Archive for the ‘Health Reform’ Category


Top 5 Lessons Learned for Covered California’s Second Enrollment

Top 5 Lessons Learned for Covered CA’s 2nd Enrollment

We are on the eve of Covered CA’s 2nd open enrollment period, consumers be ready. Here is a list of the top 5 lessons learned from the first open enrollment period that will help those that need to buy health insurance during the 2nd open enrollment:covered-ca-head-banging-guy

No. 1) Use an agent. You will need one.

I realize that sounds like a shameless plug, but the facts from Covered CA’s first enrollment strongly back up the value of certified agents, so much so that Covered CA is redoing its marketing plan to notify consumers of agents available in their area, via storefront, internet or telephone.

Open Enrollment and Special Enrollment Periods

One VERY significant change to the individual health insurance market made by The Affordable Care Act (ACA, Obamacare) is the implementation of open enrollment and special enrollment periods.  Prior to the ACA, an individual could purchase health insurance from an insurance carrier anytime, but the insurance carrier could reject an application, based on a pre-existing condition of the applicant.

Open Enrollment and Special Enrollment Periods

The ACA bans insurance carriers from denying applications based on pre-existing conditions, so without a stricter enrollment period, consumers could simply wait until they were stricken with a severe condition to purchase health insurance.  This is referred to as “adverse selection”, and defined open enrollment periods attempt to limit such negative statistics for insurance carriers.

Elect COBRA or Get Obamacare?

COBRA-or-Obamacare-two-signs-cartoonElect COBRA or Get Obamacare? Health Care Reform (Obamacare, The Affordable Care Act, ACA) may dramatically change the number of terminated employees that elect COBRA.  Why?  Because Obamacare has created many more options for terminated employees, including the possibility of receiving an advance premium tax credit (also known as subsidy)  for terminated employees that qualify.

What exactly is COBRA, and why was it the only option for terminated employees prior to Obamacare?

SHOP – The Real Reason Employees Will Love It

SHOP – The Real Reason Employees Will Love It

What is the SHOP?  SHOP stands for Small business Health Options Program , and it was established by health care reform as part of the state run marketplaces used to purchase health insurance plans for businesses with less than 50 employees.  The goal of the SHOP is to make it easier for small businesses to purchase a group health plan and to offer tax credits for doing so.  But is SHOP best for your employees and their families?

Small Employer Health Insurance Premium Tax Credit, All About It

Kelley-Jensen2Small Employer Health Insurance Premium Tax Credit, All About It:

Before Health Care Reform, there were no special federal tax incentives for small employers to offer health insurance coverage to their employees, other than an ordinary business deduction, and small business owners struggled with the expense of group coverage.  To encourage small employers to provide health insurance coverage for their employees, health care reform provides a small business tax credit for tax years beginning 2010, through 2015.

The credit is calculated on form 8941, as part of the employer’s annual federal tax return.  The most important things to know about the Credit for Small Employer Health Insurance Premiums:

Health Insurance Subsidy on Form 1040

Kelley-Jensen2Health Insurance Subsidy on Form 1040 Much has been written about the premium tax credit or subsidies available to those that qualify.  Here are the most important things to know about the credit, including how it will probably look the first year it will be reported on form 1040, your federal income tax return. 1)    You must file a tax return to claim the credit.  A form 1040, not a form 1040NR (non-resident, sometimes filed using a PTIN). 2)    You cannot claim the credit if your filing status is married filing separately. 3)    You cannot be listed as a dependent on a tax return and claim the credit. 4)    You cannot claim the credit if you or your spouse is provided affordable coverage at work.  This means that if one taxpayer has affordable insurance at work , the entire family is not eligible for the credit, even if it is not affordable for the entire family.  (IRC §1.36B-2). 5)     The credit is NOT based on income reported on your paycheck or W-2, it is based on the adjusted gross income reported on your tax return, modified for any tax exempt income.  Click here for an example of a 2012 form 1040 to see where the number is on your tax return (pg1), (pg2). 6)    If you are self-employed, your health insurance deduction (see a sample 2012 form 1040 here) must be taken into account when estimating your AGI, be sure to ask a tax advisor about this. 7)    If your AGI will be different this year, or if it is too hard for you to estimate, you can take the credit when you file your tax return instead of monthly against premiums, or you can report changes in estimates as the year progresses. 8)    Click HERE for a chart of the income levels that qualify for the credit. 9)    For income tax purposes, a credit is better than a deduction.  A credit is a dollar for dollar reduction in your taxes, a deduction reduces your taxable income.  The premium tax credit you received as part of Obamacare is a big savings to your tax bill, but can only be taken to pay health insurance premiums. 10) If you have large health care expenses, those may be deductible, in addition to the credit, if you itemize your deductions.  Make it a habit to keep track of money you spend on health care and bring that information to a tax adviser. Lastly, the IRS will know if you have taken the credit to pay for health insurance premiums because the exchange will be reporting that information to both you and the IRS.  So, do not apply for the credit, use it to pay premiums and then not file a tax return. When the IRS receives a report about items of income, credits or deductions, they match it against the tax return filed.  When items do not match, they are sometimes flagged for follow up questions or audit, or sometimes the IRS will just issue a bill for differences. In cases where no tax return has been filed, the IRS will file one for you, in their favor.  Once they do that, it is up to the taxpayer to file an amended return and pay any penalties for late filing.  If you have never filed a tax return before, but would like to start for health insurance, consult a tax adviser or tax preparation service.

PIN Number Instead of Social Security Number, Do I get Subsidy?

PIN Number Instead of Social Security Number, Do I get Subsidy?


I am an immigrant in the United States.  I do not have a Social Security Number, but I do have a PIN number issued to me by the IRS, can I qualify for health insurance subsidies using my PIN number?

A PIN number is officially known as an ITIN (Individual Tax Identification Number)  and is issued by the IRS to foreigners that have a need to file a tax return.  Such people can be resident or non-resident aliens, or the spouse of either.  Note that:

Health Insurance Marketplace will launch October 1st

JeffBaderHealth Insurance Marketplace will launch October 1st. California’s is called Covered California, and some important pieces of healthcare reform, the Affordability and Accountability Act (ACA), will take effect January 1st.   Many people are questioning the impact ACA has on the senior health marketplace as there are parts of the new law that affect Medicare coverage.

Donut Hole Changes

One of the biggest changes under healthcare reform will be prescription costs in the coverage gap, often called the “donut hole,” which occurs in some Medicare Prescription Drug Plans. Once the cost for your prescriptions reaches a certain amount (based on $2970 in 2013 retail cost – not the portion you paid), then you enter the coverage gap where your share of cost becomes considerably higher until you reach the “catastrophic coverage” threshold.

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