New York Health Insurance

Do you need to buy Health Insurance In New York to avoid the Obamacare tax penalty?

Answer: Yes

The Affordable Care Act is a federal law, all citizens under the age of 65 and not below the poverty line must enroll in an ACA compliant plan or they will be subject to a tax penalty.

For 2016 the tax penalty for not having ACA compliant health insurance for at least 9 months of the year is 2.5% of your household income or $695 per person. Whichever is higher.

This is a huge increase from 2015 (2% of household income or $325 per person) and has impacted millions across the US. The sad reality for those without health insurance (ACA compliant) is that the law was written to increase every year with inflation.

The worst part of this law for those in New York and elsewhere in the US without ACA compliant health insurance is the fact that the IRS has now linked up electronically with the major health insurance providers. What does this mean? The IRS will basically know who should have had Health Insurance and basically who to come after for the tax penalty regardless of how you completed your tax return. Also the exemption form that worked so well in the past is gone. You now have to apply for an exemption electronically on the healthcare.gov site which of course is anything but easy. One would think that billions upon billions of dollars spent would result in a fairly decent website, but then again we are talking about our government. In New York and the rest of the US, if you do not have ACA compliant health insurance and make more than the poverty line expect to pay the tax penalty.

Obamacare in New York and throughout the rest of the US is in a real bad situation. The younger enrollees that make the law function as intended have not signed up, period. There is no real indicator that points to that trend changing. The best thing New Yorkers can do is find a plan that covers the minimum essential components to avoid the tax penalty, while using an underwriting component to keep the costs down.

People that have pre existing conditions should simply get the best Obamacare plan available in New York while those without pre ex should get a health insurance policy of the exchange (unless price does not matter) and make sure it is ACA compliant. The question to ask your broker is: “will I receive a 1095a form at year end?” If the answer is “no” move along, no matter how good the plan sounds. There are several Health Insurance options in New York that are ACA compliant and not on the exchange.

Types of Health Insurance Plans offered in NewYork

HMO

HMO stands for Health Maintenance Organization. HMO’s are becoming more and more popular as insurance companies attempt to reduce costs by building larger networks. The more members they have, the more barganing power they have with hospitals and doctor networks. A majority of Obamacare Plans use HMO networks in an attempt to keep costs down. The reality is that health insurance companies don’t stand a chance of being profitable with in the current framework regardless of the network the plan uses. Because these plans must accept all pre-existing conditions and meet all minimum essential coverage requirements, the quality of service and access to doctors has gone down dramatically. HMO plans are strict with regards to going out of the network and often either covering nothing or very little for those that use doctors outside the network.

PPO

PPO stand for Preferred Provider Organization and refers to plans that typically have smaller networks focused on quality of service and more provider options with no required referrals. PPO plans are typically priced about the same or slightly less than HMO plans, unless the consumer qualifies for subsides, because these plans often have restrictions on preexisting conditions. A majority of Obamacare plans do not use PPO networks due to their cost for the insurance company and due to the fact that many PPO networks are not part of the ACA Exchange Networks.

What is the best Health Insurance Plan offered in New York?

This depends primarily on your budget and your health. If you can afford a local PPO network with a deductible at or under $2500 and meets the minimum essential coverage requirements prescribed by Obamacare, you should take it. This plan will offer excellent doctors networks, you will not be subject a tax penalty and you will not have to get referals to see a specialists.

If you qualify for a subsidy or cannot afford PPO plans in your area there are some decent HMO Plans in New York that offer catastrophic coverage to cover any major health events.