Consumers are encouraged to apply for coverage through a health insurance marketplace if they:

•     Currently do not have health insurance
•     Don’t have access to affordable health insurance through their employer (if the employee’s portion of the health insurance premium exceeds 9.5% of their annual household income, the coverage is NOT considered affordable.)
•     Purchase their own health insurance
•     Own a small business
•     Already have a pre-existing health condition that prevented them from obtaining a major medical plan in the private market

One of the main benefits of exploring individual health insurance options from a public on-line marketplace is that financial assistance may be available to make the cost of the insurance more affordable.  Two types of financial assistance are available for the purchase of a private health insurance plan; federal premium tax credits and cost-sharing subsidies.

Eligibility for financial assistance for a private health insurance plan will be dependent upon the total number of household members and the annual income of the household.  Consumers who have an annual gross income of 400% or less of the Federal Poverty Level ($45,960 for an individual and $94,200 for a family of four) will be eligible for premium tax credits. These credits can be used toward the purchase of any of the Metallic Plans (Bronze, Silver, Gold and Platinum) options.  Credits can be advanced to the health insurance carrier to reduce the net monthly premium responsibility of the consumer, or these credits can be received as a refund at the end of the tax year.  Please note that any premium tax credits received must be used to purchase a health insurance plan from the public health insurance marketplace.

Individuals and families with an annual income of 250% or less of the Federal Poverty Level will also be eligible for additional cost-sharing subsidies.  These subsidies can be used to help offset the maximum annual out-of-pocket costs, including deductibles, co-insurance and co-pays.  In order to take advantage of cost-sharing subsidies, eligible consumers must purchase a Silver level plan from the public health insurance marketplace.  

For those consumers interested in applying for financial assistance, please keep in mind that all of the information you provide concerning your household and annual income will be verified with several governmental agencies.  These agencies include, but are not limited to:  Homeland Security, the IRS, the Social Security Administration, and the Department of Veterans Affairs.  If it is determined that there are any discrepancies in the information you disclosed on your initial application, you will be asked to provide additional verification.

It is imperative that you provide the most accurate financial information possible on your application.  If your actual income was more than what was disclosed on your initial application, you will be asked to repay any subsidies that you were not entitled to.  On the other hand, if your income was less than what was disclosed on your application, and it is determined that you actually qualified for more financial assistance than you received, you will then be entitled to an additional tax refund at the end of the tax year.

To expedite the application and enrollment process, you will need to have the following information handy:

•     Social security number and date of birth for each person included on the application.
•     Current employer information for each applicant.
•     Most recent paystubs that reflect year-to-date earnings and most recent tax returns showing the deductions you claimed for the previous tax year.
•     Insurance carrier information, policy numbers and effective coverage dates for any health insurance policies that are currently in place.

Some consumers may not be comfortable disclosing all of the personal and financial information that is required for the public health insurance marketplace application process.  For some, it might make more sense to secure their health insurance coverage from a private health insurance marketplace.  When using this option, financial assistance will not be offered.  However, the application and enrollment process will only take a few minutes and no financial information will be asked of you.  Some of us value our privacy enough that we are willing to pay a little more to protect it.

The new Affordable Care Act law has definitely become a source of confusion and frustration for many consumers.  When at all possible, try to obtain the assistance of a Certified Agent to help you navigate through all of your available health insurance options.  You will also want to consult with your Tax Advisor if you need any clarification regarding the possible tax penalties involved for not purchasing a Qualified Health Plan. The more information you have now, the less overwhelming the final transition to Healthcare Reform will be on January 1st.

Additional Resources:

www.healthcare.gov
www.coveroregon.com
www.wahbexchange.org
www.kff.org

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