Information for self employed: : As a business you have no employees but need to discover options for your personal healthcare insurance.

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Important Dates for Self-employed Individuals

  • November 15, 2014 - Febraury 15, 2015:  Marketplace opens for 2015 enrollment

NOTE:  If you have qualifying life changes, you may enroll in Marketplace outside of open enrollment periods.

If you are an individual who operates a small business and does not have employees, you qualify as a self-employed individual within the Affordable Care Act guidelines.

The same health care insurance options that are available to individuals apply to the self-employed business owner. Depending on your income level and household size, you may also qualify for income tax credits towards the cost of insurance that is purchased through the public health exchanges (Health Insurance Marketplace).  You will have the option to purchase insurance coverage through your own private insurer, which does not qualify you for tax credits.

?Nebraska Blue Cross/Blue Shield provides a good overview of individual health insurance coverage options at AskBlue. Enter your zip code, gender and select “Individual.”

Individual Share-Responsibility

Starting in 2014, the individual shared responsibility provision of the ACA calls for each individual, including children to (1) have basic health insurance coverage (known as minimum essential coverage), or (2) qualify for a statutory exemption or (3) plan to make a shared responsibility payment (penalty tax) when filing a federal income tax return.

Individuals will not have to make a payment if:

  • coverage is unaffordable,
  • if they spend less than three consecutive months without coverage,
  • or if they qualify for an exemption for several other reasons, including hardship and religious beliefs.
    (Source: U.S. Treasury)

►See Requirement to Buy Coverage chart provided by the Kaiser Family Foundation to check if you meet the requirement for coverage. The chart also shows what penalties will apply if insurance is not purchased and you meet the requirement threshold.

  • 2014 penalties - $95 per adult and $47.50 per child, up to $285 for a family OR 1% of family income, whichever is greater.
  • 2015 penalties - $325 per adult and $162.50 per child, up to $975 for a family OR 2% of family income, whichever is greater.
  • 2016 penalties - $695 per adult and $347.50 per child, up to $2,085 for a family OR 2.5% of family income, whichever is greater.

►See also the Health.gov explanation of penalties: What if Someone Doesn't Have Health Coverage in 2014.

Determining Health Care Needs

To help determine your insurance needs, the University of Maryland Extension has developed worksheets to use as planning guides:

Individuals who are self-employed may choose to purchase insurance through the federal Marketplace exchange, member-owned cooperative, or through a private insurer. Plans should be carefully evaluated for out-of-pocket costs (co-pays, premiums and deductibles), benefits provided, and the scope of doctor/service networks available to you and your area.

 Current or Grandfathered Plan

If you already have a health insurance plan that was in existence on March 23, 2010, you may be able to keep your existing or "grandfathered" plan. These plans are not subject to many of the ACA law changes. Review your existing plan, check with your insurance company, and refer to the article, "What if I have a grandfathered health insurance plan?" for consumer protections your plan must or need not have to qualify as a grandfathered plan.

If you choose to stay with your current plan, you will not be eligible for health care subsidies that could be applied toward your premium payments in 2014. To qualify for the health subsidies, you must purchase health coverage through the federal exchange.

Transitional Policy Changes and Delays

President Obama announced on November 14, 2013 a transitional policy that allowed individuals who have ACA noncompliant insurance policies to keep their current policies to October 1, 2014 without ACA enforcement. On March 5, 2014, this policy was extended to two-years for individual and small group health plans.  The extension allows insurance companies to renew non-compliant ACA policies on or before October 1, 2016.  Depending on the policy year, this may extend these non-compliant insurance policies into 2017. 

Nebraska symbolOn April 30, 2014, the Nebraska Department of Insurance issued a notice stating that Nebraska insurers issuing individual and small group policies can follow the federal transitional policy and delay implementation of ACA compliant policies to October 1, 2017, based on plan anniversary dates, but only if the original plans were issued prior to January 1, 2014.  All other plans issued after January 1, 2014 must be ACA compliant.

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Individual Insurance Marketplace

Coverage through new federally-funded health insurance marketplaces for individuals and small businesses will be in place January 1, 2014 with open enrollment beginning October 1, 2013.  For information on individual enrollment, visit these locations on Healthcare.gov:

Individual health insurance marketplaces will offer a choice of four levels of benefit packages that differ by the percentage of costs the health plan covers. The "metal values" are designed to help you effectively compare and select your individual health coverage based on the defined structures and benefits offered within the plan. 

 ACA Metal Levels

Advance Premium Tax Credit.

Individuals and the self-employed may qualify for premium tax credits or subsidies. The amounts are based on your individual and family Modified Adjusted Gross Income (source: UC Berkeley) and are available on a sliding scale with higher income receiving less tax credits. See also, What income and household information do I provide when I apply for Marketplace coverage?

To qualify for tax credits, individuals must meet the following criteria per IRS guidelines:

  • Purchase health insurance coverage through the federal Marketplace.
  • Do not have access to affordable coverage through employer or government plan.
  • Income falls within the 100% to 400% of the Federal Poverty Line (FPL).
    • For 2014 policies, income falls between $11,490 and $45,960 for individuals; $23,550 and $94,200 for a family of four.
    • For 2015 policies, income will fall between $11,670 and $46,680 for individuals; $23,850 to $95,400 for a family of four.
  • Do not file a Married Filing Separately tax return, unless meet criteria in Notice 2014-23 for certain domestic abuse victims.
  • Are not claimed as a dependent by another person.

If eligible for the credit, some or all of the estimated credit can be paid in advance directly to the insurance company to lower out-of-pocket monthly premium costs OR the tax credit paid when filing the 2014 tax return.

The following charts provides an estimate of premium contribution levels per income range.  The chart is for 2014 policy rates.

Estimated Individual and Family Insurance Subsidy Levels.
(Source: Center on Budget and Policy Priorities)

 

Changes in Circumstances. Report any changes in income and family size to the MarketPlace as these changes will affect your estimated tax premium credit amounts.  Receiving too little or too much can affect your refund or balance due when you file your tax return.  For example, if you have greater than expected income than first reported when you purchased your Marketplace coverage and it exceeds the amount of tax credit you are eligible to receive, you will be obligated to return the extra tax credit when you file your tax return, either as a reduced refund or balance due payment.  However, the amount to be repaid will depend on income levels, see below chart. 

Potential Exposure for Premium Repayments
(Source: Center on Budget and Policy Priorities)

Out-of-Pocket Costs

Starting in 2014, ALL qualified health plans will have a maximum out-of-pocket limit, whether they are purchased through the Marketplace or through an private insurer.  This is the maximum amount that you must pay before your health insurance company starts paying 100% of the covered health benefits.  This includes deductibles, coinsurance, copyaments or other charges requiring individual payment. Limits do not apply toward premiums, non-emergency out-of-network providers or other non-essential health benefits.  Check with your insurance company for benefit coverages. 

  • 2014 - Maximum out-of-pocket costs for individuals is $6,350 and families, $12,700. 
  • 2015 - Maximum out-of-pocket costs for individuals will be $6,600 and families, $13,200
  • 2016 - increase for cost of medical inflation

If you purchase your insurance through Marketplace, and depending on your income level, you may qualify for lower out-of-pockets costs

Out-of-Pocket Subsidy Reduced Levels
 

 Individual

Families
Income 100-200% FPL $2,250 $4,500
Income 150-200% FPL $2,250 $4,500
Income 200-250% FPL $5,200 $10,400
 
 
 
 
 
Premium Credit & Subsidy Calculators

See what subsidies you may qualify for that will help with your insurance premium costs. Calculators available at

 Discover more about the Marketplace Option

  • Marketplace assessment - Learn more about your qualification for the public exchange insurance by taking an assessment that looks at your individual and family circumstances.
  • Enrollment preparation - Get ready to enroll in the Nebraska Marketplace by reviewing the nine preparation steps provided on Healthcare.gov.
  • Plan options - Visit FinderHealthcare.gov to discover what plans may be available to you. (Information for Nebraska's insurance providers is currently not available.)
  • Summary of Benefits and Coverage (SBC) - Review the SBC video (Source: Catalist Consulting) about the new SBC required documents.

More information about individual enrollment procedures and assistance is forthcoming about the federal marketplace.

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Member-owned CO-OP

Non-profit health insurance cooperatives, called Consumer Operated and Oriented Plans (CO-OPS) are authorized under Section 1322 of the ACA law. They are an alterative to the individual and small business exchanges operated by state and federal governments. The CO-OPs are formed as nonprofits and controlled by and operated on behalf of their members. There are 24 CO-OPs authorized across the United States. CoOportunity Health, based out of Des Moines, Iowa is authorized for Nebraska and Iowa and will open for business on October 1, 2013.

The objective of the CO-OPs is to create a new competitor to help drive down local consumer costs. Profits made by the CO-OP must be used to lower premiums, improve benefits or sustain programs that with enhance the quality of health care to its members. There are concerns about the long-term viability of the CO-OPs since they are designed for the higher-risk individual and small business markets.

There are concerns about the long-term viability of the CO-OPs since they are designed to operate in the riskier individual and small business insurance markets. Key will be to find a rapidly growing CO-OP that has a sufficient health provider network to meet you and your family's needs.

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Catastrophic Insurance

Individuals under 30 years of age and those who received a "hardship exemption" may purchase a catastrophic plan and still meet the Individual Shared Responsibility requirements.  A catastrophic plan will usually have lower premiums than a comprehensive plan, but you will pay more out-of-pocket costs.  These types of plans are usually purchased to cover worst-case scenarioes rather than basic health care needs such as doctor's visits.  If you purchase a catstrophic plan through the Marketplace, these plans will include basic preventive services.  

There are two categories for hardship exemptions:

To apply for an exemption, there are two options:

Disclaimer

Information provided here is from a variety of resources managed by government agencies, professionals, organizations, and non-profits. The information is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal or state tax penalties.

There is no implied or intended endorsement by UNL Extension of any website,  information, or videos provided within this website. Nor is there any implied endorsement by the creators of the information and videos used within this website to UNL Extension.  Use of the information is for educational purposes only and is designed to serve as a starting point for you to further discuss your business options with an attorney, accountant, human resource (HR) consultant, or other advisor who is well-versed in the new health care regulations.

UNL Extension ACA Team

For questions or additional information, email:  ACAbizNE@unl.edu

Phone:  Marilyn Schlake (402.472.4138); Carroll Welte (402.374.2929); Jim Crandall (308.995.3889); Charlotte Narjes (402.472.1724)

 

 Other business types
Farmer & Rancher business
25 or less employees
50 or less employees

Health Reform Q&A's

Have questions about eligibility across state lines, the tobacco surcharge, student status, Marketplace verification, appeals and more?

The Kaiser Family Foundation has the answers to many of your questions at Health Reform FAQs.

 

Overview of PPACA


(Source:  Khan Academy)
To enlarge, click on the open square in the lower right corner.

How do Obamacare Subsidies Work?


(Source:  eHealth Insurance)

Premium Tax Credit (Captions & Audio)


(Source:  IRS)

Overview of Individual Mandate Requirements


(Source: FSIMediaGroup)