Individual Health Insurance: Options for 2014

The Affordable Care Act goes into effect in January 2014, and enacts the requirement that health insurance coverage be guaranteed issue for all, which means that no one can be denied or charged extra for preexisting health conditions.

There are three situations most people will find themselves in come next year. Some will be covered by their employer’s group plan. Many people without access to a group plan that is affordable (costs less than 9.5% of a person’s income) will buy individual health insurance policies either inside or outside the exchange (in Colorado, Connect for Health Colorado.) Those who decide to refuse coverage will be required to pay a fine.

Subsidies or tax credits will be available to those who meet certain income requirements (133%-400% of federal poverty level.) For 2013, the yearly salary parameters are as follows:

  • Individuals:  $15,282 – $45,960
  • Families:       $31,322 – $94,200

If your income falls within this range, you will qualify for government assistance when buying a policy through the exchange. For those whose income is less than 250% of the poverty level, and enroll in a silver level exchange plan, a cost-sharing subsidy will be available. A portion of the premium will be paid by the government. For all others enrolling in any exchange plan, within these income restrictions, a tax credit will be provided to be applied to insurance premiums.

People who choose to remain uninsured face a penalty of $95 or 1% of yearly income, whichever is greater. The fines for continuing to stay uninsured will rise each year through 2016.

Health Care Reform Penalties

Sage Benefit Advisors keeps abreast of the changes happening, sometimes daily, as this new system is developed. Please contact us with any questions regarding healthcare reform, or to discuss the best option for your personal situation with one of knowledgeable brokers.