Article at a Glance
Starting in 2014 health coverage will be required for most people. To make it affordable, the federal government will be providing financial assistance to those who qualify.
Am I required to have health insurance coverage?
Under the Affordable Care Act (ACA), most U.S. citizens and legal residents must purchase health insurance coverage starting in 2014. If you do not have health insurance you will have to pay a penalty. The penalty will either be a specified dollar amount or a percentage of income, depending on whichever is the greater amount.
The penalties will be phased in as follows with continued annual increases in 2016:
2014: 1% of income or $95
2015: 2% of income or $325
2016: 2.5% of income or $695
To find out whether or not you are required to have health insurance or if your current plan meets the requirements, visit the Kaiser Family Foundation’s info graph.
Will I qualify for financial assistance?
The ACA increases the number of people who will qualify for Medicaid or financial assistance.
Medicaid is a joint federal and state program that provides benefits to disabled and low-income individuals. Starting in 2014, states can expand Medicaid to cover people between the ages of 19 up to 65 with incomes up to 138% of the poverty line. The federal government will give states funding to cover the additional costs. According to a ruling by the Supreme Court, states can decide whether or not they want to participate. There is no deadline for deciding and some states like Utah are still deciding if they will participate. In April of this year, Utah’s governor and state leaders were leaning towards not participating. A committee is currently analyzing the issue and their recommendation should be forthcoming by the end of summer.
It is estimated that 26 million Americans will be eligible for tax credits to help pay health insurance premiums. Unlike traditional tax credits that come after you file your taxes, this tax credit will be sent directly to your insurance company to lower your monthly health insurance payments right away.
In October you will be able to fill out a Marketplace application that will allow you to see what you qualify for.
To get an idea of what you may be eligible for before then, visit the Kasier Family Foundation’s Subsidy Calculator and the Frequently Asked Questions section.
In the next article we will cover some frequently asked questions like why insurance premiums are expected to go up and how health care reform will affect existing employer plans.