverage.

As of 2014, you may qualify for a subsidy if your household income is between 133 percent and 400 percent of the Federal Poverty Level (FPL). The amount of tax credit you’ll receive will be determined by where you fall within the FPL guidelines.

Tax credits can only be applied to qualified health plans that are purchased through a government health insurance exchange or qualified online insurance marketplace partnering with a government exchange.

QUESTION: How do I know if I qualify for a health insurance subsidy?

ANSWER: Consumers earning less than 400% of the federal poverty level (about $46,000 for a single person or $94,000 for a family of four) may be eligible for a government subsidy to help them buy coverage in 2014. Whether you receive a subsidy – and the amount of any subsidy you receive – may also depend on the cost of coverage offered in your area. To receive a subsidy, you must also be a legal resident of the United States, not incarcerated, and not eligible for other forms of minimum essential coverage (for example, coverage through an employer-based plan or through Medicare or Medicaid).

QUESTION: Where can I figure out what my subsidy will be?

ANSWER:  A final determination of your subsidy eligibility will be made by the government during the application and enrollment process.

QUESTION: If I qualify for a subsidy, will I pay less for my insurance or does the government send me a check?

ANSWER: If it’s determined that you are eligible for a government subsidy during the application and enrollment process, you will have the option to have your subsidy applied towards your health insurance premiums on a month-to-month basis or to claim it instead on your federal tax return. If you qualify for an additional subsidy to help lower your copayments and deductibles, those funds will be provided directly from the government to your health insurance company.

QUESTION: When applying for a subsidy, do I need to submit a tax form to prove my income?

ANSWER: Subsidies for this year are based on your modified adjusted gross income for the current year. You should use your best estimate of what your household modified adjusted gross income for the current year will be. Any discrepancy in the amount of subsidy you were due and the amount you actually received will be reconciled in your federal tax return.

QUESTION: What happens if I get a subsidy but don’t really qualify? Or what happens if my income changes after I’ve already received a subsidy?

ANSWER: If you applied and received a government subsidy this year, any amount you overpay or underpay will be reconciled when you file your federal taxes. If your income increases, you may have to pay the government back for all or a portion of the subsidies you received. The government will take what you owe out of your tax return, or you may have to write a check to the Internal Revenue Service. If you opted not to have your subsidy applied towards your monthly premiums but instead to get your subsidy when you file your income taxes, the correct subsidy amount will be determined when completing your tax return. 

If your income changes mid-year, you have the option of going back to the government exchange (or the other site where you originally applied for your subsidy) to have your subsidy amount adjusted for the remainder of the year, based on your updated income information.


QUESTION: What if I’m offered coverage through my employer but it’s too expensive? Can I still qualify for a subsidy?

ANSWER: Generally, you cannot use a subsidy to pay for the cost of employer-based health insurance. You may be eligible for a government subsidy if your employer’s coverage is considered unaffordable (that is, if your share of your individual premium is more than 9.5 percent of your household income for the current year) or if it is considered inadequate (that is, if it covers less than 60 percent of the cost of covered benefits).
QUESTION: What if I still can’t afford subsidized insurance, are there other options?

ANSWER: If you’ve explored your options with a licensed agent and still cannot afford coverage even with a subsidy, double-check to see if you may qualify for Medicaid. The government health insurance exchange for your state can provide you with information on Medicaid coverage. Otherwise, if you go uninsured for more than three consecutive months in one year, be aware that you may face a tax penalty on your federal tax return $695 a year per adult and $347.50 per child (up to a maximum penalty of $2,085 per family) or 2.5% of your taxable household income, whichever is greater. If you don’t earn enough money to be required to file a federal tax return, you will not be subject to a tax penalty.

QUESTION: If I get a health insurance subsidy, is that the same as being on Medicaid?

ANSWER: No. Medicaid is a government-sponsored health insurance program. By contrast, government health insurance subsidies are provided to qualifying consumers to help them purchase health insurance for themselves in the open market.

QUESTION: Am I required to have health insurance next year? 

ANSWER: Most individuals will be required to obtain qualified health insurance coverage (or minimum essential coverage which carriers the essential health benefits dictated by the law) or pay a tax penalty to help offset the costs of caring for uninsured Americans. If affordable coverage is not available to an individual, he or she may be eligible for an exemption.

The tax penalties start small in 2014 and increase over time. By 2016, those without coverage will pay a tax penalty calculated at the greater of 2.5% of their taxable household income or $695 a year per adult and $347.50 per child (up to a maximum penalty of $2,085 per family). Beginning in 2017, the tax penalties will be increased by the cost-of-living adjustment. Although it is important to note that the tax penalty doesn’t apply if you have a gap in coverage of less than three consecutive months in any given year.


QUESTION: Do I get to keep my doctor if I get a subsidy?

ANSWER: The answer depends on whether your doctor is within your health plan’s network of accepted providers. If your doctor isn’t in the plan’s network, you’ll likely pay a higher amount towards your medical bills. In some cases, your plan may pay nothing at all when you visit an out-of-network doctor or hospital.

QUESTION: Can I choose from the same selection of health insurance plans if I get a subsidy?

ANSWER: No. Subsidies can only be applied to qualified health plans that are purchased through a government health insurance exchange or through a qualified online insurance marketplace partnering with a government exchange. Insurers are offering additional plans outside of exchanges which will still meet the coverage requirements of the Affordable Care Act, but these off-exchange plans are not eligible for purchase with a subsidy.

QUESTION: Where do I go to get a subsidy? Am I limited to my state’s government health insurance exchange?

ANSWER: Since subsidy determinations can only be made by the government, you will need to work with your state’s government exchange – or through a licensed agent or qualified online insurance marketplace partnering with a government exchange – in order to obtain a subsidy.

QUESTION: Can I get a subsidy through my local insurance agent?

ANSWER: If your local licensed health insurance agent has received the proper certification, he or she can help you enroll in a subsidy through the government exchange in your state.


QUESTION: Are subsidized insurance plans the same as unsubsidized insurance plans?

ANSWER: Health insurance plans are not subsidized per se. Rather, consumers meeting certain qualifications may be eligible for a subsidy when purchasing a plan. Qualifying consumers who want to use their subsidies to help cover the cost of health insurance will be limited to plans eligible for purchase with a subsidy. These plans are available through the government health insurance exchange in your state or through licensed agents and other websites authorized by the exchange to assist subsidy-eligible consumers.

Though some plans are eligible for purchase with a subsidy and others are not, all current health insurance plans are required to provide coverage for the same suite of “essential health benefits.” The degree of coverage may vary between “bronze,” “silver,” “gold,” and “platinum” plans. Plans offered through your state exchange may also be available off the state exchange for purchase without a subsidy. However, there are many ACA-compliant plans that are only available outside of government exchanges and only without a subsidy. These plans may differ from plans offered through an exchange – for example, in the scope of the provider network they offer.

QUESTION: If I’m eligible for a subsidy, am I required to buy an exchange plan? Can I choose an off-exchange plan instead and not use a subsidy at all?

ANSWER: Being eligible for a subsidy does not mean that you are required to use one. You can choose to forgo your subsidy and purchase an off-exchange plan instead. This is an individual decision and depends on your personal preferences. Things to consider include the amount of subsidy for which you qualify, and whether your preferred doctor is a participant in the provider network of any plan you may be considering. A licensed agent from InsureSphere can help you understand your different options.

QUESTION: What has changed in 2014?

ANSWER: Many provisions of the Affordable Care Act started in 2014, but perhaps the biggest change is the Individual Mandate that requires most individuals who can afford it to have a health plan that meets specific coverage standards.

In 2014 and going forward, if you don’t have employer coverage and choose not to buy health insurance on your own, or if you enroll in a plan that doesn’t meet the coverage criteria, you may be required to pay a penalty.

A second change that makes the Individual Mandate more appealing is the availability of federal subsidies to make individually-purchased health insurance more affordable for qualified consumers.

Something else that is different is the establishment of an open enrollment period — the next one starts November 15, 2015, and continues through February 15, 2016.

Outside of the open enrollment period (which occurs annually), you’ll only be able to enroll in an individual health insurance plan when a qualifying event occurs. These events include the birth of a child, marriage, or the loss of employer-based health insurance coverage, among other things.


Q: Is it true that I can no longer be declined for coverage based on my medical history?

A: Yes, that is true. Starting January 1, 2014, insurers can no longer decline your health insurance application based on your medical history. It’s true that you cannot be dropped from coverage if you get sick, and insurance companies can no longer impose a lifetime dollar limit on coverage for most medical services.
Q: Can I be required to pay more for my coverage based on my health status now?

A: You cannot be rated up based on your health status, but you can still be required to pay higher premiums based on your age, tobacco use, and where you live.


Q: What is a Health-Care Exchange and how will it work?

A: Under the Affordable Care Act, exchanges are government-sponsored websites where individuals, families and small businesses can go to shop for and purchase health insurance. They first launched in October 2013, for coverage starting in January 2014.

While exchanges aren’t the only places to buy coverage (you can still shop with local agents or online marketplaces like InsureSphere.com), subsidies are currently processed only through exchanges. Every health insurance plan in the new exchange will offer comprehensive coverage, from doctors to medications to hospital visits. You’ll be able to compare your insurance options online, based on price, benefits, quality, and other features that may be important to you.

QUESTION:Can I work with InsureSphere to purchase a health insurance plan? 

ANSWER: Yes, licensed agents are the only people legally able to advise you regarding health insurance options and benefits when you’re trying to choose the right health insurance plan for your specific needs. By law, working with a licensed agent cannot cost you extra. Prices for each available plan have agent commissions built into the cost. So you’ll pay the same whether you use a licensed agent or not.

Affordable Care Act navigators are not able to advise you on which plans to purchase. By law, navigators can only assist you in determining whether or not you’re eligible for a subsidy, and they can help you through the application process.

QUESTION: Can I keep my non-grandfathered plan? 

ANSWER: Whether or not you can keep your plan or will need to reapply for health insurance in 2014 and going forward varies from insurer to insurer. Some of the insurers have indicated that they’ll transition people in one of three ways:

  1. Inform and Automatically Enroll — The insurer will make you aware that it’s moving you to a metallic benefit plan and will transition you automatically to that new plan with no action required on your part.
  2. Inform and Actively Reenroll — The insurer will contact you and assist you in actively reenrolling in a new metallic benefit plan.
  3. Only Inform — The insurer would simply make you aware that your current plan may not qualify you to avoid the tax penalty next year and you have the option to change plans, but the insurer may elect to let you remain on your current plan

QUESTION;Will there be “subsidy only” doctors? 

ANSWER: It’s unlikely that your doctor will know if your health insurance plan is subsidized or not. All the doctor is likely to know is the name of your insurance company.

In most cases, access to doctors will work much like it does today. Health insurance plans contract with networks of doctors, specialists, and hospitals.This network is generally referred to as your plan’s “provider network.” Some plans have very limited provider networks, and others have very large provider networks. More restricted networks often cost less, and networks with more choices often cost more. This is not likely to change in 2014 or beyond. But plans may be marketed and priced more aggressively based on the size of their provider networks.

QUESTION: What happens if I have a lapse in coverage in 2014? 

ANSWER: So long as you meet eligibility requirements, a lapse in coverage will not prevent you from being able to apply for health insurance during the open enrollment period. Outside of open enrollment, your ability to apply for health insurance may vary from state to state. And it may be limited to a “qualifying event,” such as, but not limited to, the loss of a job, a marriage or divorce, a move, or the birth of a child.

QUESTION: Can my application be declined? 

ANSWER: Starting on January 1, 2014, insurance companies will not be able decline your application for health insurance because you have a pre-existing medical condition or for any other health-related reason.

QUESTION: How does Obamacare affect my HSA? 

ANSWER: The Affordable Care Act did make some changes to Health Savings Accounts — also called HSAs — and how they will work. According to the law eliminated a person’s ability to use money in his or her HSA account to buy over-the-counter drugs. The second big change is that the law increased the penalty for withdrawing funds from your HSA before you reach age 65. The early withdrawal penalty increased from 10% to 20%.

QUESTION: Do I need to be on the same plan as my spouse? 

ANSWER: No. There is no requirement in the Affordable Care Act that spouses be on the same plan. But if you want to qualify for a premium tax credit, or subsidy, to lower the cost of your insurance, be aware that subsidies are based on your total household income level. So even though your spouse will not be covered by the subsidized insurance plan, his or her income will be included when determining the level of subsidy you are eligible for.

QUESTION: Can I get insurance for my kids under Obamacare and pay the tax for myself? 

ANSWER: You can buy insurance for your kids without insuring yourself, but you and your spouse will be subject to a tax penalty if you do not have qualifying health coverage. When it comes to buying insurance for your kids, effective January 1, 2014, the Affordable Care Act requires any insurer that offers a metallic level plan to an individual adult must also make that plan available to an individual child — provided the child has not reached his or her 21st birthday at the beginning of the plan year.

QUESTION:  What is actuarial value or AV?

ANSWER: Actuarial value is aa percentage of total average costs for covered benefits that a plan will cover. So a plan with 70% actuarial value would typically cover 70% of the costs and the customer would typically be responsible for 30% of the costs