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TONY WILSON: Individuals, families could be penalized under health care reform

I’ve often joked that one day I’m going to write a book about youth sports titled “Put Me In, Coach, or My Mom Will Sue” because often the worst thing about youth sports is the adults.

When it comes to health care, many feel that same way about the federal government getting involved, especially with the “play or pay” rule which is a key component of the Patient Protection and Affordable Care Act (PPACA).

Basically, play or pay means people must obtain health insurance in 2014 that offers “minimum essential coverage” or pay a penalty. Over the past few weeks, we’ve seen how many employers will face the largest penalties. This week, we will start our look at the coverage mandate and how it will impact individuals and families.

Minimum essential coverage is coverage, for example, through an employer-sponsored health plan, certain government-sponsored health plans and individual health plans. There are other plans that qualify, but these are the most common.

Under PPACA, if a citizen or legal resident does not obtain minimum essential coverage, then the person will be taxed the greater of $695 per year up to a maximum of $2,085 per family or 2.5 percent of household income by 2016. Penalties will be phased in as follows until then: 2014 — $95 or 1 percent of household income; 2015 — $325 or 2 percent of household income; and 2016 — $695 or 2.5 percent of household income.

After 2016, the penalties will be adjusted by the cost of living.

There are some exceptions to who must obtain a minimum essential coverage plan (anyone incarcerated, for example) and to the penalties, which are capped for families at certain levels and cut in half for anyone under 18. That noted, the penalties as outlined above will be applicable to most individuals and families.

Since the PPACA legislation was signed into law more than three years ago, it has been the focus of numerous articles and news reports, but I was startled to learn recently that, according to a recent Gallup poll, 43 percent of the uninsured in this country are unaware they must obtain coverage.

Mandated coverage is a key component of the legislation and we’ve been talking about it for more than three years, yet there are people who don’t know about it. Wow.

To address this situation, the federal government and the states will spend millions — and when all totaled could reach into the billions — promoting Obamacare. The administration even reached out to the NFL to seek its promotion assistance. The NFL threw a flag on that play.

Those of us who are connected to or who use medical insurance know what a nightmare it can be at times. We also know of the many times it works as it should.

Few would dispute that some type of change is needed. But, think of the good the millions (and potentially billions) of advertising dollars could do if put into truly improving the system instead of being spent on PR campaigns.

Think about this in terms of the last election. According to a news release issued by the Federal Election Commission earlier this year, more than $7 billion (yes, with a B) was spent in the last presidential and congressional election cycle. All those politicians promised to fix our problems.

But today our schools go underfunded. Our military men and women are not getting benefits they deserve. Our police officers and firefighters are working extra jobs to make ends meet. Our country continues to sink deeper and deeper into the fiscal abyss. What could we have done with that $7 billion?

I’m afraid with the PR campaign for health care reform we may be getting the same return on our investment as we have gotten from our investment in the “leadership” on both sides of the aisle in Washington — not much.

Next week, we will continue our discussion of the penalties as outlined in PPACA for individuals and families as well as look at the subsidies available.

Questions or comments? Feel free to email me at twilson@nfp.com.

Tony L. Wilson is a principal with NUVISION Financial Corporation based in Conyers. NUVISION is a subsidiary of National Financial Partners Corp. (NFP), which provides benefits solutions for companies.