TO THE EDITOR: Many people are thinking that the insurance exchange is an easier way to go.
The following are a few points to consider when you hear the political sales pitches that give the impression this is for everyone:
Are you eligible to purchase insurance through an exchange? Not everyone will be eligible. For example: if your employer offers you health insurance that is deemed to meet the minimum essential benefits as defined within PPACA, then your individual cost of the plan premium charged to you through payroll deduction must be more than 9.5 percent of your household income. Most employer plans do not charge more than this amount. Plus, you should remember that premiums you pay within your employer plan will be payroll deducted pre-tax with your employer Cafeteria Plan.
The Premium Tax Credit for purchasing insurance through the Exchange does not always mean you will be eligible for the Tax Credit. This Credit is supposed to reward you for having insurance, but there are many variables written in to the formula that most people will not be eligible for the Credit.
The maximum you can receive as a tax credit is 9.5 percent of the premium charged within the exchange and only available to those who are 100 percent to 400 percent of the FPL (Federal Poverty Level) can be considered for the Premium Tax Credit. You can look up the FPL on the HHS.gov website.
If you can get 9.5 percent, it is an amount of the total premium you would be charged, which could be much more than an employer plan. However, if you are on an employer health plan which includes the Cafeteria Plan, you would get your tax break of 15 percent to 28 percent, which is much higher than the Premium Tax Credit.