It’s Not Too Late to Buy a New Affordable Care Act Plan!
What You Need to Know About Utah's Health Insurance Exchange
he Affordable Care Act “Open enrollment” period has been extended to March 31. So it’s not too late to enroll in an Affordable Care Act (ACA) policy. Most of the individuals I speak with think it too late to enroll, but you still have a couple of months. However, it may not be cost-effective for you to enroll in a new ACA policy, because they are typically more costly. So who would be a good candidate for a new ACA policy? I can think of five possible scenarios you should consider reviewing your options to see if an ACA policy will benefit you:
1. Considering growing your family? Maternity is covered like any other illness on ACA plans. So if you have $1000 medical deductible policy once the deductible is meet most of the maternity expenses will be covered by the carrier. Because there is NO underwriting, all polices are guaranteed issue so you can even currently be pregnant and still enroll.
2. The second reason you should consider an ACA policy is to see if you qualify for a “Subsidy” or “Tax-credit.” Many individuals I speak with are surprised to hear they qualify for a Tax-credit. For example a family of five, husband, wife, and three children making $65,000 a year could qualify for a $300 per month Tax-credit. The Tax-credit can lower your monthly premium significantly. Also the keep in mind the $65,000 a year is NOT based on your “Gross income” it’s based on your “Modified adjusted gross income.” It’s very important to understand what your modified adjusted gross income (MAGI) is vs. gross income. For more details on MAGI please see below.
3. The third reason would be if you received a “rate-up” of more than 30% when your policy was issued. Many individuals receive significant rate-up when their policy is issued due to past medical history, or because they were taking an expensive medication, etc. Again, because there is NO underwriting, and all polices are guaranteed issue you may be able to save money on your monthly premium.
4. The third reason, have you ever been declined, or on a Utah HIP policy?
5. Are you currently on Cobra, and paying a high monthly premium because of pre-existing condition?
ACA need to know: What's 'modified adjusted gross income?'
If you qualify for a healthcare subsidy on the Affordable Care Act's new marketplace, one factor on which the subsidy will be based is your "modified adjusted gross income." What is that and why should you care? Most individual tax payers know "gross income" as the sum of all of their income from various sources, such as wages and interest on savings accounts. "Adjusted gross income (AGI)" reduces that sum by subtracting the allowable deductions listed on your 1040 tax form:
Adjusted Gross Income from IRS 1040 Tax Return Form:
23 Educator expenses
24 Certain business expenses of reservists, performing artists, and
fee-basis government officials.
25 Health savings account deduction.
26 Moving expenses.
27 Deductible part of self-employment tax.
28 Self-employed SEP, SIMPLE, and qualified plans
29 Self-employed health insurance deduction
30 Penalty on early withdrawal of savings
31 a Alimony paid b Recipient’s SSN
32 IRA deduction
33 Student loan interest deduction
34 Tuition and fees.
35 Domestic production activities deduction.
On a 1040 form line #37 lists your MAGI for the year.
When applying for a health insurance tax credit, you may be told that "modified adjusted gross income" is basically the same thing. It's not.
Keeping in mind that the “M” stands for “modified,” if you took certain deductions to report your AGI, you may need to add them back to report your MAGI, such as:
· Deductions for IRA contributions.
· Deductions for student loan interest or tuition.
· Excluded foreign income.
· Interest from EE (employee) savings bonds used to pay higher education expenses.
· Employer-paid adoption expenses.
In other words, the adjusted gross income you report for income tax purposes isn't necessarily the same as the modified adjusted gross income you would report for the purpose of the healthcare tax credit. The reason to get it right when applying for a healthcare tax credit is that you'll have to pay some of it back at tax time if you under-reported your income, depending on your actual income level. To determine your Tax-credit or Subsidy please visit: http://kff.org/interactive/subsidy-calculator/
Don’t Think You’re Alone!
Utah Insurance Solutions is here to help, we can help you determine your Tax-credit and/or Subsidy. We can walk you through the Federal Marketplace Exchanges and Private Exchange step-by-step. It’s not too late to purchase a new ACA policy that may better fit your needs, please call us to help you find the right plan for your unique needs.
Please feel free to call and ask all your Affordable Care Act questions.
Please call or email MacKenzie Boyce (Individual Health Insurance Specialist):
Bret Harding MBA, (Certified Healthcare Reform Specialist)
Visit Utah Insurance Solutions website to get an insurant Utah health insurance quote: www.UtahInsuranceSolutions.com.