Helping Your Employees and Patients Understand the Health Insurance Marketplace

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Helping Your Employees and Patients Understand the Health Insurance Marketplace

In the upcoming weeks and months, your patients will be inundated with messaging encouraging them to utilize the Health Insurance Marketplace (formerly referred to as the “Exchange”).  The individual mandate provisions of the Patient Protection and Affordable Care Act will also have heightened visibility.  As a trusted resource for information, many of your patients may come to you with questions.  This article is intended to help you answer basic questions and direct you to some useful resources. 

Where can someone purchase individual coverage?
Starting Oct. 1, 2013 Michigan residents will have the options of shopping for health insurance coverage on the federally-run Health Insurance Marketplace operating in Michigan.  To buy through the Marketplace, one must live in the United States, be a U.S. Citizen or national (or lawfully present), and not be currently incarcerated.

What is a Health Insurance Marketplace?
A Health Insurance Marketplace is an online marketplace where people can shop for, compare, and purchase health insurance.  There will be a single application, which will also be used to let people know if they are eligible for financial assistance to help with costs or if they or their family members qualify for coverage through Medicaid or MIChild (Michigan’s Children’s Health Insurance Program). 

How do individuals apply?
Individuals can apply online (, by phone (800-318-2596; 855-889-4325/TTY), by mail, or in-person with the help of a trained assister or navigator.

When will the Marketplace be open for enrollment?
Open enrollment starts October 1, 2013, and ends on March 31, 2014.  Plans and prices will be available then.  Coverage starts as soon as January 1, 2014.

What type of coverage will be available?
The specific terms of coverage will vary based on the particular plan that is purchased. However, all coverage purchased through a Health Insurance Marketplace is required at a minimum to include a set of “essential health benefits” with at least the following items and services: 

  • Ambulatory patient services
  • Emergency services
  • Hospitalization
  • Maternity and newborn care
  • Mental health and substance abuse disorder services, including behavioral health treatment
  • Prescription drugs
  • Rehabilitative and habilitative services and devices
  • Laboratory services
  • Preventive and wellness services and chronic disease management
  • Pediatric services, including oral and vision care

What is the Individual Mandate?
Effective January 1, 2014, most U.S. citizens and legal residents will be required to have health insurance that qualifies as minimum essential coverage or pay a penalty.  Minimum essential coverage means coverage under:

  • Government sponsored plans
  • Employer-sponsored plans
  • Plans in the individual market
  • Grandfathered health plans; and
  • Some other specified health plans

What if someone chooses not to purchase insurance?
Individuals who do not purchase insurance, and provide verification of coverage, may be subject to a penalty.  This penalty will be the greater of:

  • 2014:     $95 or 1% of household income
  • 2015:     $325 or 2% of household income
  • 2016:     $695 or 2.5% of household income

The penalty per child under 18 years old is one-half of the above amounts.  However, the maximum a family will have to pay is three times the above amounts.  Beginning in 2017, the penalty will be increased annually by the cost-of-living adjustment up to a specified cap.  Some exceptions do apply such as those who have religious objections, those not lawfully present in the U.S., those with financial hardships, and incarcerated individuals. 

Is help available to offset the cost of health insurance?
Individuals who purchase health insurance through the Marketplace and who are not eligible for Medicaid, Medicare, or other minimum essential coverage may be eligible for tax credits and/or cost-sharing subsidies if their household incomes are between 100% and 400% of the federal poverty level. 

The Marketplace will conduct a test to verify that the individual’s employer does not offer coverage that covers at least 60% of the costs or the individual’s premium contribution is greater than 9.5% of household income. 

How does one know if they qualify for a tax credit and/or subsidy?
The table below describes the various levels.

Household Income (% of FPL)

Premium Cap (% of household income)

Cost Sharing Subsidy

Up to 133%*


















*With the expansion of Medicaid in Michigan, these individuals will qualify for Medicaid.

For example, if an individual falls between 150-200% FPL, the amount he/she will pay on the premium for a silver plan would be 4-6.3% of his/her household income and he/she will pay 13% on cost-sharing out-of-pocket expenses.

Additionally, various organizations are developing tools to help individuals determine eligibility for tax credits and subsidies, as well as estimate their out-of-pocket costs.  The Kaiser Family Foundation has a calculator that your patients may want to utilize.  It is available at  This calculator is not approved or sponsored by the Federal government or MSMS and is intended for illustrative purposes only.

Where can individuals go for more information?
Visit  Or, call the Health Insurance Marketplace Call Center at 800-318-2596 (TTY users should call 855-889-4325).

Are there resources physicians can make available in their office?
The U.S. Department of Health and Human Services has created a number of tools for physicians to use including posters, brochures, and widgets that can be downloaded or ordered at  MSMS also has a variety of links at