What Realtors can do to make sure they and their families have adequate health care
Many real estate professionals are facing cancellations or drastically increased fees for their health care in 2014. If you or someone you know is facing loss of your current policy or additional fees, you do have options. The Patient Protection and Affordable Care Act (“Obamacare”) has dominated the headlines since the government’s health insurance marketplace, HealthCare.gov, went live in what has become perhaps the worst website debacle ever.
The idea that the government can fix it in a few short weeks goes against this simple fact: If Microsoft and Apple can’t get their systems right at launch, how can anyone realistically expect this to be repaired in such a short period of time? While the website parodies keep coming and the politicians scramble for a solution, what can you do to make sure that you continue to have adequate health care for both you and your family?
1. If your current policy was canceled, wait and see
President Obama has requested that insurance companies delay cancellations for a year. Unfortunately, that may be easier said than done. One expert likened the situation to installing a new operating system on your computer, uninstalling the new system, and reinstalling the old system. In the meantime, explore other options just in case your current policy is not extended.
2. Realtors Core Health Insurance
The IRS has no authority to go after someone’s assets or wages in order to collect the penalty. It only has the authority to deduct the penalty from a person’s tax refund at year’s end.” –Merrill Matthews
The National Association of Realtors has come up with a new program called Realtors Core Health Insurance for Realtors ages 18-64. The challenge with this program is that it is “limited medical” insurance that restricts “its coverage to everyday illnesses and accidents. In addition, the maximum benefits paid in each medical situation are capped.” Policies start as low as $70.69 per month and may be a good option for those Realtors who have high deductibles, pre-existing conditions, or who cannot afford major medical insurance. (Pre-existing conditions require a 12-month waiting period before coverage becomes effective for that condition.)
3. Realtors Insurance Marketplace
This is a “one-stop” insurance shopping site that provides NAR members with a roster of health and wellness insurance plans from major carriers such as Blue Cross. It also includes a major medical health insurance exchange.
4. Sign up for ‘Obamacare’ and obtain a subsidy
A recent article by Inman News columnist Stephen Fishman described how a 56-year-old Florida Realtor named Dianne Barette, as well as many other Realtors, would qualify for a refundable tax credit under “Obamacare.” The key point to note here is that a “refundable tax credit” is different from a “tax credit.” While “tax credits” are normally limited to being no more than your taxable income, a “refundable tax credit” works like a subsidy — you can get more back than you paid in taxes and apply the overage to your health care premiums. To qualify for a subsidy, your adjusted gross income cannot exceed 400 percent of the federal poverty level for a family your size.
5. Roll the dice and maybe pay the fine
David Hogberg in a report for the National Center for Public Policy Research — a conservative think tank that’s dedicated to providing free market solutions to public policy problems — outlined the financial incentives people ages 18-34 have for not enrolling in “Obamacare.”
“This study finds that in 2014 many single people aged 18-34 who do not have children will have a substantial financial incentive to forgo insurance on the exchanges and instead pay the individual mandate penalty of $95 or 1 percent of income. About 3.7 million of those ages 18-34 will be at least $500 better off if they forgo insurance and pay the penalty. More than 3 million will be $1,000 better off if they go the same route. This raises the likelihood that an insufficient number of young and healthy people will participate in the exchanges, there by leading to a death spiral.”
6. Loopholes and avoidance strategies
Forbes contributor Merrill Matthews — who used to run an advocacy group for insurance carriers, the Council for Affordable Health Insurance — has outlined an entirely different strategy based upon some of the loopholes in “Obamacare”:
“The IRS has no authority to go after someone’s assets or wages in order to collect the penalty. It only has the authority to deduct the penalty from a person’s tax refund at year’s end. It won’t take long for people to figure out how to fix that problem by trying to ensure they have only enough withheld to meet their tax obligation. Those who are uninsured and successful at hitting the tax mark will face no effective penalty.”
7. A Fascinating workaround
Matthews — currently a resident scholar with the Institute for Policy Innovation, a think tank that advocates for “individual liberty and responsibility, free markets, and limited government” — pointed to what may be one of the best solutions to obtaining coverage and for protecting your family, especially if your household income exceeds 400 percent of the federal poverty level that qualifies for subsidies. Here’s how it works:
The customer buys a life insurance policy that pays up to $250,000 upon death with a “critical illness” rider. If the policyholder incurs a $50,000 cost for a major surgery, the amount of the insurance policy is reduced by the amount, i.e., from $250,000 to $200,000. According to Matthews, “One existing policy pays 100 percent for heart attack, stroke, life-threatening cancer, major organ transplant, kidney failure, Alzheimer’s and paralysis, among other medical conditions.”
In terms of the cost: “For one company, a 30-year-old male would pay $1,438 a year, and for a 50-year-old male it’s $3,234. And remember, this isn’t just health coverage. In the event of a tragic accident or illness, whatever is left of the benefit goes to the estate upon death.”
What will you decide? Investigate carefully, compare options, and then choose the best solution for both you and your family.