What happens if my income changes after I receive my insurance policy?
Question: I will be 63 in January 2014 and will use the exchange to buy health insurance when I retire in February (I am currently not medically underwritable, which is the reason I still work). Since my 2014 income will be lower than my income in 2013, will I be able to explain that on my application for coverage beginning next year so I can take advantage of the subsidy?
Answer: The subsidy for policies purchased on an exchange is based on your income during the year the policy is force. That means the subsidy for a policy that is effective in 2014 will be based on the amount you earn in 2014. The exchange will ask for your 2013 income as an estimate of your expected earnings in 2014. However, you can provide a more accurate estimate, if you do lose your job. If it varies by more than 10 percent from your 2013 income, you may be asked for documentation or, if you have none, for an attestation of the change. Regardless of the amount you estimate, it will be reconciled with your actual 2014 income after the year ends, so you may qualify for a subsidy retroactively.
Bear in mind that retirement is considered a qualifying event that permits you to purchase coverage outside of the open enrollment period, which ends on March 31. You can obtain it whenever your retirement occurs.
Robert I. Field, Ph.D., J.D., M.P.H. is a professor of law at the Earle Mack School of Law and professor of health management and policy at the School of Public Health at Drexel University. He also writes for The Field Clinic blog. Ask Rob your questions about the new healthcare law.