ObamaCare and You: Have you looked at your purchase options? ~ Part II

1040 Tax Form

If you attempted to enroll into a health plan online via healthcare.gov, healthbenefitexchange.ny.gov or coveredca.com in the past few weeks, you may have had difficulty getting on. Or maybe not! There were several hours during which the system was down, but bear with it. Glitches are bound to happen when millions of people are trying to access one website to gather important information about obtaining coverage for healthcare. While you are waiting for the glitches to be ironed out, do you know how much money you will make in 2014?

You are required to enter your projected annual salary before you purchase any health plan under Obamacare, which means that you need to inform the government of how much you think you are going to make in 2014. Be very careful not to underestimate or overestimate your yearly income by too much. Why, you may ask? Let’s say you pick a health plan that you want to purchase. Let’s call the health plan Your Choice Health Plan for example. You notice that Your Choice Health Plan is the best plan for your individual needs. You tell the government that you’re going to make $25,000 this year. The government says, “hmmmm, ok, we will pay $170 per month as a subsidy toward your monthly health plan payment to Your Choice Health Plan and you only have to pay $36 out of your pocket per month for this plan.” The government will help you by paying $170 out of the $206 that it costs to purchase Your Choice Health Plan based on your income.

What happens if you switch jobs in June 2014, and your projected income is now $35,000 for the year? You have to make sure that you let the government know that you are making more money, because the $170 subsidy that the government paid to Your Choice Health Plan will decrease. The government might pay only a $150 monthly subsidy to Your Choice Health Plan, which means that you are now required to pay $56 per month to Your Choice Health Plan because your income is higher. The government determines how much subsidy you receive based on how much you make per year. This is the reason why it is very important that you give the government the closest estimate of your 2014 income.

So what happens if you switch jobs in June 2014, and you don’t let the government know? If you never informed the government that your income increased in June 2014, and it comes time for you to file your 2014 federal income tax;  the government will take that $20 subsidy per month that you weren’t supposed to receive, starting June 2014.  They will take the full $120 from your federal income tax if you get a refund. If you owe on your federal income tax return, then you’ll have to add that $120 for being overpaid a $20 subsidy per month for 6 months to the amount you owe.

So, your payments should look like this chart below because you let the government know that your yearly income went up starting June 1st:

Month in 2014

You Pay

Government Pays

January

$36

$170

February

$36

$170

March

$36

$170

April

$36

$170

May

$36

$170

June

$56

$150

July

$56

$150

August

$56

$150

September

$56

$150

October

$56

$150

November

$56

$150

December

$56

$150

It should look like this chart below if your income did not change in the 2014 year:

Month in 2014

You Pay

Government Pays

January

$36

$170

February

$36

$170

March

$36

$170

April

$36

$170

May

$36

$170

June

$36

$170

July

$36

$170

August

$36

$170

September

$36

$170

October

$36

$170

November

$36

$170

December

$36

$170

If you forget to let the government know how much you’ve made, you will have to pay the difference in the monthly subsidy when you file your federal income tax. So make sure you keep the government in the loop with regards to your income.

I have attempted to access the www.healthcare.gov site on several occasions and was able to get onto the site without a problem. I also checked out the chat online feature last Sunday, and it took 20 minutes for a live person to start chatting with me. So please be patient. Some people have been waiting their entire life for accessible, affordable healthcare. The 20 to 30 minute wait may seem long, but isn’t it great to know that you have lots of options to choose from? Until next time…

~Dr. Dee

Leave a Reply

Your email address will not be published.