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The Affordable Care Act and your health coverage options

Notwithstanding last-ditch efforts to derail the Affordable Care Act, nearly 1.5 million uninsured Ohioans will be eligible to sign up for health insurance under President Barack Obama’s signature health care law.

Open enrollment begins Oct. 1 in state-based health-insurance exchanges created by the health care law. The Web-based exchanges, officially known as the Health Care Marketplace, will allow individuals, families and small businesses to compare health plans and prices, determine if they’re eligible for federal tax credits and other cost-sharing assistance and buy coverage.

About 83,000 uninsured Ohioans are expected to enroll in the first year of coverage, which begins Jan. 1.

The website will link to health exchanges in every state and be the main portal for exchanges in 34 states, including Ohio, which have defaulted to the federal government to facilitate enrollment.

Just the opportunity to obtain guaranteed, subsidized health coverage will be a watershed moment for many Ohioans who have been denied coverage in the past because of pre-existing medical conditions or simply couldn’t afford coverage on their own.

But obtaining health coverage is also an obligation under the law’s individual mandate, which requires most Americans to buy qualified health insurance next year or pay a tax penalty.

The penalty is $95 per adult or 1 percent of adjusted family income next year, but jumps to $695, or 2.5 percent of income, in 2016. And only a small fraction of the population will be exempt from the mandate, including members of certain religious groups or Native American tribes and undocumented immigrants.

With that in mind, here are some commonly asked questions and answers about what you can do to prepare for the first year of full implementation of the health care law and the opening of the statewide health exchange in Ohio.

Q. How can small business owners enroll in the exchange?

A. Unlike individuals purchasing through the Health Insurance Marketplace, small employers with fewer than 50 employees can enroll in insurance plans through the Small Business Health Option Program, or SHOP, on a monthly basis throughout the year.

The SHOP marketplace for federally-facilitated marketplace states, such as Ohio, opens Tuesday, but businesses seeking to buy health insurance in she SHOP marketplace will have to wait at least a month before they can complete the process online, the White House announced Thursday. In the meantime, small businesses can enroll by filing paper forms. Detailed information on the SHOP application and enrollment process are available at and through the small employer call center at (800) 706-7893.

Small businesses will not be able to enroll online starting Oct. 1 when new health insurance markets go live and will have to enroll by paper.

Q. How do I know if I qualify for the exchange?

A. Anyone not eligible for Medicaid or Medicare can apply for individual or family coverage through the exchange, although tax credit subsidies to help defray the cost of insurance will be available only to those enrollees with incomes ranging from 100 percent to 400 percent of the federal poverty level. That’s a maximum of $45,960 for an individual or $94,200 for a family of four this year. FamiliesUSA estimates that more than 900,000 Ohioans will be eligible for subsidies, which are available on the exchanges.

Q. Can I buy health insurance on the exchange if I already have insurance through an employer?

A. Yes, but it may not make financial sense. You can qualify for subsidized coverage on the exchange if your employer-sponsored plan is deemed unaffordable, which the law defines as a plan with premium costs exceeding 9.5 percent of your household income. Or, if the coverage your employer provides does not meet minimum value standards set by the Affordable Care Act. Since most employers pick up anywhere from 50-90 percent of premium costs and already provide comprehensive plans for their employees, it is unlikely that a significant portion of the approximately 60 percent of Ohioans who have insurance through an employer will qualify for subsidies to lower their monthly premiums.

Q. How do I sign up?

A. You cannot apply for insurance or compare health plans until Oct. 1. In the meantime, you can create a personal account with a user name and password at Creating a personal account is the first step in the application process, which will require you to provide such information as where you live, whether you smoke or not, your Social Security number and an income estimate for 2014. The information can be submitted through paper forms, over the phone or online. Enrollment ends March 31 next year.

Q. How much will I have to spend to buy coverage on the exchange?

A. Premium costs will vary depending on your age, the type of coverage you select and where you live. But the health care law limits the amount individuals and families must pay for subsidized coverage to no more than 9.5 percent of household income. Subsidies will be calculated on a sliding scale, so the lower your income the higher your subsidy will be. The portion of your premium that can be subsidized on the exchange will be based on your estimated income for 2014. At the end of the year, the Internal Revenue Service will calculate the tax credit you should have received based on your 2014 federal income tax return, which anyone enrolling in coverage on the exchange will be required to file. If your tax credit was too high, you’ll owe additional taxes to cover the difference. If your subsidy was less than what you should have received based on your income, you’ll get a refund.

Note: Under the health care law, insurance providers cannot charge more due to pre-existing conditions or gender. But they can charge more if you smoke. Smokers can be charged up to 1.5 times the premiums of those who don’t use tobacco in most states, including Ohio.

Q. What kind of coverage options can I expect to find on the exchange?

A. Subsidized coverage will be offered in four tiers — bronze, silver, gold and platinum — reflecting the actuarial value of the health plans, or the percentage of expected medical costs that each plan will cover. Bronze plans will have the lowest value, while platinum plans will cover the most medical costs and will be the most expensive. The exchanges will also offer catastrophic plans, but they will not be eligible for subsidies. To give Ohioans some idea of what to expect, the price-comparison website calculated rates and subsidies, based on age and income, for the second-lowest-cost silver plan approved for Ohio’s exchange. The second-lowest-cost silver plan will be the benchmark plan in every state used to calculate the actual amount of your tax credit. According to ValuePenguin’s online premium calculator, a 40-year-old, non-smoker living in Montgomery County and earning $30,000 a year would have a monthly premium of $273.11 for the benchmark plan with a subsidy of $129.04. The final cost to buy coverage would be $144.07 per month.

Note: Even though premiums can vary by age — with older adults with higher medical costs generally seeing the highest premiums — the oldest adult on the exchange cannot be charged more than three times the premium of the youngest adult under the law.

Q. Will I be eligible for any other cost savings on the exchange?

A. Perhaps. In addition to premium subsidies, people earning less than 250 percent of the federal poverty level — or $28,725 for a single person and $58,875 for a family of four — are eligible for extra subsidies to offset out-of-pocket costs, such as deductibles and co-payments. In 2014, the out-of-pocket limits for most plans will be $6,350 for an individual and $12,700 for a family, but the cost-sharing subsidies will only be available to people enrolling in silver plans.

Note: The Obama administration has delayed implementing the cap on out-of-pocket costs for employer-sponsored insurance plans, but the cap still applies to exchange plans.

Q. As a small business owner, will I be eligible for a subsidy if I buy insurance for my employees on the exchange?

A. No. Businesses that employ fewer than 50 people can purchase insurance on the exchange through the Small Business Health Options Program, or SHOP. But subsidies are available only to individuals and families. However, you may qualify for employer health care tax credits if you have fewer than 25 full-time equivalent employees earning an average of about $50,000 a year or less. The smaller the business, the bigger the credit. To qualify, you must pay at least 50 percent of your full-time employees’ premium costs. The credit is available only if you get coverage through the exchange.

Q. Does the exchange have a Spanish-language version?

A. Yes. But the Spanish-language version on website will be not be ready to handle enrollments for a few weeks. An estimated 10 million Latinos are eligible for coverage. The enrollment period for individuals lasts through March 31.

Q. What if my income is too low to qualify for the exchange?

A. Anyone with income below the poverty line, $11,490 for an individual or $23,550 for a family of four, won’t be able to buy coverage on the exchange. The law had assumed that many additional people would get coverage through an expanded Medicaid program. But the U.S. Supreme Court left that decision up to each state, and Ohio is still debating Gov. John Kasich’s proposal to move forward with expansion. In the meantime, health coverage options for Ohioans without access to Medicaid, Medicare or affordable employer-sponsored health insurance are extremely limited.

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