Answers about the Health Care Reform Act

Answers about the Health Care Reform Act

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KNOXVILLE (WATE) - Certified Financial Planner John Fawaz says he is frequently asked about how individuals and businesses will be affected by the Health Care Reform Act.

Fawaz appeared Tuesday on Good Morning Tennessee to provide some answers.

The first thing to understand is that companies under 50 full time employees will not have to offer health insurance.

Companies with over 50 full time employees (30 hours or more) will have to cover employees and pay at least 60 percent of employee premium. Companies do not have to pay the family premium.

There will be a penalty $2000 annually for every employee not covered, but the first 30 are exempt from that penalty.

For individuals, the penalty will initially be one percent of income if they don't buy insurance. If you make $30,000, then your penalty would be $300 annually. The penalty will go up to 2.5 percent of income in next two years.

There will be a lot of government subsidy for coverage. For example, a family of four earning less than $94,000 will be subsidized.

There are four main plans: Bronze, Silver, Gold and Platinum. For those under age 30, they can opt for just catastrophic coverage.

Coverage costs depend on age, geographic location, family size and whether the insured is a tobacco user or not.

No gender difference or medical history (pre-existing) will apply to coverage.

Because Tennessee did not elect to set up their own insurance exchange, Tennesseans will have to use the federal exchange or potentially go through brokers. October 1 is when people can purchase insurance for 2014.

How is the Health Care Reform Act going to impact people and what should they do?

The focus is to get the 900,000 uninsured Tennesseans coverage in the next year or two.

If you have insurance right now, Fawaz suggests that you should be patient and don't rush to sign up. There will probably be confusion in the beginning.

A lot of people delay retiring early because they can't find coverage, especially those that have preexisting conditions. The law will help them a lot.

The drawback for some people is that big companies are moving toward employing just part-time employees to avoid providing healthcare.

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