As of January 1, 2014, the healthcare mandate of the Affordable Care Act (ACA) went into effect. The aim of the ACA is to decrease the number of uninsured Americans; as such, the new law requires that most Americans now carry health insurance. The law is complex, and can be confusing to consumers, which makes it especially important to consult with a knowledgeable insurance agent. Below we outline who is required to carry coverage and who qualifies for a subsidy to help pay for coverage.
Who is Required to Purchase Coverage?
Individuals who do not receive coverage through their employer, or whose employer-sponsored coverage costs more than 9.5% of gross income, are eligible to purchase coverage through their state-based or federal health insurance exchange. Individuals who earn less than around $10,000 a year are not required to purchase health insurance, but may qualify for Medicaid, depending on the state in which they live. Students are able to stay on their parents’ health insurance plan until age 26, but also have the option of purchasing coverage through the exchange.
Who Qualifies for a Subsidy?
Individuals who earn between 138% and 400% of the federal poverty level ($45,960 for an individual or around $94,000 for a family of four) may qualify for a subsidy to help pay for the cost of coverage. The subsidy is based on a sliding scale, where lower income individuals receive a larger subsidy than those earning more.
What if My Employers Offer Me Coverage?
If your employer offers health coverage for you that costs less than 9.5% of your gross income, and they offer coverage for your spouse and children as well, you and your family members will not qualify for subsidized coverage through the healthcare exchange.
It’s important to note that this is true regardless of how much it costs to insure your spouse and children through your employer’s plan, which could make insurance unaffordable for some families, because often employers pay very little or nothing toward the cost of coverage for family members. This has been dubbed the “family glitch, and the government has not come up with a resolution to this issue, to date.
Another option for getting children insured is Medicaid, but eligibility for this program is based on income, so many will not qualify. Check your state’s Medicaid program to find out whether your children qualify, or contact the licensed experts at Benefit Packages. Our agents are fully trained on the complexities of the Affordable Care Act and can help you understand your best options for coverage, whether inside or outside the exchange. Find out about affordable options for California health insurance, here on our website, or by calling us toll free at 1-800-356-3615.