When individuals and families buy their own health insurance, IF the insurance is greater than 8% of your “household income”, it is considered “unaffordable” and you are not required to buy health insurance. MOST Americans will find they will qualify for either Medicaid or a subsidized plan that makes insurance “affordable.”
If your employer provides insurance for you, it must be less than 9.5% of your W2 Box 1 income. Call us here at Nevada Insurance Enrollment to verify if this is for you.
To determine if your plan is unaffordable, you must compare your plan to the cheapest plan (bronze) after all subsidies have been applied, and that amount must be more than 8% of your MAGI (Modified Adjusted Gross Income) of your household income.
So we start with your household MAGI. Then we do the math to determine the person’s expected premium amount. Then we determine the subsidy (based on the 2nd lowest cost silver plan) and apply that subsidy to the cheapest bronze plan available. Then we compare the subsidized bronze plan premium to 8% of the person’s household MAGI. If the plan costs more, then it is “unaffordable,” and the person qualifies for an exemption (no tax penalty). If the plan costs less, then it is “affordable” and no exemption will be granted.
Example:
Family of 4 who’s household annual MAGI is $37,000
8% x $37,000 = $2,960
$2,960 / 12 months = $246.67 per month
2nd Lowest Silver Plan for all 4 is $400 (hypothetical)
$400 – $246.67 (Subsidy) = $153.33
Lowest Cost Bronze Plan for all 4 = $300 (hypothetical)
$300 – $153.33 (Subsidy) = $146.67 monthly premiums
$146.67 < $246.67 so the plan is affordable and the family gets no exemption.
Recent Posts
I Witnessed A Car Accident; What Do I Do?
A car accident can happen in the blink of an eye and witnessing one can be scary. After an auto accident, all drivers involved are required to stay at the scene where information is exchanged for auto insurance purposes. But what should you do if you witness a car wreck?
Accidents / Vandalism: Does Auto Insurance Cover Personal Belongings?
Personal items such as a tablet, wallet, or any personal valuables are not generally covered in your auto insurance policy. Those items would be covered in your homeowners/renters policy. You would have a deductible to pay for first, and then you’d need to consider the consequences of a claim on your homeowners policy.
Windshield / Glass Coverage
Windshield / glass coverage pays the amount of a covered glass loss, and as an added perk, it has a low deductible. Your insurer will cover the full costs of the repairs up to your policy limit, and as long as the costs of the damages don’t exceed your coverage limit, you’ll pay only your small deductible.