Tag Archives: health insurance

The Most Important Financial Consideration You Should Have Your Mind On

At different periods in time there are job losses, houses being repossessed, businesses in disarray, companies going into bankruptcy or shutting their doors forever… the list goes on and on. There’s no such thing as a stable economy; if one things going well something else isn’t.

hospital bills
Engin_Akyurt via Pixabay

We’ve had numerous conversations about saving money, paying down bills, how to buy things at less cost, eliminating debt, and a host of other recommendations that are all very good. One thing that’s been somewhat lost, yet always makes its presence felt, is health care coverage. We need to talk about how important it is to maintain health care coverage for you and your family.
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Have You Purchased Health Care Coverage Yet?

There are more than 11 million people who have signed up for insurance through the government’s health exchange, also known as the Affordable Care Act. At this point in time more people have insurance coverage than ever before in the history of this country.

For those that don’t have coverage though, time is about to run out. We did a post on things to know about the ACA last year. What we didn’t cover in that article is the time frame that you need to have insurance coverage so you can avoid the penalty.

Basically, the law says that if you’re not covered for more than 3 consecutive months, you might have to pay a penalty. Last year it was 2 months, but they gave you until May to sign up for insurance coverage. You’re totally exempt if your income is below your tax filing threshold or if you were denied Medicaid coverage. You’re also exempt if coverage would cost more than 8% per person in your household.

Unfortunately, the open enrollment period is now over, but there is a special enrollment period that lasts through the end of April if you qualify for it. If you just forgot or had problems filling out the paperwork, it can’t hurt to check this out.

By the way, you need to remember that the penalties are added to your income, not how much you actually have to pay. As an example, if your income was $30,000 and you got hit with a 2% family penalty, it would mean your total tax would be based on $30,600. Maybe… because the penalty is the “greater” fee between 2% or $325 per adult and $162.50 per child. At least the maximum for a family is only $925.

Still, it’s always better to have insurance if you can afford it. Even with the high deductible plans, you’ll find that you’ll get some discounts on medical services that will help reduce your out of pocket costs. True, it’s a monthly bill that might cost you between $350 and $500 (depending on your state), but if you have kids it could save you money in the long run (and you might qualify for a discount if you have problems paying the premium based on your income). It’s at least worth exploring.

5 Things To Know About The Affordable Care Act

Last October we did a quick piece on the new federal health insurance plan, known as the Affordable Care Act, and how it might affect taxes. This isn’t necessarily a follow up piece but it offers 5 things that could affect finances that maybe some folks haven’t considered before.

1. For many people there’s a negligible difference between what they were paying out of pocket for their health insurance and what they might have to pay now. Because of the wide range of discounts offered in many states some people might even end up paying less for their insurance. However, it also depends on where you live because if your area doesn’t have at least 4 competing offers you’ll see your costs go up.

2. It turns out that even with a deductible certain things are being paid, even if not at 100%. Diabetic supplies, lab tests, and even some doctor visits for specialists are receiving some kind of payment. While most insurances cover the same thing, the rate of payment is different so it’s worth checking with your insurance company to see what they might pony up for you (this has always been true by the way).

3. If you’ve never saved receipts for medical services this is the year you should do it. It looks like you can write off any payments you make for the year as long as it comes to at least 10% of your adjusted gross income.

If you have a high deductible plan because it’s what you could afford you’re probably going to fall into this category if you’ve had a few doctor visits or even prescriptions you’ve had to buy that you got minimal discounts for. If you got an adjusted fee owed based on income that will be taken into account, but you’ll need to see your accountant to figure out how it will all work out.

4. Even if you qualify for discounts on your insurance premiums, you should be cautious in accepting them if you feel your financial situation might improve. Those tax breaks you get will become payments you need to make back to the government if you end up not qualifying for those same discounts the next year; in essence it’s considered more of a loan. If you’re not getting at least 50% adjusted off, and you know you’re going to be going for a much better paying job, it might be smarter to not accept any assistance.

5. We haven’t talked about it here so it’s time to mention what happens if you decide not to get insurance. For 2014, the penalty starts at around $900 if you’re single, $3,800 if you’re a family. That’s considered “taxable income“, not how much you’ll actually pay.

Depending on your income it’ll start around $95 and go up from there for individuals and couples, and start around $383 for families. There’s a max limit the first year, which is helpful, but it goes up drastically for 2015 and eve higher for 2016.

The thing is, if you’re unemployed or under employed, and you don’t qualify for Medicaid, this is a great option because you could end up with little to no premiums coming out of your pocket and still have health care coverage until you get back on your feet. At the very least, it’s worth looking into, no matter what your finances look like. But hurry up, otherwise you’ll have to wait until November to start over.