The Affordable Care Act mandate that everyone needs to have health insurance or pay a penalty starts in 2014. The requirement is that individuals must be covered for at least 9 months of the year to avoid having to pay a penalty. In actual costs, if you’re single or married with spouse and no kids you’ll have to pay either $95 or 1% of your total income, whichever is higher, and if you’re a family of 3 or more the cost is around $380 or 1% once again. Those are the actual dollars; it’s not much but it’s still money out of your pocket, and it goes up in 2015.
Here are a few more things you should know about what’s going on, including what’s happening in New York:
1. New York state is broken into multiple coverage areas, and each area offers something different, although some insurance companies cover multiple areas. Without a discount, plan costs seem to be running between $400 and $1,800, with the major differences being deductible and pharmaceutical costs. The lowest level plans, known as bronze level, don’t offer anything for pharmaceuticals, while the costliest plans don’t have a deductible that you must reach. Start thinking of health insurance like car insurance if you have to purchase one of these plans.
2. The range for qualifying for a discount on health insurance is pretty vast. For single or self + spouse the dollar amount is around $49,000, for larger families it goes all the way up to around $94,000. It’s nice to qualify for a discount but it comes with a warning that most people don’t know about. If you get a discount but the next year your income takes you above that level by a certain percentage (which hasn’t been released yet), you not only lose the discount but you might be required to pay back whatever discount you received beforehand. That doesn’t seem quite fair but it’s in one of those pieces of paper that experts have read so be warned about it.
3. Experts have gone back and forth as to whether consumers or small businesses will be able to deduct the cost of premiums in 2014. Supposedly if you’re getting a discount you won’t be eligible but if you’re not… still a bone of contention. The recommendation is to keep all receipts for those services that are presently allowed to be deducted if their cost is high enough which includes physician visits, dental visits, medical equipment and vision care; sorry but no sunglasses unless they’re prescription.
Unfortunately even now there are lots of questions yet to be answered, but as with most other things it’s important to keep all your receipts and share them with your accountant. At some point we will have all the answers we need.
