Personal Finance: What you need to know about approaching Obamacare rollout

Personal Finance: What you need to know about approaching Obamacare rollout

September 18th, 2013 Chris Hopkins in Business Diary

Chris Hopkins

Photo by Patrick Smith/Times Free Press.

Implementation of the Patient Protection and Affordable Care Act has been anything but smooth. While some provisions have already gone into effect, others have been delayed or canceled, and hundreds of temporary waivers have been issued to corporations and states that cannot comply within the required timeframe. To say the least, the complex and costly plan is not yet ready for prime time.

Yet one important provision affecting millions of Americans is still due to launch next month. Effective Oct. 1, individuals who are not covered by medical insurance and are not exempted by the statute must begin the process of buying health insurance coverage or pay a penalty. Open enrollment for the new government-approved plans for individuals runs through March 31, 2014, after which time the window closes and non-compliance fees will be assessed.

If you currently participate in Medicare, Medicaid, or an approved employer plan, you are considered covered. If not, you must seek coverage through your employer if available or through the new exchange mechanism mandated by the ACA.

The Obamacare plan encourages (but does not require) each state to set up a Health Care Marketplace (commonly called an exchange) through which to offer private insurance plans to individuals currently lacking coverage. Roughly half of the states have elected to establish their own marketplace, while half (including Tennessee and Georgia) have abjured. In the latter case, the federal government will run the exchange on behalf of the state.

Within each state exchange, the law mandates certain minimally acceptable benefits but allows additional optional coverage, and grades the offerings for comparison. Standardized plans are designated as Bronze, Silver, Gold and Platinum (like your frequent flier plan) and priced accordingly. As yet, the pricing of these plans has not been disclosed but is due by Oct. 1.

Here is the bottom line. If you are not covered in 2014 by an approved plan, you must pay a penalty. For the first year, the individual fee is the greater of 1 percent of income or $95, with a family maximum of $285. The penalty ratchets up to $695 per adult, or $2,085 per family, in 2016. Exemptions are available if you can demonstrate a financial hardship, are a member of a recognized Indian tribe or are incarcerated (the minimum sentence is still unclear). Participants with incomes below 400 percent of the poverty line are afforded subsidies to cover some or all of the premiums.

Overwhelmed? Fortunately, help is at hand. The law provides for assistance in negotiating the complicated process. Unfortunately, that assistance was designed by the very same architects of the byzantine plan itself, and is therefore nearly incomprehensible. Government-licensed "Exchange Enrollment Facilitators" are further subdivided into three classifications: Navigators, Enrollment Assisters, and Certified Application Counselors. Somewhat less than user-friendly.

Here's your best bet: go to the website www.Healthcare.Gov. It is actually quite helpful and easy to use, with a good list of frequently-asked questions. There you can find a concise overview of the plan's impact on you as an individual, links to your state's exchange (or the Federal default), and downloadable mail-in forms. You can also call 1-800-318-2596 for direct assistance.

Christopher A. Hopkins, CFA, is a vice president for Barnett and Co. Investment Counsel.