Last Minute Alternatives to Keep You in ACA Compliance

Affordable Care Act (ACA) “Obamacare” Open Enrollment Period ends March 31, 2014. If you are not enrolled in a health insurance plan by March 31,2014, you will be forced to wait until November of this year before you may enroll in new health insurance.

The tax penalty for failing to enroll in a health insurance plan in tax year 2014 is the greater of $95.00, or 1% of your adjusted gross income in 2014. (i.e., If your income from all sources should be $35,000.00, your tax penalty would be $350.00.) That tax penalty will increase substantially in 2015 and in the following years.

If you are one of the many earning too many dollars to qualify for a tax credit but not enough to cover Obamacare’s bloated insurance premiums without straining your budget there is a possible shelter for you…not a long term answer but enough to see you through 2014, in the hope that ACA may be changed or replaced with a more workable law within the next couple years.

Designed for those between jobs needing health insurance to cover the gap between employer provided group health insurance plans is a product referred to as Temporary Health Insurance, or Short Term Health Insurance. Such plans provide traditional major medical insurance benefits during the gap between group insurance coverage…can last anywhere from thirty (30) days up to ,usually, eleven months.

For now Short Term Health Insurance plans have escaped the clutches of Obamacare, and work just like traditional health insurance: You must satisfy a deductible which you select…any amount from less than a thousand dollars up to five thousand dollars or more. After your deductible has been satisfied, you and your insurance company share in claims above the deductible…typically 80% is paid by the insurance company and you pay the remaining 20%, ( could also be 70%/30% or 50%/50%)…until you reach a cut-off point. At that point, the insurance company starts paying 100% of the bill.

Because such health insurance is designed to cover you for a relatively short period of time, does not cover “pre-existing”conditions, and ends when paid claims total, usually, $1,000,000.00, or sometimes $1,500,000.00, its premiums are lower than those demanded by Obamacare plans. If one has owned Short Term health insurance for a full eleven months, and still needs health insurance, that person may apply for a second such plan to last up to another eleven months.

Caveat: If our insured person, above, collected on a claim during the period he/she was covered by the first Short Term policy, the second short term policy may not cover the condition causing the claim, as such would now become a “Pre-Existing” condition. However, if you need affordable health insurance now, and Obamacare plans cost more than your budget allows, look into owning a Short Term Health Insurance plan. Just Google Temporary Health Insurance, or see the link on my web-site.

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