On January 1, 2014 health insurance coverage was dramatically changed by The Affordable Care Act.
Since that time, Obamacare has become a term associated with the Federal Health Insurance Exchange and Tax Credits or Subsidies. It’s where individuals and families can get government financial help paying for their health insurance premium. But, you have to qualify for that help by having an income under 400% of the Federal Poverty Level, among other qualifications.
For those who don’t qualify for Obamacare, private insurance plans are available. Private insurance plans offer an easier alternative to the Federal Exchange.
Why would you want a private insurance plan?
The best reason is so that you don’t have to enroll in the Federal Exchange. The Federal system is complicated, difficult to understand and frustrating. I’ve had highly educated professionals in my office, like doctors and lawyers, who found the online program too difficult to figure out and sought my assistance.
Many of those who enroll through the Exchange are required to send additional documentation to the Exchange such as birth certificates, tax returns, and driver’s licenses to prove they are citizens or to support their expected income, etc. These documents are not required by private insurance plans making both the enrollment and follow up much easier.
What about taxes? Fines?
Private insurance plans will not leave you with a tax bill at the end of the year. When you enroll through the Exchange, you are required to estimate what your modified adjusted gross income will be through the end of the year. That in itself can be a chore. But, so many people who enroll through the Exchange underestimate their income, making more than they stated when enrolled and wind up with a tax bill. If the actual income winds up being more than the income limit, the entire tax credit must be repaid and that can be many thousands of dollars. This doesn’t happen with private insurance plans.
Want to make a change to your phone number, address or number of dependents on your health plan? You can’t just call your insurance company, you have to call the Exchange, sit on hold and then go through their lengthy process. With a private insurance plan, you simply call your insurance company and they handle it for you.
Will I qualify for a tax credit with a private insurance plan?
If you qualify for a tax credit or subsidy and you want government assistance paying for your plan you have to enroll through the Exchange; it’s the only place you can get that. But, if you don’t qualify for a tax credit or subsidy, or if you simply don’t want to go through the hassle of the Exchange, you can get a private insurance plan.
Just remember, private insurance plans do not offer tax credits or subsidies. But they do offer a far less complex enrollment process, don’t require personal documents, won’t allow you to wind up with a tax bill and give you a much closer relationship with your health insurance company.
Would you like more information on the benefits of private insurance plans? Give me a call and I will be happy to provide it.
Jake Young
Individual and Family Specialist since 2002
