WW~Notes: Usually, I listen to late night talk radio to go to sleep, but this morning at around 4:30 a.m. the information coming from the morning Wall Street Journal program woke me from a dead sleep right on time it seems. Though this news is from 2013, I was not aware of this penalty, but no doubt, should have expected it.
Q&A: What the Health Law Means for You
The 2010 Affordable Care Act is a huge law that confuses most Americans. Here are answers to the most common questions about the law:
Q: What does the health law require me to do?
A: Starting Jan. 1, 2014, most Americans will be required to carry a set level of health-insurance coverage or pay a penalty.
Q: Who doesn’t have to pay the fee?
A: There are a handful of groups that don’t have to have coverage, including people who are incarcerated, in the United States illegally or belong to a religious group that objects to insurance coverage. And people with very low incomes won’t have to pay the penalty. Nor will people who can show that coverage in their area costs significantly more than they can afford on their earnings, or people who are only uninsured for three months or less.
Q: What is the penalty?
A: The penalty starts at $95 a year or 1% of a person’s taxable income, whichever is greater. It goes up in subsequent years and by 2016 will be $695 for each adult or 2.5% of a person’s taxable income. Fines based on a person’s income can’t be higher than the cost of buying a basic health insurance policy in their area.
Q: When is it paid?
A: You’ll have to pay a penalty when you file your taxes in 2015 for the preceding year. Your tax form that year will probably include some sort of question about your insurance coverage details, or give you the opportunity to pay the penalty, although the exact details of this are still being worked out.
Q: Can I buy any policy I want?
A: To satisfy the law’s requirement, you have to carry what’s called “minimum essential coverage.” Medicare, Medicaid and Tricare all count. So do plans from an employer. If you are buying your own policy, or are in a small employer’s plan, your policy will have to cover a set proportion of your costs for what the law considers essential health benefits including emergency services, hospitalization, prescription drugs, maternity services and mental health coverage.
Q: I’ve been paying a lot of money for my own insurance. Will my costs go down?
A: Insurers are predicting that premiums will increase, on average, although it won’t be certain by how much until the products go on sale. The impact of that average increase will probably be lumpy across the country. Costs are likely to go up more in some states than others, depending on how tightly regulated the insurance market was before the full law took effect. Women and older people could end up being charged less, while men and younger people could end up being charged more, because of new restrictions on how carriers vary rates based on age and gender.
Q: Do I get any help with paying those premiums?
A: Maybe. People who have incomes of up to four times the federal poverty level — anywhere up to $45,960 for a single person and $94,200 a year for a family of four — are eligible for tax subsidies toward the cost of coverage. The value of those subsidies depends on the cost of insurance in your area, as well as your income. People near the poverty line could see almost all of the cost of their premiums covered, while people at the upper end will probably only get a small discount.
Q: I already have insurance through my employer. Is my plan going to change?
A: If you get your insurance through your employer, the amount that you have to pay is mainly determined by how much the company contributes toward your premiums. The overall cost of your insurance is not expected to change too much because of the law, at least in the first few years.
But there have probably been a few changes to your plan already. Most employers have to allow you to enroll children up to their 26th birthdays, and cover preventive care, such as a colonoscopy or birth control, without out-of-pocket costs to you. No plans will be allowed to have annual or lifetime payout caps from next year.
A small number of employers’ plans are likely to be “grandfathered,” and don’t have to make all of the changes required by the law.