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If your company has 50 or more full-time employees, it will be required to offer an insurance plan with Minimum Essential Benefits -- emergency care, hospitalization, maternity and newborn care, mental health and substance abuse services, prescription drugs, lab services, preventive care -- or face a penalty, but not until 2015.
Is the exchange for me? Maybe, but probably not considering a lot of larger employers do offer health insurance to their employees even though it's not required. If you have insurance, you can still shop the exchange if one of these conditions applies:
1. Your company pays less than 60 percent of your health insurance premium.
2. You pay more than 9.5 percent of your pre-tax income for your employer-sponsored health insurance.
To find out if you fall into one of these categories (they sound the same, but they aren't), ask your human resources or benefits person how much your company is kicking in toward your health insurance and how to figure out what percentage of your pre-tax salary is going toward your plan's premium. Your employer is required to share this information.
The tax credit you get when you shop on the exchange is based on how much you make and is used to help pay for your insurance. You can use the credit as a deduction from your monthly insurance costs or as an annual deduction at tax time. Expect to pay between 2 percent (minimum) and 9.5 percent (maximum) of your income for insurance if your earnings fall into any of the below ranges:
- $11,490 - $45,960 for a single person
- $15,510 - $62,040 for a family of two
- $19,530 - $78,120 for a family of three
- $23,550 - $94,200 for a family of four
If you earn more than that you won't qualify for tax credits and without them, insurance premiums might be the same or more expensive than an employer-sponsored plan.
What else do I need to know? Starting in 2015, your employer will have to provide coverage that costs no more than 9.5 percent of your income. The employer also must cover at least 60 percent of the cost of the plan or face a tax penalty.
Any company doesn’t provide coverage will be charged $2,000-$3,000 per employee, called the “Shared Employer Responsibility Payment.” While the average premium for an employer-sponsored family health plan is about $16,000 per year, it's unlikely companies will stop insuring their employees since health insurance is a standard part of most benefit packages.
What if I don’t buy coverage? You’ll pay a tax penalty of either 1 percent of your income or $95 per adult and $47.50 per child for the year, whichever is higher. In 2016, the penalty increases to 2.5 percent of income or $695, whichever is higher. Plus, anyone without health insurance will have to pay the full cost of medical care should they need it. You won’t have to pay a penalty for not having insurance if you fall into one of these categories.
You qualify for Medicaid but your state didn't expand the program
Your state’s health exchange doesn't have a plan you can afford (costs less than 8 percent of earnings)
You spent less than three months without coverage
You’re a member of a recognized religious group with objections to insurance and government programs, including Social Security and MedicareFor more on who is exempt visit Healthcare.gov.
Now, use our tool to figure out how much a new health insurance plan will cost plus learn about important dates and coverage in your state.
Sources: The Kaiser Family Foundation, the U.S. Small Business Administration, Centers for Medicare and Medicaid Services, the U.S. Internal Revenue Service, the Health Insurance Marketplace, U.S. Census Bureau and the UC Berkeley Labor Center.