Last-Minute Questions on Applying for Health Insurance

By Nancy Metcalf – Reposted from ConsumerReports.org

What counts as income, and extended deadlines in several states

The weekend brought in a bunch of questions from people who were trying to beat the Dec. 15 deadline to buy or renew health insurance by Jan. 1, but were puzzled by what counts toward their income in 2015.

That’s an important number, because when you fill out your application, you have to give that estimate. It determines whether you will be eligible for tax credits to lower the cost of your insurance premiums.

One reader said she and her husband planned to live off their savings for the next year and wondered if they should put down what they planned to spend from that source. Another reader was unsure whether to report his total income from self-employment , or just his Adjusted Gross Income, which was considerably lower.

Fortunately, we have lots of resources to help answer those questions.

Here’s a full explanation of how to project and report your 2015 income, including what goes into it (and what doesn’t).

And here’s a handy visual aid we created: an annotated Form 1040 that will show exactly what counts and what doesn’t.

For instance, it clearly shows that the couple who wrote in should NOT report withdrawals from a regular savings account as income for 2015. But interest or dividend income those savings will earn will count. And so will any distributions they take from a 401(k) or tax-free Individual Retirement Account.

And the self-employed reader will see that it’s the Adjusted Gross Income at the bottom of the tax form that counts, not his total income.

Enrollment deadline extended in five states

And here’s a housekeeping note for people who live in Idaho, Maryland, Massachusetts, New York, and Rhode Island. Their state-run Marketplaces have extended the deadline for purchasing or renewing health insurance if they want it to start on Jan. 1.

Here are the extended deadlines:

Idaho – Dec. 20

Maryland – Dec. 18

Massachusetts – Dec. 23

New York – Dec. 20

Rhode Island – Dec. 23

In all other states, the deadline is midnight on Dec. 15.

If you miss the cutoff in your state, you still can enroll in or switch plans up through Feb. 15. If you finish your application by Jan. 15, your new coverage will start Feb. 1. If you wait until after that, your coverage will start March 1.

Copyright © 2006-2014 Consumers Union of U.S., Inc. No reproduction, in whole or part, without written permission.

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So, What’s Going On With Those State Health Exchanges?

The following is a guest post from Senior Development Specialist and Member Liaison Tony Cheng:

On the issue of health care, the reelection of President Obama means that the Affordable Care Act (also called ACA or “Obamacare”) is here to stay, and implementation will continue on schedule. We wanted to update you on the progress of the state health exchanges, a key part of ACA’s cost-controlling measure.

According to the ACA, states are required to inform the federal government which of the three types of exchanges they will create for 2014 by November 16, 2012. The options are a state-based exchange, a partnership exchange, and a federally-operated exchange.

The Obama Administration prefers states to set up their own state-based health insurance exchanges; this is what currently exists in Massachusetts. But because of the rapidly approaching deadline, some states, while intending to set up a state-based exchange, have come to the conclusion that they aren’t able to do so in time and or lack the expertise to do so. These states are opting for partnership exchanges jointly run by the state and federal governments. The level of input states have in the partnership exchanges will be negotiated between individual states and HHS.  And then there are states that refuse to set up exchanges for whatever reason; in these states, the federal government will step in and run exchanges in these states on their behalf.

Here is what we know so far among the states that have made their plans public.

State-Based: California, Colorado, Connecticut, District of Columbia, Hawaii, Kentucky, Maryland, Massachusetts, Minnesota, Mississippi, Nevada, New York, Oregon, Rhode Island, Utah, Vermont, Washington State, West Virginia

Partnership: Arkansas, Delaware, Illinois

Federal: Alabama, Alaska, Florida (although the situation is still fluid), Kansas, Louisiana, Maine, Missouri, New Hampshire, Ohio, South Carolina, South Dakota, Virginia, Texas, Wisconsin

The setup may change from year to year, although we expect the state-based exchanges to remain relatively stable. States that opt for partnerships will likely switch over to become state-based exchanges within one to three years of implementation. For example, Illinois intends to go to a state-based exchange by January 1, 2015, a year after implementation. In addition, there will likely be some states that have federal exchanges that will decide down the road that they want to run it instead of the federal government.

While the federal exchanges will look largely the same from state to state, we predict that we’ll see more variation among the state-based exchange, perhaps in terms of the available number of products to choose from.  Also among states, there may be variations across regions.  For example, California is dividing itself into a dozen or so regions for the purposes of the health exchange (e.g. San Francisco Bay Area, Los Angeles County, Central Valley), with individuals choosing among the products available in the region in which they live.

What will remain largely the same across regions and even states are the basic components of plans in each tier (bronze, silver, gold, platinum) as much of this will be spelled out by HHS guidelines.

And this is only the tip of the iceberg. During this process, Working America will be providing information to the extent that guidelines have been issued by HHS and the information is available.

The people we talk to every night in neighborhoods across the country don’t see their health or the health of their families as a partisan issue. We sincerely hope that leaders from all sides of the political spectrum, whether or not they supported the Affordable Care Act in its development, will accept it as the law of the land and the will of their constituents.

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