Yes, the health reform law called the Affordable Care Act requires everyone to have health insurance beginning January 1, 2014. This is called the “individual mandate.” However, there are some important exceptions to this requirement: The following people are not subject to the individual mandate:
- those whose income is below the tax filing threshold
- undocumented immigrants
- people who have been uninsured for less than 3 months
- Native Americans
- those who prove economic hardship
- those who establish a religious objection.
Everyone will be required to submit proof of insurance, or proof that they have been determined exempt, when they file their income taxes. Insurance providers will issue a certificate of coverage to everyone covered by one of their health insurance policies. The certificate of coverage will then need to be included with the person’s tax return.
Anyone who fails to get and keep health insurance will pay a penalty. The penalty will be added to the person’s tax liability. In 2017 the fee is calculated 2 different ways—as a percentage of your household income, and per person. You will pay whichever is higher of the two.
The percentage of income is 2.5% of household income and per person it is $695 per adult and $437.50 per child under 18.
For example, using the per person method, if a family of four with two adults and two children fails to get health insurance, the family will be required to pay a penalty of $2,265 in 2017.
A health insurance exchange is a website where people can shop for health insurance. Information about the various insurance plans is provided in a way that allows the customer to make side-by-side comparisons. The shopper can focus on aspects of the coverage most important to him or her such as premium price, covered services, in-network providers, and cost sharing. Once a plan is selected, the shopper can purchase the plan from the website.
The health insurance exchange is also the place where people can apply for public health care programs such as Medical Assistance and MinnesotaCare or for financial assistance to purchase a private policy. Small businesses can also use the exchange to provide health insurance for their employees.
The Affordable Care Act allows states either to establish their own state exchange or to use the federal exchange. Minnesota chose to establish a state health insurance exchange, called MNsure, which is available at www.mnsure.org.
MNsure is for anyone who does not have affordable health insurance. Affordable health insurance is defined as insurance that costs less than 9.6% of a person’s income. Those who already have insurance and those who are eligible for affordable coverage from their employer cannot use MNsure. Because Medicare is considered affordable health insurance, seniors and disabled individuals with Medicare cannot use MNsure.
These terms refer to different things that the person buying insurance must pay. A premium is the monthly amount a person pays to purchase the insurance. A deductible is the amount the insured person must pay toward medical bills before insurance starts to pay.
A co-pay is the portion of the cost the person must pay for a particular service, for example, each office visit.
Every policy will have its own premium, deductible, and co-pay costs, items that are important to consider in choosing an insurance plan. For example, a policy may have a monthly premium of $200, a $1,000 deductible, and a $25 co-pay on doctors’ office visits. The insured person must pay the $200 premium each month to have coverage. In addition, the person must pay the first $1,000 in medical bills they receive during the year. Once the deductible is met, the insurance company will pay for the rest of the medical bills except for the co-pay amount. The person will be required to pay $25 of the cost for each service—such as an office visit—as the co-pay.
There are three different programs that help make insurance more affordable. People with incomes between 0 and 40 of Federal Poverty Guidelines (FPG) may qualify for one of these programs. For a family of four, that is an annual income at or below $97,200. The three different programs are:
Medical Assistance: a no-cost insurance program available to low-income adults and children.
MinnesotaCare: a low-cost insurance program available to people with slightly higher incomes. People enrolled in MinnesotaCare pay a monthly premium based on your family’s income.
Advanced Premium Tax Credits (APTC): A subsidy available to people whose household income is between 200% and 400% of the Federal Poverty Guidelines (FPG). The amount of the subsidy is determined by the calculation of your Modified Adjusted Gross Income (MAGI) and your household size. The subsidy is used to reduce your monthly premium.
People interested in applying for financial assistance in obtaining health insurance can apply through MNsure. There is one application for all three financial assistance programs. Once the application is completed, MNsure will determine which program a person is eligible to receive. Each person in the household will be approved for the lowest cost program for which they qualify. It is possible that children in the household could be approved for Medical Assistance while adults in the household are approved for MinnesotaCare or APTC.
No. The Affordable Care Act prohibits insurance companies from denying coverage to anyone because of a pre-existing condition. In addition, the law also prohibits the insurance company from charging a higher premium to people based on their medical history or current medical condition.
The only health-related factor that an insurance company can use to charge a higher premium is tobacco use. A person who uses tobacco can be charged more than a person who does not use tobacco.
No. The Affordable Care Act prohibits insurance companies from imposing either an annual limit or a life-time limit on coverage. No one can have health insurance canceled because there have been too many claims.
There are additional changes to health insurance that may impact you:
- Children under the age of 26 may stay on their parents’ policy regardless of whether they are still attending school.
- All plans must include a basic set of benefits called the Essential Health Benefit set. This benefit set must include preventative care, hospital care, prescription drug coverage, mental health services, chemical dependency services, and rehabilitation and habilitation services.
- All plans must offer coverage for preventative care without deductibles or co-pays.
Most plans will provide women’s specific health services without deductibles or co-pays.
IMPORTANT – The area of healthcare is always evolving. The information provided on these pages only deals with the Affordable Care Act. It is your responsibility to stay up-to-date on the repeal of the ACA and the actions you need to continue your healthcare coverage.
Have more questions? Contact the LRIS to speak with an attorney, or visit LawHelpMN to read articles drafted by some of our partnering agencies: LawHelpMN: Health Care.