If you’re one of the many self-employed low- or middle-income earners in this country, you’re likely to have found health insurance prohibitively expensive at some point in the past. You may still be without coverage because it’s simply too costly. Today, the Affordable Care Act (frequently referred to as “Obamacare”) may change that. Here’s what self-employed individuals should know:
Healthcare Mandate –-The Affordable Care Act (ACA) requires that most Americans have health insurance in 2014. Those who don’t enroll in coverage through their state or the federal health insurance exchange by the extended deadline of March 31, 2014 will be subject to a penalty of 1% of their annual income, or $95, whichever is greater. This will increase over time, eventually maxing out at 2.5% of a person’s household income in 2016.
Tax Breaks/Cost-Sharing Subsidies –– The good news is that, despite the mandatory healthcare requirement, the ACA has put in place tax breaks and cost-sharing subsidies to help cover the cost of coverage. The subsidies are based on household income, so not everyone will qualify. Self-employed individuals who earn less than $45,960 annually, or a family of four making less than around $94,200, should qualify for some type of assistance.
Benefit Improvements — Plans issued after the ACA went into effect on March 23, 2010 are required to cover 10 essential health benefits, as well as certain preventive services, with no cost-sharing to the consumer. These are just some of the improvements to coverage under the ACA.
Restrictions on Denying Coverage for Preexisting Conditions –– Insurance companies can no longer deny people coverage for preexisting conditions, or require a waiting period before preexisting conditions will be covered, on plans issued after January 1, 2014.
Some policies issued before the ACA went into effect on March 23, 2010 are “grandfathered,” meaning that they are not subject to all of the requirements of the new law. Self-employed individuals looking for insurance now, and in the future, should not be affected by this, however.