Ch 11: Apply What You've Learned - Planning for Health Care Expenses

Therefore, the amount of the tax credit is expected to be ___ , and means that you should expect to pay ___ per month on an after-tax basis (rounded to the nearest whole dollar) for your health insurance coverage.

$450 $38

Think about the Affordable Care Act (ACA) and answer the following questions: If you choose to not enroll in a health insurance plan during 2017, your tax penalty under the Affordable Care Act (ACA) will be the greater of either$___ , or___ % of your gross income.

695 2.5

You should expect to pay ___ of your pre-tax income for your health insurance if it is obtained through a federal or state healthcare exchange. The ACA allows for several types of tax credit subsidies, including income-based tax credits. One such credit can be based on a benchmark premium, which in your current situation, is worth ___ and equal to the cost of the ____ plan in your geographic area.

7.50% $3,000 second-lowest-cost silver

One possible solution to the lack of health insurance if you elect to leave your current job is to rely on COBRA coverage. Which of the following statements regarding COBRA and its provisions is true? Check all that apply.

COBRA rules apply if your employer has more than 20 workers. AND To receive healthcare benefits under your former employer's plan, you must pay the entire premium (your and your former employer's portion) plus an administrative fee. AND Under COBRA, you can remain a member of your group health plan for up to 18 months after you leave the job provided that other restrictions are met.

For an insurance plan to meet the federal government's standard of a qualified healthcare plan, it must provide ten essential benefits. Among these essential benefits are: Check all that apply.

Maternity and newborn care AND Emergency services AND Prescription drugs AND Preventative and wellness services and chronic disease management AND Laboratory services

Scenario:

You are single and 35 years old. You are thinking of leaving your employer in January 2017 and becoming self-employed. However, replacing the insurance you currently receive through your employer is a big concern. You have saved a nice nest egg, but you know that the medical costs from one serious accident or the development of a serious medical condition could wipe out your savings. You estimate your net income will be $34,000 in your first year of self-employment. You are looking to enroll in health care through the health insurance marketplace. The estimated benchmark premium in your state for a 35-year-old is $3,000 per year. You are responsible for paying 7.50% of your income for health insurance. You are also considering purchasing disability insurance and long-term care insurance in case something happens in which you are no longer able to work or care for yourself.

The ACA provides for several different tiers of plans to be available through the various federal and state healthcare exchanges. At your age, you can select any one of the plans except for the ___ plan, which cover ___ of the insured's out-of-pocket medical costs.

catastrophic 60%

You make changes in your health insurance coverage either ___ or if you or your family experiences a defined important family event.

during the open enrollment period

As the plans' tiers progress from bronze to silver to gold to platinum, (1) the percentage of out-of-pocket costs covered by each tier increases , and (2) the cost of the plans included in each of the tiers will ___ .

increase increase

The tax penalty applies to each ___ that you do not have coverage for health insurance coverage for yourself or a member of your household. You are, however, allowed a maximum gap of ___ months before becoming subject to the penalty tax.

month three

If you are subject to the tax penalty, it will be paid:

on your income tax return

Under the ACA and the new rules of the health insurance marketplace, the factors that may be used to determine your health insurance premium can include all of the following except: Check all that apply.

the current state of your health AND any preexisting health conditions