Although the employer mandate for providing health insurance coverage to workers under the Affordable Care Act (ACA) was postponed for one year — until January 1, 2015 — the rules for individuals remain in place, at least for the foreseeable future. What are your main rights and responsibilities under the ACA? Here’s a brief summary.
Essentially, unless you are already covered by an employer’s plan, Medicare, or Medicaid, you’re required to obtain coverage on your own or pay a penalty. The plan is to have affordable options available through state-operated exchanges. Some low-to-moderate income families may be eligible for various subsidies.
Insurance exchanges – The health care exchanges in 14 states, as well as the federal government’s default exchange, opened for business on October 1, 2013. Coverage is available as of January 1, 2014, for an open enrollment period ending on March 31, 2014.
The plans offered under the health care law are divided into four categories with metallic names: platinum, gold, silver, and bronze. Premiums range from the highest for a platinum plan to the lowest for bronze. With a platinum plan, out-of-pocket costs such as co-payments are lower, while these costs are higher for bronze plans.
Tax credits – Individuals can apply for subsidies in the form of tax credits and other reductions to offset the cost of insurance purchased on an exchange. (The tax credits are sent to the insurance companies so individuals don’t have to pay up-front.) Credits are available to individuals and families with income between 100% and 400% of the federal poverty level. Therefore, the upper threshold in 2013 is $45,960 for an individual and $94,200 for a family of four. However, even if your income falls below the threshold, you’re not eligible for subsidies if your employer’s plan meets the coverage standards.
Penalties – Beginning in 2014, failure to obtain coverage results in a penalty equal to the higher of 1% of your annual income or a flat fee of $95 per person. The fee for uninsured children is $47.50 per child, up to a maximum of $285 per family. The IRS has been given the responsibility of enforcing the penalties.