Do you qualify for a subsidy with Obamacare?

As we get closer to the start date for enrollment with Obamacare (October 1st), many people are starting to learn the ins and outs of how this will affect them.  Estimates are that 2/3 of North Carolinians will qualify for some form of subsidy under the new law.

How do I know if I qualify for a subsidy?

The subsidy calculation will be based on your household Modified Adjusted Gross Income (MAGI) which can be found on line 37 on your 1040 tax form.  This is NOT your total income of your household.  This number reflects certain deductions based on your tax return.  Obamacare uses the Federal Poverty Limit to determine who qualifies for a subsidy.  You can see if you may qualify by visiting our Obamacare Subsidy page.  If you have access to affordable coverage through work, you may not qualify for a subsidy.

How is the subsidy applied?

If you qualify for a subsidy, the health insurance company you enroll with will notify the government that you have enrolled and qualify for a subsidy.  You will pay your portion of the premium (total premium minus subsidy) to the insurance company and in turn the insurance company will receive the balance from the government.

What happens if my income changes?

For those whose income fluctuates yearly, a “claw back” could impact them.  If your income changes (either increases or decreases), thus causing a change of your subsidy eligibility; the government could claw back the subsidy when you file your taxes.  This process is called “reconciling.”  If you no longer qualify for a subsidy one year but received it, the government will add what you should not have received to your income tax bill.  On the other hand, if you did not receive the full subsidy you qualified for; that amount you did not receive would be added to your tax return.  In the event that your income does change (increases or decreases) you will have the opportunity to go into the system to adjust the subsidy during the year to ensure that you aren’t over or under receiving your allotment.

Click here to learn more about the subsidy and if you qualify.



When does Obamacare in NC start?

Open enrollment for plans offered through the NC health insurance exchange starts on October 1, 2013 with coverage starting on January 1, 2014.  This initial open enrollment period will run through March 31, 2014.  After this date enrollment periods for health coverage will coincide with Medicare’s open enrollment period each year which is October 15 – December 7.

Enrollment periods are an important part of the Affordable Care Act (Obamacare).  This will help prevent people (typically the healthy and fearless) from opting not to purchase coverage and only pick it up once they become sick or have an accident. This type of thinking wont help you to much since most likely your injuries or illness will already be cured once you are able to get coverage in place….or even worse once you are able to get coverage in place you are already bankrupt from the prior years medical bills.

Enrollment is crucial for everyone and there will be a lot of moving parts.  This is why it is beneficial to work with a qualified professional to help guide you through the nuances of the plans and enrollment process.

More to come!

With healthcare reform (often referred to as “Obamacare” in the media) fast approaching, this site will quickly ramp up to speed to help North Carolinians understand their options.  A tremendous amount of guidance continues to be released from the Health and Humans Services Department (HHS) each week.  This guidance gives us more details on how Affordable Care Act (PPACA or ACA) will operated.  We in turn will digest this information and provide North Carolinians with information on how this affects them in plain English.  So bookmark us or sign up for our newsletter to be prepared for what is to come so you can decide on what’s best for you and your family.