October 1, 2013 is the start of a new phase of the Affordable Care Act (ACA), otherwise known as Obamacare that was first passed in 2010.
Starting today, family child care providers without health insurance can sign up to purchase insurance through their state health care exchanges.
This signup period will continue until March 31, 2014. Insurance coverage will begin on January 1, 2014.
Those Not Affected
If you are already covered by health insurance through your spouse’s employer, or you are currently on Medicare or Medicaid, you do not have to do anything. You will keep your current insurance coverage and do not have to sign up to purchase different health insurance.
As an Employer
If you hire employees to help you with your business you are not required to purchase health insurance for them. Only employers who have more than 50 full time employees will be required to purchase health insurance by 2014, or pay a penalty. Therefore, there continues to be no requirement that you offer health insurance to your employees.
You can choose to offer health insurance to your employees if you want. If you do, there are some federal tax credits that can help make this more affordable. In 2013 there is a 35% tax credit if you pay more than half the cost of health insurance premiums for your employees. In 2014 this will rise to a 50% tax credit. The cost of premiums not covered by the credit continue to be a 100% business deduction. You must have two full-time employees to take advantage of this credit. Unfortunately, you cannot hire your spouse or own child and claim this tax credit.
As a Consumer
Health insurance has become increasingly difficult to afford for many family child care providers who are single or not covered by their spouse’s health insurance plan. Starting today you can shop for more affordable health insurance coverage for your family (and your employees) through state-run insurane exchanges.
To learn all of the details of the ACA and to find the contact information for your state’s health care exchance, go to www.healthcare.gov (CuidadoDeSalud.gov). Or call 1-800-318-2596, 24 hours a day with your questions.
Under the ACA, these state exchanges will not offer health insurance but will rather offer a one-stop shop for health insurance plans offered by private insurance companies. This will make it much easier to compare benefits and prices.
Insurance companies will not be able to refuse to insure you because of your health history and cannot cancel your insurance. Insurance companies can no longer charge women more for the same insurance. All policies cover pregnancy and childbirth as well as dental and vision coverage for children.
Insurance policies being sold will come in four levels: platinum, gold, silver and bronze. The major difference between them is the cost per month and how much you will pay for deductibles and copays.
Low-income individuals and families will be eligible for subsidies that will reduce the cost of your monthly premiums. The amount of your subsidy, or tax credit, will depend on your family size and income. There is also a tax credit to help pay for deductibles. In addition, for very low income families the ACA law expands coverage for Medicaid in many states (those earning less than $31,000 for a family of four).
If you are single you can get a subsidy if you earn less than $45,960; family of two $62,040; family of three $78,120; family of four $94,200. These amounts are for 2013 and are likely to rise by 2014. For details, see your state’s health care exchange website. For more information about these subsidies and deductibles see the helpful information posted on www.healthcare.gov.
Understanding the details about the cost of insurance policies available to you can, at first, seem daunting. Each state has private insurance companies offering their own policies with their own prices. To find out what choices you have, go to your state’s website, enter the information about how many are in your family and your family income.
Beginning in 2014, if you are not low income, you will be required to either purchase health insurance or pay a small penalty. The annual penalty (tax) is $95 for an adult and $47.50 for a child, or up to 1% of
your income (whichever is greater). This will rise to $695, or 2.5% of income by 2016. This is the individual tax; families have a tax of $2,085 or 2.5% of income whichever is greater. There are currently no
rules that allow the IRS to enforce this tax.
If you have health insurance that you want to keep, the ACA will not force you to change policies. The fear of losing health insurance or being unable to pay medical bills has haunted many family child care providers for years. ACA will make major changes in how we buy health insurance. It will become easier to get health insurance, the insurance will cover more and in the long run cost less than if the law did not exist.
What questions do you have about the ACA?
Tom Copeland – www.tomcopelandblog.com
Image credit: www.coursera.org