ROCHESTER — Individuals and families who previously may not have been required to file income tax forms may need to do so this year in order to obtain health-insurance coverage through the exchanges being rolled out by states this fall as part of the Affordable Care Act, which some people call "Obamacare."
A 2012 tax filing will establish a person’s income "at the point of entry into the exchange option," explained Judith McKay, Health Access and Navigation System’s director for St. Joseph’s Neighborhood Center, a health-care ministry sponsored by the Sisters of St. Joseph of Rochester.
In October, individuals and families will be able to learn about their eligibility and associated costs for coverage through the New York Health Benefit Exchange, which will offer an array of health-care plans, she added. The plans will have several levels and categories based not only on income but age as well, McKay said.
Most people will be able to go online for instructions to guide them on their next steps to apply for health coverage, according to Trilby de Jung, a health law attorney with Empire Justice Center.
The Affordable Care Act called for the creation at the state level of exchanges, which are organized and competitive health-insurance marketplaces offering a choice of health plans, establishing common rules regarding the offering and pricing of insurance, and providing information to help consumers better understand the options available to them, according to information available at www.kff.org/healthreform/7908.cfm.
As of now, however, there remain "a lot of decisions state officials are making. They have not finalized yet on how exchanges will operate," de Jung added.
Even though the health-care exchanges are currently in flux, St. Joseph’s Neighborhood Center recognized the need to enhance community awareness about the new insurance options and the importance of filing tax forms this year, McKay said. So St. Joseph’s is helping Empire Justice Center spread the word about Empire’s program called Creating Assets, Savings & Hope (C.A.S.H.), which helps people file tax forms at agencies and sites throughout the Rochester area.
Generally, anyone who worked in 2012 should file a tax form, de Jung said. This not only will provide documentation of the person’s income for the health exchanges but also may qualify them for the federal Earned Income Tax Credit, she said. If a person did not work but received Social Security income, it is not as imperative them to file a tax return, she said.
Also, people qualifying for such federal or state-funded plans as Medicaid or Family Health Plus will not have to file tax forms, according to the Kaiser Family Foundation. These programs are only open to those with incomes below 138 percent of the national poverty level ($9,350 for an individual or $18,700 for a family of four), which means participants do not qualify for any tax credits for medical expenses and are exempt from penalties under the Affordable Care Act for failing to apply for health insurance, McKay said.
Because many lower-income households may be unfamiliar with the connection between tax filing and health insurance under the Affordable Care Act, it is especially important to get this information out so that area residents are not faced with penalties for being uninsured, de Jung and McKay concurred. Penalties will range from $95 per adult to $285 for a family of four in 2014 and will increase in future years.
McKay noted that creation of the state health-care exchanges also signals a cultural shift in how people obtain health insurance, with more people shopping for their own coverage.
"Historically, the other reality in our health care in this country is that (health care) is employer-based and we’re not used to spending a lot of money if we’re with an employer that subsidizes our plan," she said.
Under the new law, a worker will be eligible to purchase health insurance through an exchange if his or her contribution to employer-based coverage would exceed 9.5 percent of the person’s income, she said.
"With the exchanges, there is a limit to what people are required to spend on health care," McKay said. "In the exchanges, you might be eligible for both a reduction in premium costs and reduction in out-of-pocket expenses. … That will depend on income."
The kind of assistance St. Joseph’s Neighborhood Center currently provides in directing people to health insurance or health providers also will be vital once the exchanges are ready to enroll individuals or families, she said.
"That’s the kind of work we do now," McKay said. "It would be wonderful if there’s role for us. To some extent, we have the prototype."
The center’s personnel are familiar with Medicaid and Medicare requirements and know which providers accept patients who don’t meet those programs’ requirements, McKay said. They can also enroll patients in federal programs or help them apply to be seen at health centers, minimizing legwork for the patients, she added.
This process "is going to be a learning curve for the country — providers, users, insured and uninsured alike," McKay said. "We have to talk about it as we go."
EDITOR’S NOTE: For more information on C.A.S.H. locations or about how to determine if one has to file a tax form for 2012, visit www.empirejustice.org.
