News from the Healthcare Insurance Exchanges
By Nancy Slanover
The time to act is now for 2016 health insurance coverage, including dental and vision plans. The open enrollment period to apply for new health coverage is November 1, 2015, to January 31, 2016. If you do not enroll in a health insurance plan through one of the exchanges through the Healthcare Insurance Marketplace, you cannot enroll for coverage again until the next open enrollment period unless you have certain life events, like getting married, having a baby or losing other coverage. You can apply for Medicaid or the Children’s Health Insurance Program (CHIP) at any time of the year.
The open enrollment period to apply
for new health coverage is
November 1, 2015, to January 31, 2016.
Tax Credits to Help Pay Health Insurance Premiums
Your ability to qualify for assistance in paying your monthly health insurance coverage through the healthcare marketplace is based on three factors: your income, family size and where you land within a measurement known as the federal poverty level (FPL). If you make between 100% and 400% of the FPL, you may qualify for tax credits to help you cover the cost of your monthly health insurance premiums.
As an example, based on the 2015 FPL per household, a one-person household would need to have an income of $11,770 to be at the 100% level (lowest) of the FPL. Each household dependent adds another $4,160 to the calculation. With a family size of five, household income can reach $113,000 (400% of FPL) and still be eligible for some tax premium assistance.
IMPORTANT: If you have the option of employer-based health insurance and decide to enroll in a healthcare exchange plan instead, you probably will not be eligible to get premium tax credits to help you pay for your exchange plan.
You should first discuss declining
employer-based coverage with your
employer and by calling a representative
at your local healthcare insurance
exchange before you decide
what is the best option for you.
What is considered income when applying for tax credits to help pay for your health coverage?
Start with your adjusted gross income (AGI) from your last federal income tax return and include the following to estimate your income for 2016:
- Tax-exempt foreign income
- Tax-exempt Social Security benefits
- Tax-exempt interest
- Expected employment changes or self-employed income
- Upcoming changes to your household, such as losing or gaining dependents, and changes in Social Security income
- DO NOT include Supplemental Security Income (SSI) in your calculation.
Using the above information, try to come up with a realistic estimate of your income for 2016.
Be sure to notify the exchange of any changes as they occur throughout 2016 to avoid having to pay back any subsidies you received if you underestimated your income for the year.
Family Size: Who is Included and Who is Left Out?
You should look at your federal tax return from the previous year. Your family includes:
- The individual who filed the tax return
- Their spouse (if legally married)
- Their dependents
- If you are not claimed as a tax dependent by someone else, and have no tax dependents yourself, then count only yourself in your household.
Who is considered a dependent? (Include everyone that meets the below criteria, even if they do not need health insurance.)
- Children under 21, including adopted and foster children, that are financially dependent upon the tax filer
- Parents, siblings and other relatives that are financially dependent upon the tax filer
- Spouse, even if living apart, that is financially dependent upon the tax filer.
Who is not considered a dependent?
- Unborn children
- Legally separated or divorced spouse.
Who else may be considered a dependent?
- Unmarried domestic partner, if there is a shared dependent child, or if the partner is financially dependent on the tax filer
- Children in shared custody, if the tax filer can claim them as a tax dependent for that tax year
- Non-dependent children under 26, only if covered by the tax filer’s health insurance plan.
Dental and Vision Health Insurance
Dental coverage is an included benefit in some healthcare exchange plans, but you can also purchase stand-alone dental plans if you also have medical health insurance coverage through the exchange.
Dental insurance, by law, must be provided to children 18 years old and younger through either a health insurance medical plan or as a separate dental plan. The law requires dental coverage to be available for children through the exchange; however, you are not required to purchase it if dental coverage is obtained through another health insurance plan.
Vision coverage is not a required benefit on the exchange for adults; however, all children are provided with vision insurance through all of the qualified health plans offered through the exchange. Pediatric vision plans must cover eye exams and glasses.
If you do not have any health insurance coverage in 2016, you will be in for some stiff penalties. The cost of not having any health care coverage has risen to $695 per adult per year or 2.5% of your income, whichever is more. If you owe a penalty, it will be taken from your tax refund if you are eligible for a refund. Federal law prohibits garnishment of wages or filing of liens to pay for penalties of not having health insurance.
You must be enrolled in a plan that qualifies as minimum essential coverage to avoid the penalty
for not having health insurance.
Do not go without health insurance coverage. Sign up today and protect yourself and your family from unexpected illness and accidents. Practice preventative care and explore new ways to stay healthy and be at your best!