Obamacare Health Insurance Coverage
What is Obamacare?
The Patient Protection and Affordable Care Act – (AKA – “Obamacare” or “ACA”) allows individuals and families the ability to acquire comprehensive major medical health insurance coverage regardless of whether or not they have any pre-existing health issues.
Who should enroll in an Obamacare plan
Generally, if you are not covered by an employer or government sponsored health insurance plan (such as Medicaid or Medicare) you will want to consider having an ACA health insurance plan. This being said, now that the shared responsibility penalty has been eliminated, the people who will benefit most from enrolling in an ACA plan are those who have pre-existing medical conditions and can not buy health insurance coverage elsewhere as well as those who are eligible for tax-credits which will assist a policy owner in paying the monthly premium for this coverage.
Healthy individuals (especially those who do not qualify for tax credits) should look to alternative health plans to find affordable coverage. However, be aware that these alternatives may not have the same coverages as an ACA plan (such as preventive care, pregnancy, mental health services or treatment for drug and alcohol) and may they have lifetime maximum benefit limits.
What Do Obamacare Health Insurance Plans Cover?
Obamacare health insurance plans are comprehensive major medical health insurance plans. They cover a broad range of health care related costs. In order for a health insurance plan to be considered an “Obamacare Care” plan under the ACA, it must provide coverage for 10 Essential Health Benefits. These health benefits are:
- Ambulatory patient services (outpatient care you get without being admitted to a hospital)
- Emergency services
- Hospitalization (like surgery and overnight stays)
- Pregnancy, maternity, and newborn care(both before and after birth)
- Mental health and substance use disorder services, including behavioral health treatment (this includes counseling and psychotherapy)
- Prescription drugs
- Rehabilitative and habilitative services and devices (services and devices to help people with injuries, disabilities, or chronic conditions gain or recover mental and physical skills)
- Laboratory services
- Preventive and wellness services and chronic disease management
- Pediatric services, including oral and vision care (but adult dental and vision coverage aren’t essential health benefits)
Plans must also include the following benefits:
Essential health benefits are minimum requirements for all Marketplace plans. Specific services covered in each broad benefit category can vary based on your state’s requirements. Plans may offer additional benefits, including:
- Dental coverage
- Vision coverage
- Medical management programs (for specific needs like weight management, back pain, and diabetes)
When shopping and comparing plans on our online enrollment system, you’ll be able to see exactly what each plan offers side by side.
Note: If you are outside an enrollment period (see below) – you can still compare current plans. Just state you are experiencing a life changing event. This will allow you to see plans however, unless you actually are experiencing a life changing event or are inside of the open enrollment period, you will not be able to sign up for coverage at this time.
Compare All Plans In Your Area
How much does an ACA plan cost?
There are several costs to consider when purchasing an ACA plan. These include:
Monthly premiums are influenced by:
Your Age – Younger individuals pay less premium for comparable health insurance coverage than older individuals.
Your Sex – Males pay less premium for comparable health insurance coverage than woman.
Tobacco Usage – Non-tobacco users pay less for comparable health insurance coverage than tobacco users.
Managed Care Provider – The larger the managed care provider network (the more choices an insured has) the higher the premium will be
Metal Type – The Affordable Car Act has 4 general “metal levels” for care. They are:
Bronze — The bronze health plan typically has the lowest monthly premium however, they typically have the maximum out-of-pocket costs if medical care is needed. Many Bronze plans are eligible for Health Savings Account (HSA) Contributions.
Find out how Bronze Plans may be your least expensive health plan option here…
Silver — The silver health plan typically has moderate monthly premiums. It also has moderate monthly costs when medical care is needed, and typically features a lower deductible than bronze plans. When an individual qualifies for premium tax credits, Silver health plans can also see their deductibles and co-insurance amounts reduced lower than the higher premium Gold and Platinum plans (See Premium Tax Credit below for more information.) Silver health plans are often a good choice for individuals who anticipate only needing moderate medical care throughout the year.
Gold — A gold health plan typically has higher monthly premiums than silver or bronze plans. They typically feature a lower standard deductible than the silver or bronze health plans.
Platinum — A platinum health plan typically has the highest monthly premiums than the bronze, silver, or gold health insurance plan options. Platinum plans also features the lowest out-of-pocket maximum when medical care is needed, and typically has the lowest deductible out of all of the plans. The platinum health plan is often a good choice for individuals who can pay high monthly premiums and expect to need a lot of medical care throughout the year.
Obamacare plans with lower co-pays will have higher premiums than comparable plans with higher copays. (See Premium Tax Credit below for more information)
Obamacare plans with lower deductibles will generally have higher premiums than comparable plans with higher deductibles. (See Premium Tax Credit below for more information)
Obamacare plans with lower co-insurance amounts will generally have higher premiums than comparable plans with higher co-insurance amounts. (See Premium Tax Credit below for more information)
What are Premium Tax Credits
Premium tax credits are refundable credits that help eligible individuals and families pay the premium for health care coverage purchased through the Health Insurance Marketplace or an approved system like the one available through Decision Tree Financial here. The health insurance coverages purchased through this system are “Obamacare” or “ACA” health insurance plans.
Who is eligible to receive a Premium Tax Credit?
The first step in to being eligible to receiving a premium tax credit is to own a health insurance policy purchased through the health insurance exchange which can be done in most states here.
The second qualification to receive a premium tax credit is to have an income that is considered to be between 100% and 400% of the “poverty limit” for the area the insured resides.
The third qualification to receive a premium tax credit is to file an annual income tax return and form 8962. If you are married, you must file a joint tax return with your spouse
(unless you are a victim of domestic abuse or spousal abandonment), or you are not claimed as a dependent by anyone else.
Fourth, you can not be eligible for employer sponsored coverage, Medicare or Medicaid and your share of the premium isn’t above 9.5% of the EMPLOYEE ONLY OPTION. (Note: Have your employer help you fill out this employer sponsored tool to know if you are eligible for Obamacare even though you have coverage through work and provide it to your tax preparer when you complete your taxes.
The worst thing that could happen is to receive this credit, be audited and not having the proper documentation to defend your tax return causing you to have to repay your ACA tax credit along with penalties. Learn More here…)
How are Premium Tax Credits Determined
There are a number of factors that determine the amount of premium tax return you can receive. They include:
Age – Younger individuals receive proportionately less premium tax credit than older individual for the same coverage.
Total MAGI – Total Modified Adjusted Gross Income for Obamacare tax credits is determined by taking line 37 on your 1040 tax return and adding in 1) any Social Security Income not included 2) tax-exempt interest and 3) Excluded foreign tax income.
Types of Income to Include in MAGI
|Federal Taxable Wages (from your job)||Yes||If your pay stub lists “federal taxable wages,” use that. If not, use “gross income” and subtract the amounts your employer takes out of your pay for childcare, health insurance, and retirement plans.|
|Self-employment income||Yes||Include “net self-employment income” you expect — what you’ll make from your business minus business expenses. Note: You will be asked to describe the type of work you do. If you have farming or fishing income, enter it as either “farming or fishing” income or “self-employment,” but not both.|
|Social Security||Yes||Include both taxable and non-taxable Social Security income. Enter the full amount before any deductions.|
|Social Security Disability Income (SSDI)||Yes||But do not include Supplemental Security Income (SSI).|
|Retirement or pension Income||Yes||Include most IRA and 401k withdrawals. (See details on retirement income in the instructions for IRS publication 1040). Note: Don’t include qualified distributions from a designated Roth account as income.|
|Investment income||Yes||Include expected interest and dividends earned on investments, including tax-exempt interest.|
|Rental and royalty income||Yes||Use net rental and royalty income.|
|Excluded (untaxed) foreign income||Yes|
|Supplemental Security Income (SSI)||No||But do include Social Security Disability Income (SSDI).|
|Veterans’ disability payments||No|
|Proceeds from loans (like student loans, home equity loans, or bank loans)||No|
It is extremely important to note that this amount is determined in the year following the year you had coverage! Many times, individuals will estimate their earnings based on their previous years. However, if they actually earn a higher amount, it could significantly a reduce the credit they actually earn and, if they received an advanced premium tax credit, be required to pay it back.
Here are four things to remember about how your income affects your premium tax credit:
- The amount of the premium tax credit is based on a sliding scale, with greater credit amounts available to those with lower incomes.
- If the advance credit payments made on your behalf are more than the allowed premium tax credit, you will have to repay some or all the excess. If your household income is 400 percent or more of the federal poverty line for your family size, you will have to repay all of your excess advance credit payments.
- If your projected household income is close to the 400 percent upper limit, be sure to carefully consider the amount of advance credit payments you choose to have paid on your behalf.
- If your household income on your tax return is more than 400 percent of the federal poverty line for your family size, you are not allowed a premium tax credit and will have to repay all of the advance credit payments made on behalf of you and your tax family members.
Total Premium of Your Obamacare Coverage
Even though the premium tax credit for Obamacare is refundable, you can not receive more than the amount of your yearly premium.
Can I Receive a Tax Credit if My Income is Too Low?
If your income is too low (it falls below the poverty line) then you are ineligible for a premium tax credit for Obamacare. Therefore, it is important that you claim 100% of the income you earn.
When you can enroll (Open enrollment, special enrollment periods)
There are two times someone can enroll in an ACA health insurance plan:
Open enrollment – A majority of states allow individuals to enroll for an ACA plan during the Federal Open enrollment period. This happens each year November 1 – Dec 15. Those who enroll during this time have their coverage start on January 1st the next year. Some states have longer enrollment periods that can last as long as January 31st the following year.
During Open Enrollment, you are able to both enroll and change your Obama care plan. It will be the last Obamacare plan you enrolled in when the final day of open enrollment passes that will be your plan for the following year.
Special enrollment periods – If you have a life changing event, you can quality for an ACA special enrollment period that lasts for 60 days after the event happens. Life changing events include:
Life changes that can qualify you for a Special Enrollment Period
Changes in household
You may qualify for a Special Enrollment Period if you or anyone in your household in the past 60 days:
Got married.Pick a plan by the last day of the month and your coverage can start the first day of the next month.
Had a baby, adopted a child, or placed a child for foster care.Your coverage can start the day of the event — even if you enroll in the plan up to 60 days afterward.
Got divorced or legally separated and lost health insurance.
Note: Divorce or legal separation without losing coverage does not qualify you for a Special Enrollment Period.
Died. You’ll be eligible for a Special Enrollment Period if someone on your Marketplace plan dies and as a result, you’re no longer eligible for your current health plan.
Changes in residence
Household moves that qualify you for a Special Enrollment Period:
- Moving to a new home in a new ZIP code or county
- Moving to the U.S. from a foreign country or United States territory
- If you’re a student, moving to or from the place you attend school
- If you’re a seasonal worker, moving to or from the place you both live and work
- Moving to or from a shelter or other transitional housing
Note: Moving only for medical treatment or staying somewhere for vacation doesn’t qualify you for a Special Enrollment Period.
Important: You must confirm you had qualifying health coverage for one or more days during the 60 days before your move. You don’t need to provide confirmation if you’re moving from a foreign country or U.S. territory.
Loss of health insurance
You may qualify for a Special Enrollment Period if you or anyone in your household lost qualifying health coverage in the past 60 days OR expects to lose coverage in the next 60 days.
Coverage losses that may qualify you for a Special Enrollment Period:
Losing job-based coverage
You may qualify for a Special Enrollment Period if you lose health coverage through your employer or the employer of a family member, including if you lose health coverage through a parent or guardian because you’re no longer a dependent.
Important: Losing coverage you have as a dependent doesn’t qualify you for a Special Enrollment Period if you voluntarily drop the coverage. You also don’t qualify if you or your family member loses coverage because you don’t pay your premium.
Losing individual health coverage for a plan or policy you bought yourself
You may qualify for a Special Enrollment Period if you lose individual health coverage, including if:
- Your individual plan or your Marketplace plan is discontinued (no longer exists).
- You lose eligibility for a student health plan.
- You lose eligibility for a plan because you no longer live in the plan’s service area.
- Your individual or group health plan coverage year is ending in the middle of the calendar year and you choose not to renew it.
Important: Losing individual coverage doesn’t qualify you for a Special Enrollment Period if you voluntarily drop coverage, if you lose coverage because you didn’t pay your premiums, or if you lose Marketplace coverage because you didn’t provide required documentation when the Marketplace asked for more information.
Losing eligibility for Medicaid or CHIP
You may qualify for a Special Enrollment Period if you lose Medicaid or Children’s Health Insurance Program (CHIP) coverage because:
- You lose your eligibility. For example, you may have a change in household income that makes you ineligible for Medicaid, or you may become ineligible for pregnancy-related or medically needy Medicaid.
- Your child ages off CHIP.
Losing eligibility for Medicare
You may qualify for a Special Enrollment Period if you become no longer eligible for premium-free Medicare Part A.
You don’t qualify for a Special Enrollment Period if:
- You lose Medicare Part A because you didn’t pay your Medicare premium.
- You lose Medicare Parts B, C, or D only.
Losing coverage through a family member –
You may qualify for a Special Enrollment Period if you lose qualifying health coverage you had through a parent, spouse, or other family member. This might happen if:
- You turn 26 (or the maximum dependent age allowed in your state) and can no longer be on a parent’s health plan.
- You lose job-based health coverage through a family member’s employer because that family member loses health coverage or coverage for dependents.
- You lose health coverage through a spouse due to a divorce or legal separation
- You lose health coverage due to the death of a family member.
- You lose health coverage through a parent or guardian because you’re no longer a dependent.
An employer offer to help with the cost of coverage
You may qualify for a Special Enrollment Period if you or anyone in your household newly gained access to an individual coverage HRA or a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) in the past 60 days OR expects to in the next 60 days.
Note: Your employer may refer to an individual coverage HRA by a different name, like the acronym “ICHRA.”
More qualifying changes
Other life circumstances that may qualify you for a Special Enrollment Period:
- Gaining membership in a federally recognized tribe or status as an Alaska Native Claims Settlement Act (ANCSA) Corporation shareholder
- Becoming newly eligible for Marketplace coverage because you became a U.S. citizen
- Leaving incarceration
- Starting or ending service as an AmeriCorps State and National, VISTA, or NCCC member