As Obamacare becomes more and more of a reality to individuals, I’m being asked lots of questions. In the past few weeks, I received three questions that I’m finding are common concerns among the people I’ve talked with. I wanted to share these questions and provide some insight into each. So let me peel back the Obamacare “onion” and help you better understand how you may be impacted or what options you have available to you.
What if I have health insurance through my company and my spouse/kids have another option? How do I know what is the best fit? Can my spouse/kids go to the exchange?
- First, yes, it’s entirely possible that your spouse has access to another insurance product through their place of employment. You should figure out what single-only insurance coverage with your company will cost you versus family coverage through your company. Look at what coverage will cost with your spouse’s insurance, too. Does yours or your spouse’s company have a policy that would make adding individuals to an insurance plan more costly (i.e. a spousal penalty)? You’ll want to also look at what the exchange insurance might cost you. You can put your information into www.healthcare.gov and get a pretty good idea of what you’d pay for certain tiers of insurance.
- You and your family can always go to the exchange to get insurance. It’s very possible that if you have a good insurance plan (and good employer contribution), the exchange will be more expensive. But that’s not always the case as I’ve talked to many businesses recently where the exchange pricing is significantly less expensive for their employees. So if getting the best bang for your buck on health insurance is important to you, your best bet is to evaluate all of your options and compare them to see what is best financially for you and your family.
I heard on the news that we will have to prove we have health insurance or pay a fine. Do I have to do something when I file my 2013 taxes? What about next year?
- While you don’t need to worry about reporting your health care insurance situation on your 2013 tax return, this individual mandate will apply every month beginning in January 2014. That means you have to be covered by health insurance beginning in January. If you aren’t covered, you’ll have to pay a fee starting in January. The fee is paid with your 2014 tax return, which will be filed in 2015.
- For 2014 taxes, your W-2 form will likely be sufficient for the reporting requirement. Stay tuned for IRS guidance next year as to how to prove insurance for self-insured individuals and family members.
I heard that exchange insurance will have a different network of doctors and hospitals. Is this true?
- Yes. As an example, Anthem’s traditional insurance (through an employer) has the Cleveland Clinic as an in-network hospital. If you were to buy any kind of Anthem exchange insurance product, the Cleveland Clinic is out-of-network. The only exchange insurance product that the Cleveland Clinic will accept is Medical Mutual of Ohio.
- I like to think of the exchange like Travelocity. The lowest price, fastest travel, a particular provider or a special time can all vary the price of a trip, hotel or flight – and what you get for the price. One of the ways in which exchange insurance keeps costs down is to use smaller in-network providers. In addition, many hospitals choose to only accept some exchange insurance products (in-network pricing) or to not accept any at all (in-network pricing).
If you’re struggling to make sense of how you’ll be impacted by Obamacare or need assistance in figuring out what’s the best health insurance route for you, contact Rea & Associates. Our team of Ohio tax professionals can help you figure out what insurance coverage best fits your individual and financial needs.
Author: Joe Popp, JD, LLM (Columbus office)