Who will need to use health insurance exchanges?

Health insurance exchanges open October 1, 2013.

Many of Michigan’s estimated one million uninsured households will want to choose health insurance later this year. Health coverage for currently insured households is projected to become more affordable in the next five years. Read more at http://familiesusa2.org/assets/pdfs/health-reform/helping-families/Michigan.pdf

The Affordable Care Act (ACA) contains Individual Mandates for health insurance coverage. You can purchase insurance on your own directly from an insurance company or through a broker, or use the health insurance provided through your employer. Anyone without insurance through work can purchase private health insurance from the insurers participating in your state marketplace, which is also called an exchange. You can also use the Michigan exchange if your coverage at work costs you more than 9.5 percent of your income, or if your employer’s plan does not meet the ACA’s minimum standards. The online marketplaces will be open for business starting October 1, 2013, offering coverage that starts January 1, 2014.

Another question is who will want to use exchanges? Even those individuals and families with plans through their employer may want to check out the Marketplace plans to decide if they are eligible and which plan is the smartest choice for them.

Those who do not have coverage may be required to pay a yearly financial penalty. The amount is the greater of $695 per person (up to a maximum of $2,085 per family), or 2.5 percent of household income, which will be phased-in from 2014-2016. Exceptions will be given for the following circumstances: financial hardship and religious objections; American Indians; people who have been uninsured for less than three months; those for whom the lowest cost health plan exceeds 8 percent of income; and if the individual has income below the tax filing threshold ($9,500 for an individual in 2011).

You are exempt from the mandate tax if:

  • You use the insurance your employer provides or purchase individual insurance on your own.
  • You have insurance through Medicare, Medicaid, Children’s Health Insurance Program (CHIP), Veteran’s Administration and/or Tricare for active duty and retired military, Indian Health Services, or a health-care sharing ministry.
  • You would have to spend more than 8 percent of your household income on the cheapest qualifying health insurance plan, even after tax credits and subsidies.

For more information, go to http://www.consumerreports.org/health/resources/pdf/ncqa/The_Affordable_Care_Act-You_and_Your_Family.pdf

Employer Requirements

No employer mandate exists, but employers with more than 50 employees will be assessed a fee of $2,000 per full-time employee if certain criteria are not met. Large employers that offer coverage will be required to automatically enroll employees into the employer’s lowest cost premium plan if the employee does not sign up for employer coverage or does not opt out of coverage. Read more at http://kaiserfamilyfoundation.files.wordpress.com/2013/01/8023-r.pdf

Michigan State University Extension is involved with a national Extension effort to provide information and education about choosing health insurance. To follow the progress or ask a question, check out the many ways:

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