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Insurance 101

1. Are my medications covered?

How are my medications covered under my ACA or Obamacare plan ? Not all prescribed medications are covered even under the Affordable Care Act.  Each insurance company has a formulary list or preferred brand drug list showing you which medications are covered under your plan and how much will you pay for them.  If you are under a supervised chronic condition treatment, make sure your licensed health insurance agent is aware so he or she can do the research to help you manage your medication costs for the next year.  These lists are available for download or online search tools provided by the carriers.

2. Where do I go if I have an emergency?

Under the ACA and if you have a medical emergency all Hospitals are in-network,  meaning you can be treated for a medical emergency anywhere in the country.  Beware however that not all carriers have covered emergencies in-network and you must use the urgent care network if you visit an urgent care instead of an emergency room.  Not understanding this coverage can either leave you with a sizable bill or responsible for the charges.    Ask your licensed health insurance agent to look  at the summary of benefits from the insurance plans you are considering before you decide.

3. How is my chronic condition covered (diabetic, etc)

One of the significant changes implemented after the law passed is that an insurance carrier not only has to provide for pre-existing condition treatments but you can not be denied coverage if you suffer from a chronic condition.  So the short answer is, yes, your chronic condition is covered.  What is more at stake as a consumer is understanding the yearly cost of managing your condition as not all insurance plans might cover your medications or expose you to higher out-of-pockets.

4. I am pregnant, am I covered?

Pre-natal care and delivery are covered as part of the law. Two items to consider:  If you are new to the ACA and aware that you are pregnant it is possible you will be referred to your State’s medicaid program upon your application.  If you are planning to become pregnant have your licensed health insurance agent research the estimated costs and provider networks as these two categories should influence your decision and vary.

5. I need a surgery, am I covered?

Surgeries whether they are inpatient or out-patient will fall under the hospitalization benefits  of your plan.  Some outpatient surgery benefits are unique to carriers and their plans and covered with a fixed co-payment.  Others will make you responsible for the deductible and out of pocket maximums.  In the event of a surgery requiring an in-patient hospitalization  you will be responsible for the deductible and out-of-pocket maximum.  There is a customary approval process involving your doctor and the insurance company as there are some, rare exceptions of limited coverage.

6. What would my cost be if I have an emergency?

If you have a medical emergency you are going to either have a fixed co-payment or you will be responsible for the deductible and any out-of-pocket maximums.  These benefits are unique to each carrier and specific plans. You need to ask your licensed health insurance agent to explain them before you decide.  Emergencies are more common than hospitalizations so you might prefer a plan with a fixed-copayment.  Have your agent look at  the summary of benefits.  Emergencies under the ACA are covered nationwide but we have seen carriers with limited out of network benefits.

7. What much will a hospitalization cost me?

For an inpatient hospitalization you will be responsible for your plan’s deductible and coinsurance until you reach your out of pocket maximum.  The average cost for a 3 day stay in the US is $30,000.00. We can assume one average hospitalization will make you responsible for your total out-of-pocket for the year.  It warrants we take a minute explaining how this works.  For illustration let’s assume you have a $2500.00 deductible, 30% co-insurance and a maximum out of pocket of $7150.  In a 30K hospitalization you would be responsible for the first $2500.00.  If we subtract that from the 30K, the insurance carrier will now cover 70% of the remaining $27,5000.  When your 30% plus your deductible exceeds your out-of-pocket maximum you are covered at 100%.  In the above example, just the 30% of the $27,500 is higher than the hypothetical $7150 out-of-pocket maximum.  Beware that these figures are drastically different if you receive care out of your plan’s network, or if your plan has no out of network coverage and due to an emergency you must have surgery in a non covered facility.  This is a source of much confusion and we invite you to call us with your questions regarding .

8. What if I need an MRI?

Lab work, simple and complex diagnostics need a prescription from a licensed health professional.  That’s not all.  For more complex diagnostics such as an MRI or CT Scan, you will need approval from your insurance carrier and sometimes this is a frustrating process as your doctor must prove a need for the test.  Your summary of benefits will explain whether you have a fixed co-payment for this service or responsible for the deductible and coinsurance.  We like to recommend when possible carriers and plans covering this benefit with a fixed co-payment.

9. Is there a cost to use an agent?

No, there are no additional costs to use an agent.  What are the advantages using an agent? For starters, a licensed health insurance agent must pass a rigorous state test plus federal certifications to offer health insurance.  In addition and to maintain the license active, agents must also prove continuing education to their home state, many with years of experience in the field.   A licensed health insurance agent will make sound recommendations focused on the individual needs of the consumer.  The other advantage and if you’re dealing with an agency, is that you will have additional customer service to help you with any issues regarding your coverage including help with the marketplace.

10. Why did I lose my tax credit?

Losing your tax credit is probably caused by one of these scenarios: not submitting required documents to the marketplace, the marketplace deeming submitted documents not sufficient, or your income increased beyond what your original ACA application disclosed.  Please pay close attention to any letters the marketplace sends regarding needed documents and provide them in a timely manner.  You can either upload them or mail them and we recommend that you do both for safe-keeping.  Remember that you will responsible via your tax return for any subsidy you would have not received on an increase in your income.

11. Why are they asking for so many documents?

The marketplace has guidelines for receiving subsidies ranging from income thresholds, legal status in the US and whether you are being offered insurance from your employer.  Being offered insurance from your employer and if you work for a company classified as a large group with 50 employees or more will usually disqualify you from subsidies and if you received subsidies you might have to return the money in your tax return.

12. How should I send my documents via mail?

When the marketplace is requesting additional support documentation the letter sent to you will give you options on what to send and there will be one document with a code which must be included when you mail.  We recommend that you include your name and social security number on anything you send for quicker verification.

13. What is the actual income information I need to provide?

The marketplace considers you tax return, w-2, 1099, paystubs, profit and loss statement if you are self-employed and letters explaining changes of income as valid proof.  Sometimes you might have to send a combination of the above examples.  Keep in mind that the marketplace is interested in your current income as it is possible you might earn less that your most recent tax return.

14. Can I change my plan during the year?

There are circumstances which will allow you to change your plan provided you qualify for a special enrollment period.  Following are the categories allowing a change or getting insurance outside of the open enrollment:  loss of coverage, changes in household size, change in residence, and/or change in legal status.

15. Can I update my information during the year?

The answer is yes and the marketplace encourages that you notify changes that will impact your premium or plan such as income or a qualifying life change.  Remember that underreported income  will generate a tax event when you file.

16. What it is the minimum and maximum to apply?

There is no minimum or maximum income to apply, however your income will determine if you qualify for a subsidy.  In a non-medicaid expansion state, to qualify for help your income must be between 100% and 400% of the federal poverty line.  If your income is below the 100% you will fall into the medicaid gap and not receive subsid. If you are above the 400% threshold you must pay the full premium as declared by the insurance carrier of your choice.  If you live in an expansion state and your income is below 138% of the federal poverty line you will qualify for medicaid benefits.

17. Can I apply if I am married and file separate taxes?

You may apply but as of now you will not receive a subsidy even as an individual your income might qualify.

18. If I don’t qualify for subsidy will I get fined?

A fine under the ACA is triggered by not having a qualified health plan the year prior to your current tax filing,  however  if your income was below the declared threshold for the state where you live you will not be fined.   Be careful of companies offering plans that are not insurance or ar not a qualified health plan.  All individual plans under the ACA and regulated by the Department of Health and Human Services offer the essential health benefits. If you qualify for a subsidy and if you do not buy insurance you will be fined on your next tax return.

19. Dental and Vision.

Dental coverage for individuals under the age of 19 is regulated by the law.  Some companies add them automatically  to the health plan for minors, others must be purchased separately.  Adult dental and vision is not regulated by the ACA but can be purchased throughout the year.

20. What is the fine for not having health insurance in 2017?

The shared responsibility for not having qualified health coverage will be 2.5% of your income or a flat fee per adult of $695 and a flat fee per each child of $347.50, whichever is greater of the two figures,  not to surpass the average cost for a bronze plan.  (the per person fee increases yearly due to inflation)  Let’s show you a couple of examples from the marketplace:

Example 1. Unmarried with no dependents, 40,000 yearly income

Jim, who is unmarried with no dependents, doesn’t have qualifying health coverage for any month of 2016. His household income in 2016 is $40,000.

  • Per-person fee: $695
  • Percentage-of-income fee:
    • $40,000 (2016 household income) minus $10,150 (the tax filing threshold for individuals – for 2014, the most recent figure available) = $29,850
    • 5% of $29,850 = $746.25

The annual national average premium for a Bronze plan is $2,448 (also based on 2014 figures).

  • $746.25 (Jim’s percentage-of-income fee) is less than $2,448 (the maximum percentage-of-income fee), so the maximum doesn’t apply.
  • $746.25 (Jim’s percentage-of-income fee) is higher than $695 (his per-person fee).

So Jim’s 2016 fee would be $746.25. He’d pay it when he files his 2016 federal income tax return, which is due in April 2017.

If Jim had qualifying health coverage for any month of 2016, he’d owe 1/12 of the annual fee for each month he’s uninsured.

Example 2: Married couple with 2 children, $70,000 income

Eduardo and Julia are married and have two children under 18. No family member has qualifying health coverage for any month of 2016. Their 2016 household income is $70,000.

  • Per-person fee: $2,085 (2 adults at $695 each, plus 2 children at $347.50 each)
  • Percentage-of-income fee:
    • $70,000 (2016 household income) minus $20,300 (the tax filing threshold for married couples filing jointly – for 2014, the most recent figure available) = $49,700
    • 5% of $49,700 = $1,242.50

The annual national average premium for a Bronze plan that covers the family is $9,792 (also based on 2014 figures).

  • $1,242.50 (the family’s percentage-of-income fee) is less than $9,792 (the maximum percentage-of-income fee), so the maximum doesn’t apply.
  • $2,085 (the family’s per-person fee) is higher than $1,242.50 (the family’s percentage-of-income fee).

So Eduardo and Julia’s 2016 fee would be $2,085. They’d pay it when they file their 2016 federal income tax return, which is due in April 2017.

If Eduardo and Julia’s family had qualifying health coverage for any month of 2016, they’d owe 1/12 of the annual fee for each month they’re uninsured.

Affordable Care Act Plans