Do I have to purchase directly through HealthCare.gov or my state's health insurance exchange to obtain a subsidy?
- No. The process of selecting the right health insurance plan is difficult. You do not need to go directly to HealthCare.gov or your state's health insurance exchange to enroll in plans eligible for a subsidy. Saunders Insurance Solutions is certified to offer health plans from companies we represent that provide the same government subsidy that would be available to you through the government's exchange. As such, we can help you through the process of enrolling in a subsidized health plan and best of all, our services comes at no cost to you.
Who can purchase Catastrophic coverage?
- Only people younger than 30 years old and those with a hardship exemption are permitted to purchase a Catastrophic plan.
How does an HMO plan work?
- (Health Maintenance Organization): If you are in an HMO, you must use network providers - doctors, hospitals and other health care providers - that participate in the plan. The only exception is for emergency care. An HMO requires the selection of a Primary Care Physician (PCP) to manage your care. Referrals are usually needed from your PCP to see a specialist, who must also be in the network.
How does an EPO plan work?
- (Exclusive Provider Organization): Similar to an HMO, with an EPO you must use network providers - doctors, hospitals and other health care providers - that participate in the plan. The only exception is for emergency care. Unlike an HMO, you do not need to select a Primary Care Physician (PCP), nor do you need to contact your PCP for referrals to specialists. However, because you are responsible for choosing specialists and hospitals, it is especially important to check with the plan by phone or their website to be sure the provider is in the network.
How does a PPO plan work?
- (Preferred Provider Organization): With a PPO, you receive the full benefits of the plan when using network providers - doctors, hospitals and other health care providers that participate in the plan. You have the option of using non-network providers, but with a lower level of benefits and higher out-of-pocket costs. With a PPO, you do not need to select a Primary Care Physician (PCP).
What is a HSA-eligible Plan?
- In order to have a Health Savings Account (HSA), you must have an HSA-compatible health insurance plan. This type of insurance plan is often referred to as a High Deductible Health Plan, and typically has lower premiums than plans with lower deductibles. A health insurance plan must meet the following criteria to be considered HSA-compatible in 2017 1) The health insurance plan must have an annual deductible of at least $1,250 for individuals and at least $2,500 for families and 2) The sum of the annual deductible and the other annual out-of-pocket expenses required to be paid under the plan (other than premiums) does not exceed $6,350 for individuals and $12,700 for families.
What is the Premium?
- The payment that must be made to an insurance company monthly to keep a health insurance policy in effect. If you are eligible for a subsidy, the federal government will pay the subsidy portion of the premium and you must pay the remaining amount.
What is my Deductible?
- The yearly amount that you must pay before insurance coverage begins. There may be both an individual and a family deductible. Certain types of services, such as a preventive care visit to your physician, may be covered without being subject to the deductible.
What is Coinsurance?
- A portion of a single medical bill, expressed in a percentage, that you are responsible for paying.
What is my Copayment?
- A portion of a single medical bill, expressed in a dollar amount, that you are responsible for paying.
What does Out-Of-Pocket Maximum (Limit) refer to?
- The maximum amount of covered health care costs that an insured may pay out of their own pocket per year. After the out-of-pocket max is met, the plan will pay 100% of any remaining covered costs for the year. With any health insurance plan, you'll be responsible for paying a portion of your health care costs. But your health plan will also put a cap on the total amount you have to pay. Premiums are not counted as an out-of-pocket expense.
What are Metal Levels?
- Plans are grouped by "Metal level" to indicate the following levels of cost sharing:
• Platinum plans cover 90% of average total costs, and you pay for 10%.
• Gold plans cover 80% of average total costs, and you pay for 20%.
• Silver plans cover 70% of average total costs, and you pay for 30%.
• Bronze plans pay 60% of average total costs, and you pay for 40%.
• Catastrophic plans generally pay nothing until the maximum out of pocket limit has been reached, then cover 100%. These plans are available only to people under 30 or who have a hardship exemption.
What is Subsidized Coverage?
- Health insurance coverage that is partially paid by the federal government to qualifying individuals and families with low and middle incomes. For those who are eligible, most will take the subsidies in the form of Advanced Personal Tax Credits (APTCs), where the government pays a portion of the premium each month based on estimated income for the following year. The tax credit is reconciled when the tax return is filed early in the following year.
How do I calculate income for the subsidy calculation?
- The income used for calculation of federal health insurance subsidies is called Modified Adjusted Gross Income (MAGI). This figure takes the Adjusted Gross Income that appears on tax returns and adds income from a few additional sources, sources that few people will have. It is important to note that the calculation is based on an estimate of the coming year's income (currently 2017 income), not last year's. When filing your tax return in 2018, there will be a reconciliation and the subsidy will be adjusted based on actual income in 2017.
Adjusted Gross Income can be found on:
• Line 4 of Form 1040EZ
• Line 21 of Form 1040A
• Line 37 of Form 1040
To calculate MAGI, add the following to Adjusted Gross Income
• Non-taxable Social Security benefits (Line 20a minus 20b on Form 1040)
• Tax-exempt interest (Line 8b on Form 1040)
• Foreign earned income and housing expenses for Americans living abroad (calculated on Form 2555)
Source: Center for Labor Research and Education, University of California, Berkeley