Health Care Reform: A Guide to Your Coverage Options

Starting Oct. 1, brokers and agents will face decisions and obligations concerning insurance. Are you ready?

September 20, 2013

Key aspects of the major health insurance reform law enacted three years ago take effect as early as next month and it’s important for you to know what parts of the law affect you as a real estate professional.

To start, one of the goals of the law, called the Affordable Care Act, is to ensure that as many people as possible have insurance coverage, whether it’s through an em­ployer plan, a government-sponsored health program such as Medicare or Medicaid, or a plan purchased by you directly from an insurance company or using the new state exchanges that are being set up under the law.

To that end, the law established what’s known as the individual mandate, the requirement, starting in 2014, that every person be covered by a qualifying health care plan or pay a penalty.

As a result, if you’re one of the approximately 48 million Americans without health insurance, the time to look at your options and make a decision for 2014 is right around the corner. The law gives you a number of ways to get coverage and also makes resources available to you through your state and the federal government.

Open enrollment  

If you’re an independent contractor, as most real estate practitioners are, the most important thing for you to know right now is that a six-month period, called the state exchange open enrollment period, begins  Oct. 1 to make buying that coverage as easy as possible. The open enrollment period is when the new state insurance exchanges are open for business, enabling you to use these online marketplaces to shop for and buy your coverage and, if you’re eligible, receive a premium credit to help you reduce the cost.  

If you already have coverage, then the open enrollment period is not critical for you.  But you’ll want to consider checking out your new state insurance exchange to see if you can find a better deal. Also, it’s possible you’ll see a few changes to your existing coverage starting in 2014 because your insurance provider must make sure your policy complies with the minimum requirements that the law put in place for health insurance plans. These requirements are all good things in the sense that they help make sure you have access to quality coverage and can’t be turned down because of your age or health status.

Credit Eligibility 

For many of you, because you’re an independent contractor (and assuming you don’t have coverage through a spouse’s employer, veteran’s benefits, or some other source of group coverage), any existing coverage you have now is likely to be through what’s known as the individual market, because you’re not getting your insurance through an employer. This has typically been one of the most expensive ways to get insurance. It’s possible you’ll be eligible for premium credits starting next year, depending on your income, and if you replace your current coverage with a 2014 policy you buy through your new state exchange. That’s something to keep in mind as you renew your coverage. The subsidies are generally provided in in the form of credit. If you’re eligible for that credit to help offset the cost of insurance, then you will want to take that into account in your decision regarding how you’ll obtain your coverage.

In general, you’re eligible for a premium credit if you earn between 100 percent and 400 percent of the poverty rate, which in late 2013 was about $24,000 for a family of four. That means a household of four can earn up to about $96,000 and be eligible for some level of credit.

You can find out more at, the government’s main portal on the health reform program, and on the state online exchanges that are being created under the law. Also, by Oct. 1, employers are required to send out notices, regardless of whether they offer insurance or not, letting their employees know about coverage options available on the online healthcare exchanges and through their jobs.

If you don’t have insurance, then next month’s start of open enrollment is important to you, because that’s the beginning of the period in which you have to get insurance for 2014 or face a penalty. That said, you don’t have to jump into the market immediately and find coverage; you’re not required to have insurance until 2014, and there are several ways you can do this.

Insurance Broker

First, you can do it the traditional way by going through an insurance broker or directly to an insurance company and seeing what you can get. The important thing to remember is the law has put in place restrictions on insurance providers so that they cannot deny you coverage because of your age, health history, preexisting condition, type of job, or clams history. They also have limits on how much they can charge you if you’re, say, older and have health issues, compared to what they charge a younger person with no health issues. They can still charge you more, but they’re subject to limits now, so the gap can’t be as wide as it sometimes was in the past. Note, though, that unless the broker is selling you coverage that is available on the new state exchange, you cannot claim your premium credit, even if you’re eligible; you can only get the premium credit if your insurance is offered through the online state exchange.

Insurance Exchange

Second, you can go online and shop for coverage on the new individual insurance exchange for your state—each state will have one. In some states, the exchange is operated by the state, and in others, it’s operated by the federal government. You can get to your state exchange through the federal government’s health reform portal, The exchange is intended to make the shopping experience much simpler than before by standardizing all the products into groups (Bronze, Silver, Gold, and Platinum) so no matter the coverage level you’re looking for, you’re able to make apple-to-apple comparisons. What’s more, information on premium credits is built into the exchange, so based on your income and household size, you should get an automated response on what credit amount, if any, you’re eligible for. You should also be able to choose how you want the credit provided. For example, you can have it sent directly to the insurance provider each month, while you’re billed the reduced premium amount, or you can pay the full year of premium yourself and have the credit recognized at year-end when you file your taxes.

As part of your online shopping, you can work with what are known as “navigators” who are available on the exchange via a live chat function or by phone to help guide you through the process. These “navigators” are support people who you contact in real time and with whom you get questions answered through text messaging. Their job is just to help you; you don’t pay them and they have no financial interest in which coverage you select, and they can’t actually enroll you in your plan. You can also work with navigators who work outside the exchanges and other helpers, called “enrollment assisters,” who are often affiliated with nonprofit groups and have also been trained to be familiar with the health reform law and the exchanges.

You want to be sure that the navigator or enrollment assister you’re working with is not out to make money from you by charging for their services. Although traditional insurance brokers charge for their services, and that has always been and continues to be standard practice, designated navigators and enrollment assisters whose job is just to help with the new exchanges are not to charge for their services or otherwise have a financial interest in insurance products.  

Insurance Marketplace

There is a third option you can consider as well, and that’s buying coverage through a private health insurance marketplace developed by NAR and operated by SASid, the administrator of NAR’s core health and dental insurance programs. The marketplace features products that all meet the law’s requirements. You can find more about the option in this article, but you’ll want to note that premium credits will be available under this option only if the plan you purchase is one that is available on your state exchange.


Separate from these options, you might qualify for an expanded version of Medicaid that was also created as part of the big reform law, although not all states have passed laws to accommodate this expanded program.

Medicaid is publicly assisted health insurance at the state level that’s traditionally been for the elderly, persons with disabilities, and, depending on income, children and pregnant women. Under the expanded version of the health reform law, the universe of eligible recipients is broadened to include adults who meet income restrictions, which is defined as earning 138 percent of the poverty level, or about $33,000 for a household of four. So, even if you don’t meet the traditional criteria for Medicaid eligibility, you might get the benefits of the Medicaid coverage by virtue of your income.

As of late 2013, about half of the states had passed the expanded eligibility. If you’re in a state that hasn’t, then the traditional Medicaid eligibility rules apply and, unless you’re elderly or disabled or otherwise a covered person, you can’t get Medicaid coverage. You can find out about your state by going to and searching for expanded Medicaid states. More states are considering the expanded program, so by next year the number of states might be larger.

Employer Mandate



Finally, starting in 2015, some employers will be subject to what’s known as the employer mandate, which means that employers with 50 or more full-time equivalent employees are required to provide insurance to their employees if they don’t already or face a penalty. This is probably less relevant to real estate practitioners than to many others because practitioners that have complied with the tax law’s requirements for “qualified real estate agent” status are not considered employees under the health care law, but are independent contractors.  This means they are not included in the broker’s employee count, making it far less likely the broker will meet the 50-or-more-employee threshold.

Of course, brokerages are free to provide insurance whether they meet the threshold or not, and in fact very small employers (fewer than 25 full-time equivalent employees) can get tax credits to help offset the cost of coverage purchased through the state small business exchanges if they choose to provide it. The credits are available for two years and they have to meet a few other requirements, but that incentive is there for those who want to offer coverage. 


You need to be aware that if you decide not to get coverage, whether through the state exchange, directly from an insurance company or broker, or in any other way, you can be assessed a penalty. Starting in 2014, the penalty is $95 per individual in your household who isn’t insured or 1 percent of your household income, whichever is greater, although the maximum penalty you pay is capped at the level you would pay for a standard insurance policy for you and your family. The penalty amount will rise in subsequent years, to $695 or 2.5 percent of income. But the limit based on a standard policy cost will also remain in effect. 


There are also exceptions to the individual mandate and its penalty rules. The law includes nine exemptions for people who don’t have insurance. These include citizenship status, whether you’re incarcerated, and religious-based objections, among others. One exception of particular note is based on cost burden. If you simply can’t find affordable coverage, defined as paying no more than 8 percent of your income, even after calculating the credit that the government will be making available, then you won’t be charged a penalty. 

There are a lot of moving parts to the new health insurance law, but for you, there are only a few matters you need to be aware of now:  the start of the individual mandate in 2014 (that’s the mandate that you have coverage), the exceptions the government recognizes for people who are exempt from the mandate, the open-enrollment period for the state exchanges starting in October  to shop for coverage, the premium subsidies you can qualify for based on your income if you buy coverage in the state exchange, and any changes to your coverage that your insurer must let you know about if you already have coverage and it changes to comply with the law.