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How will the Health Insurance Marketplace (Exchange) affect you?

Believe it or not, 2013 is half over. As we begin the 2nd half of the year, there are some big changes coming that may affect you whether you realize it or not. It wasn’t long ago when we had a big divide in our country over the healthcare reform and the passing of PPACA (Obama Care) in 2010. Since then, there have been small changes occurring in the health insurance industry, and most likely, your health insurance policy. However, a lot of these changes have gone unnoticed by most people.

That is all about to change! Starting January 1, 2014, four of the biggest changes in the reform legislation are set to be implemented. This is when the rubber will meet the road and it all goes from theory into practice. Whether or not this is a big success or another financial burden on our national debt, only time will tell. But, what’s important now is to understand what is expected of you and/or your business and which decisions are best for you.

The 4 biggest changes are:

  1. Individual Mandate- The PPACA requires all American citizens and legal residents to purchase qualified health insurance coverage. If not, then you will pay a minimum fine of $95 up to 1% of your household income. The fines increase in 2016 to $695 per person or 2.5% of income up to $2085.
  2. Guaranteed Coverage- Coverage cannot be declined due to pre-existing conditions. For persons who have been unable to get coverage on the individual market due to pre-existing health conditions, they will now be able to get the same coverage and price as a healthy person the same age (smokers are charged additional).
  3. Health Insurance Marketplace (Exchange)- For individuals and small businesses, the Federal government and some states will provide an Exchange to access health insurance in addition to the traditional method of an insurance agent/broker. In fact, some insurance agents/brokers will provide plans both inside and outside the Federal or State Exchange. The two important points are 1.) an individual can only qualify for a subsidy and 2.) a small business can only qualify for the small business tax credit through a Federal or State Exchange. The Enrollment for the Exchanges opens October 1st this year.
  4. Pay or Play Rule- For businesses with 50 (FTE/Full-Time Equivalent) employees or more, an affordable “minimum essential coverage” health plan must be provided to their employees or pay a fine. If a business does not provide qualified coverage, the penalty will be the lesser of ($2000 times the # of F/T employees minus 30) or ($3000 times the # of F/T employees that obtain a subsidy for coverage through the Exchange). This penalty is determined on a monthly basis so will pay 1/12 those amounts times the # of months they are not in compliance.

These are the biggest, but far from the only, changes that are coming in 2014. How will you be affected? Do you know the best approach to take? For some, you may not see much difference. For those individual and businesses who want answers to your questions, my suggestion is to speak with one of our agents who will be providing coverage both inside and outside the Exchange to compare your options and help you make the best decision.

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