Originally published on Zen99University, where you can find more tax and insurance resources for independent contractors.
Open Enrollment is in full-swing, are you ready to take action with your health insurance?
Most independent contractors will purchase insurance through the new health exchanges, but many don’t understand the implications or what has changed. Here are the basics you need to know!
What’s the Affordable Care Act (aka Obamacare)?
The ACA was a massive overhaul of the US healthcare system, with the biggest changes going into effect in 2014. The primary goals were to increase the quality and affordability of healthcare and make it easier for individuals (including contractors) to purchase insurance.
Learn more about the Affordable Care Act, including what all health plans now have to include
When can I buy an insurance plan?
You can enroll in an individual health plan during Open Enrollment or Special Enrollment. Open Enrollment is the period each year when insurers offer health insurance plans to any individuals who would like to purchase them. Open Enrollment for 2015 coverage will run from November 15, 2014 to February 15, 2015.
If it is outside of the Open Enrollment period, you can only enroll in a normal health plan if you qualify for Special Enrollment. Special Enrollment is a 60 day period you are given when you have a “Qualifying Event” (certain government-defined life events, such as a job change).
Should I buy normal health insurance or short-term health insurance?
When you think of health insurance, you probably are thinking of what we’ll call a “normal health plan”. These plans cover you for a wide range of medical services (from routine care to serious injury) and include access to other benefits like prescription drug discounts.
On the other hand, short-term health insurance normally covers physician services and surgery, but not routine office visits or pre-existing conditions. It can also be purchased at any time of year, and is typically purchased when you are between normal health plans.
In general, you’ll want to get a normal health plan as it will cover you under far more scenarios.
What terms should I know for health insurance?
Although the Affordable Care Act simplified many things in health insurance, it didn’t solve everything — including simplifying insurance terms. According to a study done by the American Institute of CPAs, 51% of Americans aren’t able to correctly identify at least 1 of three of the following terms: deductible, premium, and copay. Can you?
Learn more about premiums, deductibles, copays, coinsurance, and out-of-pocket maximums
Do I qualify for tax subsidies to reduce the cost of my health insurance?
Starting with 2014 plans, you may be eligible for a tax credit or subsidy if you make up to 400% of the Federal Poverty Line. Depending on your income, you could pay as little as $20/month for health coverage.
Learn more about the requirements to get tax subsidies
The FPL amounts change every year, but shouldn’t change much from the ones for 2014 health coverage. If your income is on the lower end of the ranges, you’ll pay less each month than if your income is on the higher end of the range.
Still have questions? Email us at support@tryzen99.com to let us know what you want to learn!
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Zen99 can help get you set up with health insurance during Open Enrollment! Sign up now at www.tryzen99.com to receive updates and how-to steps when it starts.
Disclaimer: These posts are meant only a guide. Please hire a tax or insurance professional if you are in need of professional advice.
