Nearly a month and a half after the health insurance marketplace rollout, the federal exchange is still reeling. The underperforming, broken healthcare.gov site is making life tough for the Obama administration. However, the site is starting to make progress, and the government is committed to delivering an error-free, smooth experience to Americans.
However, in the midst of this chaos and its impact on various demographics, there is a particular group that stands ignored – the self-employed. Among a delayed employee mandate, individual insurance talks, and Medicaid expansion discussion, no one is really paying attention to this major chunk of the national population. Here, we discuss the seven questions, and their answers, which will help self-employed sail through the tumultuous times of Obamacare rollout.
Q1. On the basis of earnings, how useful are ACA marketplaces for self-employed?
A. From a general perspective, ACA marketplaces are very useful for everyone, no matter how much they earn. However, on the basis of earnings, people earning up to 400% of the federal poverty line are more likely to benefit from ACA marketplace insurance as their income qualifies them for federal subsidies. If your earnings are above that mark, you will not be eligible for subsidies, but you would still be able to shop through an advanced marketplace network.
Q2. If your income fluctuates during the year, which is true for any self-employed individual, how will it affect your eligibility for federal subsidies?
A. For a right calculation, you will have to estimate your income for the year and apply for subsidies accordingly. However, these estimations are not required to be fully accurate, they are expected to vary, and the government understands that. Therefore, if you overestimate your income and apply for subsidies, but end up earning less than the estimated amount, you won’t be penalized and won’t be asked to pay back any received subsidies. On the other hand, if you underestimate your income and end up earning more, then you will be required to pay those subsidies back when you file your income taxes.
Q3. If it doesn’t make sense for a self-employed individual to purchase health insurance, but just pay the tax, would that individual be covered for healthcare visits, including emergency visits?
A. While it should make sense for everyone to get a health insurance, in case an individual chooses not to get insured, he would not be covered under any circumstances. Since the individual has chosen to remain uninsured, he would be held liable for his medical bills, even for emergency room usage.
Q4. If my business is in New Jersey, would I be required to obtain a health plan from New Jersey? Am I allowed to make use of the much more competitive health plans available through the New York Exchange?
A. Unfortunately, this is not possible at the moment. You are only allowed to enroll through the exchange that matches your address. Although there is an aspect of the ACA that allows for the above scenario, it has not been fully implemented. Only seven states have passed the bill to allow cross-border selling of their health plans, but nothing has been done to implement the bill. So, for now, it cannot be done.
Q5. Can subsidies be applied only to Silver level plans? Are there no subsidies available for bronze level plans?
A. That’s definitely not the case. This confusion has arisen from the sample calculations that have been made on silver level plans, leading people to assume that those subsidies cannot be used on bronze plans. Subsidies can be applied to any plan, and in some cases, are enough to support an individual fully through a lower level, bronze plan.
Q6. If a self-employed individual with health insurance closes the business and takes up a job, would he be required to obtain the health insurance from the employer, or can he continue with his old insurance?
A. There is no mandate that enforces the employer offered health insurance onto you, but it generally makes financial sense to utilize the health insurance available through your employer because you lose the right to subsidies when you are employed with an organization that offers health insurance. You can only get subsidies from the federal or state healthcare technology systems when either your employer’s insurance offering does not cover at least 60% of typical health expenses, or your coverage costs more than 9.5% of your entire family’s income.
Q7. What’s the workaround to the buggy healthcare.gov site? How can I get enrolled in time?
A. Paper applications. Paper applications are the temporary answer to getting enrolled without going through the traumatic experience of the healthcare.gov website. It is quite easy to get paper applications processed through navigators, who are available round the clock for assisting people using the paper medium.
The seven questions mentioned above will definitely help you maneuver these uncertain times. As time passes, the market will settle down, giving self-employed and employees of large organizations enough time to figuring which health plan is the best for them. Till then, follow these seven guidelines and let us know if you have any more questions!