Table of Contents

  1. What exactly is the subsidy?
  2. Who qualifies for the subsidy?
  3. Who does NOT qualify for subsidy?
  4. How is income calculated?
  5. I’m on Medicare and/or Medicaid, how does this apply to me?
  6. I’m unemplyed and have no income, can I get insurance?
  7. I don’t know what my 2014 income will be, how am I supposed to guess?
  8. My spouse is covered through work, but when we add me and our children to it, it becomes too expensive for us; what can we do?
  9. My child is 22 years old and away in college, should I get them on my plan or let them get their own?
  10. If I can’t be denied for a preexisting condition, why wouldn’t I just take the risk of signing up when I am at the hospital and get immediate coverage when I need it?  Wouldn’t that be cheaper?
  11. When will I be billed for my portion?
  12. What are the penalties if I don’t enroll?


What exactly is the Subsidy?

The Subsidy is a federal program designed to help you reduce the cost of monthly premiums, if you qualify, based on your financial situation and family makeup.  The subsidy can be paid directly to the insurance carrier so that you do not need to bother with the check.  This would reduce your monthly premiums.

Who qualifies for Subsidy?

If your 2015 ANNUAL household income is between 100-400% of the Federal poverty level, you qualify for some level of Subsidy.

Subsidy Chart 2015

Chart Source/Credit: https://www.healthcare.gov/lower-costs/


Who does NOT qualify for Subsidy?

  • Anyone making above or below the chart listed above
  • Anyone that has Health Insurance offered through their place of employment (or their spouse’s), regardless of acceptance of that insurance
    • The exception to this is if the premiums of the employee share equals out to be more than 9.5% of their income
  • Anyone that is not a legal US resident
  • Anyone who does not have a social security number
  • Anyone who is currently incarcerated
  • Anyone who qualifies for and/or is currently on Medicaid/Medicare


How is income calculated?

The income that is being used is your HOUSEHOLD MAGI (Modified Adjusted Gross Income). Please consult with your CPA for a better understanding of MAGI:

MAGI is all of your income minus the following:

  • Certain self-employed expenses
  • Student loan interest deduction
  • Educator expenses
  • IRA deduction
  • Moving expenses
  • Penalty on early withdrawal of savings
  • Health savings account deduction
  • Alimony paid
  • Domestic production activities deduction
  • Certain business expenses of reservists, performing artists, and fee-basis government officials

Typically this is line 37 on your 1040 Tax Form


I’m on Medicare and/or Medicaid, how does this apply to me?

  • If you are already on Medicaid and/or Medicare, this program is typically not for you because you already have coverage and there is no need for you to make any changes.
  • If your children or spouse are on Medicare/Medicaid it does not disqualify you from a subsidy.
  • If you or your children qualify for NC Health Choice or Medicaid, you can still get coverage for anyone in your household that does not quality, but anyone who does qualify will need to go through Medicaid.


I’m unemployed and have no income, can I get insurance?

In order to qualify for a Federal Subsidy, you must have an income that falls between the stated levels or you must apply for an exception directly with the marketplace.  We understand that situation of being unemployed and not having any income to pay for Health Insurance.  You may also have been denied from Medicaid and have no assistance there.

In some cases you can apply for a waiver through Healthcare.gov, but we can not make any warranties on your approval (nor can we help you with this process).


I don’t know what my 2015 income will be, how am I supposed to guess?

We understand, most of us don’t have the same income year after year.  It’s advised that you use your previous year’s tax returns and create an educated estimate of your projections going forward.

If you overestimate or underestimate your projections, it may result in a credit or a debit against your 2015 taxes when you file in 2016.


My spouse is covered through work, but when we add me and our children to it, it becomes too expensive for us; what can we do?

You can still apply for an individual policy for your spouse and children outside of the place of employment; however, if the employee’s portion of the premium is less than 9.5% of their income solely, the spouse and children may not qualify for a federal subsidy.  Even if your combined premium is more than 9.5%, only the employee’s portion counts towards that calculation.


My child is 22 years old and away in college, should I get them on my plan or let them get their own?

If your child would qualify for their own subsidy based off of their income, you can let them get their own policy.  If they would not qualify on their own, but would qualify under your household income and family size, you may keep them on your plan until the age of 26.  If you do plan on having your child on your plan, you must claim them on your tax returns.

For what reasons can I enroll in a plan at a later date?

  • You lose coverage from work
  • You have married or divorced
  • You have moved out of the area that your carrier provides network coverage in
  • You have a birth/death in the immediate family
  • Your income goes up or down in the manner that you would become eligible for a subsidy
  • You lose your Medicaid or other group coverage.

Otherwise, you must apply during an open enrollment period.


If I can’t be denied for a preexisting condition, why wouldn’t I just take the risk of signing up when I am at the hospital and get immediate coverage when I need it?  Wouldn’t that be cheaper?

No, your policy becomes effective the month following your sign-up, so long as you sign-up before the 16th of the month.  If you sign-up after the 16th you’ll have to wait a month and a half before your coverage will be effective.

The coverage is not retroactive and can only be used for future claims, not past claims.


When will I be billed for my portion?

You will be billed monthly for your portion, starting with your initial payment that is usually due two weeks before your coverage start-date. You have the option of paying by credit card, direct bank draft or by cash with your insurance agent directly.


What are the penalties if I don’t enroll?

The penalty increases gradually year after year.  You must have insurance for at least 9 months of the year to avoid the penalty.

2015

The penalty for not having insurance in 2015 is the greater of the following:

  • 2% of your taxable income
  • $325 per adult and $165.50 per child (up to $975 per family)

2016

The penalty for not having insurance in 2016 is the greater of the following:

  • 2.5% of your taxable income
  • $695 per adult and $347.50 per child (up to $2085 per family)