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You Have Questions, We Have Answers

Q: What is health care reform?

A: Health care reform, or the Patient and Protection and Affordable Care Act, requires Americans and legal residents to have health insurance. In addition, large employers are required to offer affordable health insurance that meets minimum essential requirements.

Q: What if I don’t have health insurance during 2014?

A: Any individual, family, or part of a family that does not have health insurance for more than 90 days in a given year will be subject to a penalty that will be paid through their tax return.

Q: What if I cannot afford insurance?

A: If you qualify, you can receive Premium Credits and subsidies through the exchange. If your family’s income is under 400% of the Federal Poverty Level you most likely will qualify for government assistance. The Health Care Exchange for your state will help you get qualified for any assistance, even expanded Medicaid available in some states.

Q: Who is exempt from the requirement to have health care coverage?

A: If you do not have health care coverage starting January 1, 2014, you may not have to pay the penalty if you can prove one of these applies to you:

  • you are a member of a federally recognized Native American tribe
  • you participate in a health care sharing ministry
  • you are a member of a recognized religious sect with religious objections to health insurance
  • you are incarcerated
  • you are an undocumented immigrant to this country
  • you are unemployed and without coverage less than 3 months during the year;
  • you have very low income and coverage is considered unaffordable for you (amount to pay for coverage would cost you more than 8% of your income)
  • you do not file a tax return because your income is too low; (in 2013, $10,000 for individuals and $20,000 for a family)
  • if your income is 133% or below the Federal Poverty Level ($15,282 for singles; $31,322 for a family of four – in the 48 contiguous states and DC, higher in Hawaii and Alaska – source:
  • if you would qualify for Medicaid under the new income limits, but your home state has chosen not to expand Medicaid

To be exempt from paying the fee, you must apply for this exemption through your state’s health care marketplace, beginning October 1, 2013. To find your state’s health care exchange marketplace and more information about them, go to

It’s important to remember that even if you do not have to pay the fee, if you do not have health coverage you will have to pay for your health care out of your pocket. It may be better financially for you if you purchase coverage through your state’s health care marketplace.

Q: What is a health care marketplace?

A: Each state will set up a health care benefits marketplace by October 1, 2013, or will participate in the national health care marketplace. The marketplaces will each have a website and toll-free number to answer questions and guide people through the application process. With proof of income, applicants will be able to apply for Medicaid and Children’s Health Insurance Plan (CHIP), to apply for exemptions from paying the health care penalty, and to apply for subsidies to help them pay for their coverage.

Each marketplace must have plans available in four categories: Bronze, Silver, Gold and Platinum. In general, the levels of plans have to do with how much your premiums will cost and what your co-pays on services will cost. A Platinum plan will have higher monthly premiums than a Bronze or Silver plan, but the Platinum plan will have lower co-pays for office visits and other services.

Q: If I have a small business, do I have to offer insurance to my employees?

A: If you have a small business, that is less than 25 full-time workers, you are not required to offer insurance to your employees.

Q: Are large employers required to offer health insurance?

A: Large employers are required to offer health insurance to their full time employees and their dependents. If they do not, they are subject to a penalty.

Q: What is the Federal Poverty Level (FPL)?

A: The amount of income a family needs for food, clothing, transportation, shelter and other necessities. It changes every year and in 2013 was $11,490 for one person; for each additional family member add $4,020. The FPL in Alaska and Hawaii vary from the rest of the country.

Q: What is the penalty if I do not have insurance?

A: The penalty is going to be phased in, in an effort to give Americans time to get coverage.

  • 2014: $95 for 1 person, or 1% of taxable income, whichever is greater
  • 2015: $325 for 1 person, or 2% of taxable income, whichever is greater
  • 2016: $695 for 1 person, or 2.5% of taxable income, whichever is greater
  • After 2016, the penalty will be increased by the reviewing the cost-of-living

Q: What is a Premium Tax Credit?

A: A Premium Tax Credit is a refundable credit that can be claimed on your tax return or received throughout the year to reduce the out-of-pocket expense towards insurance premiums. If a person chooses to receive it throughout the year, it will be paid directly to the health insurance company. The amount of the credit is based on the FPL.

Q: What are cost-sharing subsidies?

A: Cost-sharing subsidies reduce the amount an individual or family must pay out of pocket for the year. They reduce the maximum amount paid annually out-of-pocket.

Q:Since the amount I would pay for health insurance is based on my income, do I have to prove how much money I earn?

A:Yes. The Health Insurance Exchange or Marketplace will verify your income through your tax return on file with the IRS, Equifax, or by reviewing paystubs.

Q: If my employer offers health insurance, can I still use the exchange?

A: Maybe. If your employer offers coverage that isn’t affordable or doesn’t meet specific minimum requirements, you can use the exchange. In addition, if you use the exchange you lose the amount your employer would pay towards your premiums.

Q: Who is considered a large employer?

A: A large employer is a company that has more than 50 full-time equivalent employees.

Q: If I have a small business, do I receive any benefits if I offer health insurance to my full-time employees?

A: Yes! If you have a business with 25 or less employees with average salaries less than $50,000 you can get up to a 50% tax credit towards the premiums you pay. You’ll only receive this credit when you purchase coverage through your state’s SHOP – Small Business Health Options Program.

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