For the first time, many Nevadan’s (those making over 400% of the Federal Poverty Level), may now be eligible for a health insurance subsidy! Plus, for existing members, the rate you are paying will most likely decrease.
For instance, if you were a 60 and 61 year old married couple, and your income was projected to be over $68,960 in 2021 you would not have qualified for a tax credit. Now, since the changes, that same couple making $80K per year would qualify for $1007 per month. This is HUGE!
You can now get a Government subsidy to help you pay for your health insurance premiums. Before these changes, if your income was over $51,040 for a single person in tax year 2021, or $104,800 for a family of 4, you were not eligible for a tax subsidy.
Now there is no income limit to receive these subsidies. The subsidy amount gradually slopes off to be no more than 8.5% of your household income (Modified adjusted gross – for most people, their “Adjusted Gross Income”). So, for many Nevadan’s, they’ll now be eligible for tax credits!
Also in this new law (and this is ONLY for tax year 2020), if you ended up making more than you estimated for tax year 2020, you will not be required to pay back those subsidies.
FREE or NEARLY FREE Health Insurance for any employee who lost their job and collects unemployment any time in 2021. For the tax credit, no matter how much they make on unemployment or otherwise, their income won’t be counted higher than 133% of the federal poverty level. If you are collecting unemployment for 2021, it’s most likely beneficial to apply for Obamacare than Cobra. Why? Free Cobra payments are only good for 5 months, but with Obamacare, the Free to nearly Free health plans are good all year!
These changes do not apply to those Nevadan’s that have jobs that offer insurance to their employees and their families (whether they take their employer, spouses’ employer, parents insurance or not).
Call our office, we can answer your questions, assist you with any changes to your current plan, or help you apply for these new subsidies.
You’ll have to act relatively quickly from the date of your “Life Event”. You’ll only have 60 days from the time of your Life Event to enroll into a health insurance plan. This 60 days is your “Special Enrollment Period”.
Some examples of a Life Event are:
Calculating “INCOME”
When you apply for a “Subsidy” you’ll need to estimate your income (before taxes) for the year in which you’re applying for insurance. If you are not sure, you’ll have to make your best estimate. We recommend you speak with your accountant to get your “Modified Adjusted Gross Income” calculation.
Modified Adjusted Income for most folks will be the Adjusted Gross Income on line 37 of your 1040, or 21 of your form 1040A or line 4 of your 1040EZ of your tax return.
Add:
♦ You and your spouse’s income, if you’re married and will file a joint tax return
♦ Any dependents who make enough money to be required to file a tax return
You’ll need to include:
♦ Wages
♦ Salaries
♦ Tips
♦ Alimony – After 1/1/2019 DO NOT include.
♦ Unemployment compensation
♦ Self Employed or business (generally the amount of money you take in from your business minus your business expenses)
♦ Social Security payments, including disability payments – but not Supplemental Security Income (SSI)
♦ Retirement income, Investment income, pension income, rental income, prizes, awards, gambling winnings
♦ Generally withdrawals from an IRA (Not Roth IRA.) See IRS Form 8606
♦ Withdrawals from a 401k plan (less distributions from a Roth Account) See IRS Pub. 575
♦ Excluded (untaxed) foreign income
♦ Capital Gains
Don’t include:
♦ Gifts
♦ Child support
♦ Supplemental Security Income (SSI)
♦ Veterans’ disability payments
♦ Workers’ compensation
♦ Qualified withdrawals from a Roth IRA. See IRS Pub. 590
♦ Proceeds from loans (like student loans, home equity loans, or bank loans)
We suggest you refer to your federal income tax return to get a quick estimate of your AGI. On your tax return, please refer to:
♦ Line 4 if you filed a Form 1040EZ
♦ Line 21 if you filed a Form 1040A
♦ Line 37 if you filed a Form 1040
Keep in mind, the subsidies are based off the “Household Modified Adjusted Income.”
We recommend you speak with your accountant to get your “Modified Adjusted Gross Income” calculation.
Disclaimer: The material in this site is provided for educational purposes only and does not substitute consultation with an Attorney or Accountant. We do not guarantee the accuracy or completeness of the definitions or any information or other items within this website. Any inclusions of incorrect data or omissions of correct data is unintentional. We will make periodic changes to these materials at any time and make no commitment to update the information contained herein, although we will continue to update as often as possible. The Nevada Insurance Enrollment Marketplace shall not assume any responsibility or liability for any such inadvertent errors or inaccuracies, and shall have no obligation to honor transactions or information affected by such inaccuracies.
If your family size and income ranks you at under 250% of the Federal Poverty Level, this cost reduction will reduce your total out of pocket responsibilities in overall medical costs. You’ll get additional financial assistance to cover more of your portion of the medical expenses for your “Silver” plan (70/30.) So in addition to getting the “Advanced Premium Tax Subsidy,” you’ll also have the “Cost Sharing Reductions” to reduce deductibles, co-pays, and co-insurance. Your overall medical costs will be a smaller percentage of your income to pay for medical bills and expenses.
The Cost Sharing Reduction is ONLY available on SILVER Plans.
A “Subsidy” is where the Government and you share in paying your monthly health insurance payments. The Government helps you pay your health insurance payments monthly, by sending a certain dollar amount of your insurance payment (premium) to the insurance company, and you send in the other portion of your monthly insurance payment to the insurance company. This is called “APTC” (Advance Premium Tax Credit). The factors that affect the percentage or portion of the health insurance premium you pay is your household income and household size (members of your family on your tax return).
Everyone has a “federal poverty level” (FPL), even wealthy people. They just have a higher FPL. People that have a “household” income that falls between 138% up to 400% of the FPL (Federal Poverty Level), can get assistance with paying for their health insurance premiums called an “Advanced Premium Tax Credit.” If you make less than 138% of the FPL, in Nevada you qualify for Medicaid which is Free.
The less money you make the more financial help you will get, the more money you make, the less financial assistance you get. If you make over 400% of the FPL, you won’t qualify for any financial assistance (AKA – subsidy.) You can buy your “qualified health plan” (see definition) insurance anywhere you want, but if you want a “subsidy” your income must be between 138% – 400% FPL. Call us for help with all subsidized and unsubsidized health plans.
A deductible is an amount you pay before the Insurance Company starts paying. Health insurance plans will have different deductibles. Low deductible examples might be a “Gold” plan, with example deductibles of $500, $1,000, $2000, etc. An example of a “Silver” plan might have a higher deductible such as $4,000, $5,000, etc. A higher deductible would be seen in a “Bronze” plan at a deductible of about $8,700. But still, what is a deductible?
Think of it like getting to 1st base in a game of baseball. You start on home plate, and when you get your first medical bill, you’d start running towards 1st base. Beginning to pay towards meeting your deductible. You’ll be expected to pay the whole medical bill out of your own pocket until you’ve paid your deductible, or in other words, reaching 1st base using our analogy.
The very good news is, no matter what the deductible is, you will most likely pay what the insurance company has “negotiated” with the doctor or hospital, even before you’ve paid off your full deductible. As an example, if you have a $1,000 doctor bill because you visited a dermatologist for burning off a wart, the insurance company may have a negotiated a price of about $300 with that doctor, instead of having to pay the full $1000. That $300 you pay will apply to your deductible. So, if you have a $4000 deductible, now you’d have $3700 left of your deductible. Make sense?
Once you’ve paid all your deductible, you are standing on 1st base, using our baseball analogy. Until you’ve paid all $4000 using our deductible example, you’ve not reached 1st base yet. But once you’ve come out of pocket the full $4000, now you’ll begin to move towards 2nd base – “Co-Insurance”. During this time, co-insurance is where you and the insurance company split the medical bills. Some examples, 70/30, 80/20 or 60/40. Make sure to look at your health plan to see what your deductible and co-insurance are.
So, using our $4000 deductible scenario, and dermatology bill, if you have already paid the $4000 earlier in the year, and you are standing on 1st base and now heading for 2nd base, now you’ll pay a split with the insurance company. If your co-insurance was 30%, you’ll pay using our example of $300 (negotiated price of the $1000), you’d pay 30% of $300 which is $90. So, heading to 2nd base, called “co-insurance”, you’ll pay a split of an already discounted price. Usually, the insurance company will pay the larger amount (70%) and you’d pay the lesser amount.
Your next step is 3rd base or your “Out of Pocket Maximum”. This is the maximum YOU have to pay in a year, not the insurance company. Once you’ve paid the “out of pocket maximum”, there will be no additional charges, including cost of medications. The insurance company will pick you up on 3rd base and carry you to home plate. You are all done paying for the year. Please check the details of your plan for deductible, co-insurance and out of pocket maximum.
All major medical plans that will be sold from 1/1/2014 and on that sell on or off the “Exchange” (Marketplace) and the “SHOP Exchange” or in the private marketplace must comply with all the rules and regulations in order to be a “Qualified Health Plan”. All health insurance plans for families and individuals MUST cover these 10 items called “Essential Health Benefits.” These 10 benefits must be covered without any lifetime or annual limits on the “Essential Health Benefits.”
From 1/1/2014 and beyond, all new health plans (insured small group and individual health insurance plans) must cover the 10 bulleted benefits below. These are the plans you’ll want to have in order to cover pre-existing conditions, maternity, prescriptions, and much more. They are “qualified health plans”. These “Essential Health Benefits” will be covered.
Dental for “Pediatrics” means anyone under the age of 19. Check the plan “Summary of Benefits” to see if a dental plan for children under the age of 19 is already built into the plan. ON Exchange pediatric dental is offered for purchase separately, OFF Exchange there may be a plan built into the health plan or not. You’ll need to look at the “Summary of Benefits” in your plan.
Vision for children under the age of 19 is covered, 1 visit per year, 1 pair of glasses per year are covered. The pediatric vision has to be covered ON and OFF of the exchange.
Your insurance company must also allow members to request to have a drug covered that they need that the insurance company does not cover.
State or Federal Health Insurance Plans such as Medicare, Medicaid, VA, Tricare, CHIP etc., or part of an Employer Group that provides benefits, or are “Grandfathered,” are all considered Qualified Health Plans.
Prior to 2014, purchasing individual healthcare with a pre-existing condition, an insurer might have declined covering your condition, or they might have denied you coverage altogether. However, now with the ACA, insurers must provide individual health insurance (with the “10 essential health benefits”) that can no longer exclude, limit, or deny coverage solely because of a pre-existing condition.