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Home / Healthcare / Things To Know About October Obamacare Enrollment

 

ObamacareOn October 1st yet another part of Obamacare will be wreaking havoc on many Americans. That is the date that people will be able to buy health insurance through their state’s online resource. If you are fortunate enough to even be aware of your state’s resource or the web address where you can find it, there are a few things that you may want to know before you pay a visit.

Who is affected

Individuals and businesses who have fewer than fifty employees can use the online market resources. While you may sign up for the plans starting October 1st, the coverage will not begin until January 1, 2014. People who already get their insurance through a group plan have nothing to worry about, unless their plan is going to end or it is not deemed ”affordable”.

Uncle Sam will cover some of the cost

Most of the people who buy their insurance through the state markets will receive a subsidy from the government. The subsidy will be a tax credit that can be directly applied to the monthly premiums. Subsidies are based on income. People who make up to $45,960 or a family of four making $94, 200 can qualify for the subsidies. Obviously, the lower your income is, the higher your subsidy will be. For example, a person making $17,235 a year will pay a maximum of four percent of their income or $57 a month for coverage, while a person who makes $45,960 will top out at 9.5 percent, or $364 a month. There are additional subsidies available to those making less than 250 percent of the federal poverty threshold. So, those making less than $28,725 for a single person and $58,875 for a family of four can receive additional assistance with deductibles and co-pays. There is a handy calculator at this link (http://kff.org/interactive/subsidy-calculator/) to help you understand how much you will pay for health insurance through a state online marketplace.

What happens if you do not buy in

If you choose to ignore Obamacare, you most likely will face tax penalties in 2014 and 2015. In 2014 the penalty is a flat fee: $95 per adult and $47.50 per child, but it is capped at $285 per family; however, the government slipped a little loophole in to cover people with higher incomes. The penalty can be as much as one percent of total family income above the filing threshold, which is $10,000 for an individual or $20,000 for a family. Those penalties increase each year. By 2016 they will be $695 per adult and $347 per child, capped at $2,085 for a family. If you make more money you could be looking at 2.5 percent of family income up to the equivalent of the premiums for a bronze plan sold on the marketplace. The penalties will continue to increase with the cost of living after 2016.

There are people who will not face tax penalties at all. There are no penalties if:

  • You are uninsured for less than three months of the year. The penalties are prorated by the number of uninsured months after three.
  • Your income is so low that you do not have to file a tax return or the premiums are more than eight percent of your income.
  • You could qualify for Medicaid under the expanded income limits, but your state did not expand eligibility. Twenty-five states refused to expand eligibility, so many people will fall into this category.

There are other exceptions to the penalties. The government estimates that 24 million people will be exempt from Obamacare by 2016. You can view the steps to using your state’s online marketplace at healthcare.gov.

 

About the author: Jerry Coffey

 

Jerry Coffey spent many years in a debt-riddled gray area somewhere between broke and desperately broke. His seemingly endless need for more and more cash led him to payday loans, repossessions, bankruptcy, and depression. After years of the same financial style, he heard a piece of advice that inspired him to find a way to change. The advice: ''The very definition of a fool is someone who continues to do the same things, but expects different results.'' This led him to a much more frugal lifestyle that sees all of his bills paid on time and a growing savings account. Even the seed of a retirement account has begun to sprout.

 

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