Q:  If someone chooses to forgo health insurance, what is the tax they will pay? 

If someone who can afford health insurance doesn’t have coverage in 2014, they may have to pay a fee. They also have to pay for all of their healthcare.  Currently, when someone without health coverage receives urgent—often expensive—medical care but doesn’t pay the bill, it is covered by taxpayers.  The new healthcare law requires that all people who can afford  to, take responsibility for their own health insurance by getting coverage or paying a penalty.  People without health coverage will  have to pay the entire cost of all their medical care. They won’t be protected from the kind of very high medical bills that can sometimes lead to bankruptcy. The fee in 2014 is 1% of your yearly income or $95 per person for the year, whichever is higher. The fee increases every year. In 2016 it is 2.5% of income or $695 per person, whichever is higher.  In 2014 the fee for uninsured children is $47.50 per child. The most a family would have to pay in 2014 is $285.  It’s important to remember that someone who pays the fee won’t get any health insurance coverage. They still will be responsible for 100% of the cost of their medical care.

For information on how to become exempt from paying the fee, see https://www.healthcare.gov/what-if-someone-doesnt-have-health-coverage-in-2014/

If you don’t qualify for these situations, you can apply for an exemption asking not to pay a fee. You do this in the Marketplace.

No employer has to offer coverage. Some large businesses that don’t offer coverage meeting certain standards may have to make a shared responsibility payment in 2015.

  • If a company has fewer than 50 full-time equivalent (FTE) employees, it is not subject to the Employer Shared Responsibility parts of the law. It may use SHOP to offer coverage for its employees.

As of January 1, 2015:

This assessment, known as Employer Shared Responsibility, will offset part of the cost of the Marketplace premium tax credits. Treasury recently issued transitional relief to employers covered by these rules indicating that no shared responsibility payments will apply until 2015. You can refer to the Proposed Regulations for more information about these provisions. Learn more about the Employer Shared Responsibility Payment.

Q:  Health Insurance Exchanges- What are they?  

The health insurance marketplace, also known as health insurance exchanges, is a new way to find quality health coverage.  It is an online store where consumers can compare and buy health insurance plans.  It can help if you don’t have coverage now or if you have it but want to look at other options.  With one Marketplace application, you can learn if you can get lower costs based on your income, compare your coverage options side-by-side, and enroll.   Starting October 1, 2013, consumers in all states will be able to apply for new affordable health coverage options through the Health Insurance Marketplace for coverage beginning as soon as January 1, 2014.

Each state had the option to run its own exchange, work in partnership with the federal government to run an exchange, or to use a federal exchange.  Approximately half the states decided to use the federal exchange, and the rest selected either the state-run or partnership model (find your state’s health insurance exchange).

Q:  What benefits will the exchanges provide to consumers?

Each exchange will:

  • Present benefit options in a standard format — so it’s easy for consumers to compare plans
  • Operate a toll-free hotline where consumers can ask questions and get help
  • Set up a program to help consumers understand and purchase health insurance
  • Certify the health plans that sell policies through the exchange and make sure health plans comply with regulatory standards and requirements
  • Provide an online calculator so consumers can determine their costs; the calculator will factor in tax credits or subsidies available to the consumer
  • Interact with other computer systems and databases to determine if consumers are eligible for tax credits or subsidies on the exchange or if they qualify for Medicaid or the Children’s Health Insurance Program (CHIP); this is called “no wrong door,” and it will make it much easier for consumers to get signed up for some kind of health coverage
  • Certify which individuals are exempt from the individual mandate

Q. What are the 10 essential health benefits?

These essential health benefits include at least the following items and services:

  1. Outpatient care—the kind you get without being admitted to a hospital
  2. Trips to the emergency room
  3. Treatment in the hospital for inpatient care
  4. Care before and after your baby is born
  5. Mental health and substance use disorder services: This includes behavioral health treatment, counseling, and psychotherapy
  6. Prescription drugs
  7. Services and devices to help you recover if you are injured, or have a disability or chronic condition. This includes physical and occupational therapy, speech-language pathology, psychiatric rehabilitation, and more
  8. Lab tests
  9. Preventive services including counseling, screenings, and vaccines to keep you healthy and care for managing a chronic disease.
  10. Pediatric services: This includes dental care and vision care for kids

Specific healthcare benefits may vary by state. Even within the same state, there can be small differences between health insurance plans. When you fill out your application and compare plans, you’ll see the specific healthcare benefits each plan offers.

Q:  What are the four categories of health insurance plans and what does it mean?


A:  Plans are arranged into one of the following four categories based on how much they cost and how much coverage they provide:

  • Bronze Plans pay 60% of healthcare costs and have the lowest premiums
  • Silver Plans pay 70% of healthcare costs and have higher premiums than the plan before
  • Gold Plans pay 80% of healthcare costs with higher premiums than the two before
  • Platinum Plans cover 90% of healthcare costs and have the highest premiums

Q:  What is the Small Business Health Options Program (SHOP) Marketplace?

The Small Business Health Options Program (SHOP) is a new program that simplifies the process of buying health insurance for small businesses.  It is designed for small employers with 50 or fewer full-time equivalent employees. With one online application, on your own or with the help of an agent, broker, or other assister, you can compare price, coverage, and quality of plans in a way that’s easy to understand.  For further details, see https://www.healthcare.gov/what-is-the-shop-marketplace/.


If you have questions that you would like answered in the next installment, please email them to kristin.shelton@smithdickson.com.