2017 Open Enrollment for the health insurance marketplace established by the Affordable Care Act (ACA; a/k/a ACA) is a few months away. But it is good to learn more about it way in advance and plan your insurance year. If this is your first year for enrolling in health insurance through the marketplace, or even if it isn’t, here are the ten essential facts that can help you compare health insurance, select the right plan and save…
The Health Insurance Marketplace
The ACA established the Health Insurance Marketplace as the channel through which individuals purchase health insurance unless they already have qualifying coverage. The marketplace includes the federal exchange and state-specific exchanges. You can get learn about health insurance comparison and even get health insurance quotes from most of the online marketplaces. You can buy private insurance outside the marketplace, but you won’t be eligible for cost assistance if you go that route.
Who Needs to Enroll
The ACA requires most Americans to buy health insurance (what the ACA calls “minimum essential coverage”) or pay a fee for each month without coverage. This provision is called Individual Shared Responsibility, or individual mandate. There are fee exemptions for those with very low incomes and other specific hardship situations.
Which Plans Qualify
If you and your dependents get health insurance through your employer (including COBRA or retiree plans), Medicare, Medicaid, the VA, the Children’s Health Insurance Program (CHIP), TRICARE, your university (if you’re a student), or the Peace Corps (if you’re a volunteer), you’re already covered. You just need to report your coverage on your federal income tax return. If not, you need to enroll in a plan through the marketplace or buy health insurance coverage directly from a private insurer.
Covering The Basics
Whether you get insurance through the marketplace, your employer, or directly from the insurer, all qualified plans have to include certain features. You can’t be denied coverage based on pre-existing conditions, or pay more because of health status or gender. Young adults can stay on their parents’ plan until the age of 26. All plans must cover immunizations and a range of preventive services at no out-of-pocket cost to you. Finally, you can’t “max out” on annual or lifetime dollar limits for essential health benefits.
Essential Health Benefits
Every qualified health insurance plan must cover the following services: emergency services; outpatient care; pregnancy, maternity, and newborn care; hospitalization; mental health and substance abuse disorder services; prescription drugs; rehabilitation services and devices; lab services; preventive and wellness services; and pediatric services. While shopping for insurance online, you can compare health insurance plans and benefits; understand which one suits your family’s needs.
Individual Mandate Penalties
Starting in 2016 the penalty for not having minimum essential coverage is 2.5% of your modified adjusted gross income, or $695, whichever is greater. The penalty for children is half that amount. You report and pay any penalty on your federal income tax return. People with very low incomes and in certain other circumstances may be eligible for a waiver.
In general, you can only purchase qualifying private insurance, whether inside or outside the marketplace, during open enrollment. During this period, you can compare plans and get health insurance quotes based on the details you have filled in. If you move, marry, have a child, lose your job, or experience a similar major life change, you may qualify to enroll in the marketplace outside the open enrollment period.
If you enroll in a qualified plan through the marketplace and your annual household income is in a certain range for your particular family size, you could qualify for assistance with your premium and/or out-of-pocket costs. (Learn more about premium tax credits here.)
Choosing The Right Plan
Even though all qualified plans have the same basic features and benefits, there are differences in terms of provider networks, deductibles, and optional covered services. Health insurance comparison is now easy and quick. Once you fill in the basic details, the qualified plans will be shown; you can compare the options and get health insurance quotes based on what you choose. Know what services you and your family need (or anticipate needing in the year ahead) and check the details of the plans under consideration. Remember that in most cases you’ll have to stick with the plan you choose until the next open enrollment period, so choosing the right health insurance coverage is important.
Small Businesses And ACA
Employers with 49 or fewer full-time equivalent employees aren’t subject to the employer mandate. That doesn’t mean that smaller businesses don’t choose to offer coverage — in fact, the Affordable care act offers incentives to do so. If you have fewer than 25 full-time equivalent employees and meet certain other conditions, you may be eligible for a tax credit.