But What About Me?

While corporations have been taken off the hook as regards to meeting compliance deadlines for 2014, individuals have not.  Individuals have until the end of March to sign up for benefits.   Before you do, there are several things to consider, the most important of which is what I can afford.

The law states that you must either purchase benefits or pay a fine.  It is not illegal to go without insurance.  The law says you must either have insurance OR pay the fine.  To do neither is breaking the law.

The fine is 1% of your income or $95 for an individual or $285 for a family of 3 or more, whichever is greater (See Below for Specific Details).   The fine is pro-rated for each month and accrues for each month you do not have coverage.   The penalty for not having insurance is to be paid as part of your taxes.  If you do not pay, the only recourse the federal government has is to take the money from future tax refunds owed. 

The decision you have to make is whether or not “affordable” healthcare is affordable for you.    Here are some things to consider:

   Are you or would you be eligible for Medicare / Medi-Cal?

  • In California, if you earn less than 138% of the poverty line, you are eligible for Medi-Cal.  Outside California, if you earn less than 133% of the poverty level you are eligible for Medicaid.  You do not have to pay for these services.  Therefore, if you are close to these income levels, if you are single and make less than  $15,900.00, if you are a couple and make less than  $21,500.00, or if you belong to a family of four and make less than $32,499.00, you are eligible for Medi-Cal. 
  • Medi-Cal / Medicaid is free.  If you fall into the income categories above then you are eligible.  If you are close to these income levels and suffer a catastrophic event that would put you below the income levels required;  you could be better off by not getting insurance now and, in the event such a terrible thing occurs, you would be eligible for Medi-Cal.

   What is the penalty for not having insurance?

  • The penalty in 2014 is calculated one of 2 ways. You’ll pay whichever of these amounts is higher: Either 1% of your yearly household income with the maximum penalty equaling the national average yearly premium for a bronze plan OR $95 per person for the year ($47.50 per child under 18) with the maximum penalty per family using this method  equaling $285.  Penalty fees increase every year. In 2015 it’s 2% of income or $325 per person. In 2016 and later years it’s 2.5% of income or $695 per person. After that it is adjusted for inflation. 
  • If you’re uninsured for just part of the year, 1/12 of the yearly penalty applies to each month you’re uninsured. If you’re uninsured for less than 3 months, you don’t have a make a payment.
  • If you drop your contract you may be subject to significant penalties.

Can you afford the total cost of the policy?

  • The total cost of the policy is the premiums you pay plus the deductibles plus the co-pays.
  • You have to consider the whole cost. For example, if you earn $50,000 and have a family of 4, you subsidized payment for a bronze plan will be $3 per month.  But the individual deductible for that plan is $5,000 and the family deductible is $10,000.  Remember, the insurance doesn’t begin to pay until you’ve met your deductible.
  • If you are a heavy user of the healthcare system you are better off getting a silver, gold, or even a platinum plan because, thought the monthly costs are more, the deductibles are lover and the co-pays are significantly lower, 10% versus 40% for a bronze plan. 

 If you get the contract what is the cost of dropping it?

  • Even if you drop your contract, you are still eligible for service next year.  No US citizen can be refused a policy because they broke their contract in the prior year.
  • You will be assessed penalties if you drop the contract.
  • You may be required to repay any subsidies you received.  If you don’t repay you can be pursued to the full extent of the law.