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5 Tips for Navigating Health Insurance Subsidies

If you’re one of the millions of Americans who intends to enroll in individual health coverage via the Health Insurance Marketplace (www.healthcare.gov) before the end of 2014’s open enrollment period, here are some tips to help you along the way.

1)      Open enrollment ends on March 31, 2014.  With the exception of qualifying events (e.g., job change, including coverage loss), the next open enrollment period won’t begin until November 15, 2014—and that’s for coverage that begins on January 1, 2015.  Outside of enrollment periods, it is not possible to qualify for subsidies.

2)      Understand who’s in your tax household.  Many factors, including household size, are used to determine whether or not people are eligible for subsidies.  But what is a household?  For the purposes of subsidy qualification, anyone included in a family’s tax filing is included in the household.  This is important not only for defining household size, but also for determining income—both of which are important to subsidy qualification.  2014 is the tax year that’s most important to 2014 subsidies.

3)      Estimate your 2014 MAGI.  On your Marketplace coverage application, you’ll be asked to estimate your household’s 2014 MAGI.  MAGI is Modified Adjusted Gross Income, and it is one of the factors used to determine subsidy eligibility.  Use this one-page reference to learn more about MAGI.  Again, the total MAGI of everyone in the tax household (see the second point, above) is what’s relevant to subsidy determination.

4)      You’ll settle up with the IRS at tax time.  If you qualify for a subsidy, you can request that all, some, or none of it be applied to your monthly premium when you apply for coverage.  The subsidy will be paid directly to your insurer.  The insurance company will bill you for the balance of the monthly premium.  If you’re off on your 2014 MAGI estimate, you’ll reconcile with the IRS on your 2014 tax filing.

5)      For help choosing a plan that’s right for you or your family, find a trustworthy health insurance professional near you.  The National Association of Health Underwriters (NAHU) has a useful online tool to help consumers find agents in their area who have agreed to adhere to a consumer-oriented Code of Ethics. To try the tool, click here.  Agents who are Marketplace certified are well-qualified to help you understand, and apply for, subsidies for which you might be eligible.

Have questions?  Post them at www.mihealthanswers.com, or email them to advisor@mihealthanswers.com.

This post was contributed by Shannon Saksewski (Health Education Program Manager, Detroit Regional Chamber).  Shannon can be contacted at ssaksewski@detroitchamber.com.