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Mike: Hi everyone. It’s Mike from newjerseyinsuranceplans.com. Today I’m going to go over how you can save a considerable amount of money on your health insurance using healthcare.gov. A lot of people also call it Obamacare. Now before I start, when I usually bring this up, a lot of people say, “Hey, Mike, I don’t want Obamacare. Nobody takes the insurance. It’s no good.” All kinds of different things like that. The truth of the matter is that plans on the exchange, the healthcare.gov plans, they are identical in every single way to a plan you were to buy direct with Horizon Blue Cross or AmeriHealth or whatever carrier it may be. The plans are exactly the same. What is different is how much you pay for those plans. If you qualify for a subsidy with the tax credit, you can purchase the same plan for a lot less money. Today I’m going to go over how that will work and on how you can start to figure out if you qualify or not.
One of the big things people look at, they say, “Hey, I make too much money. I made over the threshold last year, so I don’t get a credit, so I’m not even going to try.” I suggest you do try and at least see if you can do it. The case I have here, I’m on, probably my favorite site for the individual health and it’s called healthinsureprotect.com. So I just use the zip code in Absecon, 08201. I’m a single person and this person’s income is $56,000. The cut off for healthcare.gov for the exchange of credit is somewhere around $48,000, somewhere in that range, where they begin to become phased out for the credit. So in this case, I agree with him. You first look at it and you say, you know what? You probably don’t qualify. You make too much money. So, put the $56,000 in here and just to give you an idea of what the premiums looks like. So what the plan will focus on is this Horizon Blue Omnia Bronze HSA, $809 a month, wow. That’s a lot.
So let’s just see if we can find a way to actually get this gentleman to qualify for a subsidy or see if maybe he just qualifies already doing what he’s doing. So over here I have the poverty limits that they use to calculate the subsidies, so as long as you stay under the 400 percent level, you do qualify for a tax credit. In this case we have a single gentleman, so the most he can make is $48,000, $48,240. So as you remember, I put an income in of $56,000 and that was his gross income. So the credit is 400 percent, it’s based on your modified adjusted gross income. If you’ve ever looked at your IRS, your 1040, your tax return, down in the bottom right corner, you’ll see adjusted gross income. That’s the number they’re going to use.
If we look at there, this gentleman, $56,000 of gross income, you automatically get your personal exception which is $450,00 per head in the household as a single person, so we reduce his income from 56 down to around 52. Now, he was also contributing to a 401K at work. He was putting in $3,600 a year. So that further reduces his income, so now we’re getting even lower.
Then he says, “You know what, if I have some health expenses, I wouldn’t mind using the HSA account, I’ll save a little bit more on taxes, sure I’ll go ahead and do it. I think I can do maybe $2,000 a year.” So we start with 56, lowered it by four, and another 36 for the 401K and then another 2,000 for his Health Savings Account.
Now instead of $56,000, the income for the purpose of the exchange will be $46,350. Now he’s below this threshold. Let’s see if it was worth it, see if he can actually get the credit and how much it would be. I’ll go back to healthinsureprotect.com, gonna edit his information and, what did I say, 46. What will be his income? And recalculate. Wow. For this gentleman, if he does exactly what we had on there, his premium would be reduced by $502 per month. That’s very significant, that’s almost $6,000 a year, all just for applying on the exchange and buying the exact same plan he was considering buying direct to the carrier.
So now that same plan instead of being $809, it’s $308. So that’s it, that’s all we wanted to show today. I just wanted to show how you can reduce your income by using, you can use a 401K, traditional IRA or even a Health Savings Account if you purchase an HSA qualified plan to get your income down. This works for families, two adults, parent, child, doesn’t really matter how you’re set up. If you can squeeze yourself into one of these categories here and get under the threshold, it can make a huge difference in your tax return and reduce your premium. I definitely suggest it to anyone who thinks they may be close or have the possibility of coming close to getting under this threshold.
Again, it’s Mike from newjerseyinsuranceplans.com. If you have any questions you can always contact me at [email protected] And I hope you have a good day, thanks, bye bye.