If you weren't happy with the health insurance you've had this year, you'll soon have a chance to go shopping for a new plan.
Are you ready for Round Three?
In less than a month, the federal Health Insurance Marketplace will swing open its virtual doors and let the masses in. Hopefully, this year will be much like last year rather than a repeat of the program’s initial rocky start.
I love Obamacare, but the first year’s open enrollment process was a mess. Personally, it only took me four applications, three online profiles and two attempts to verify my income before it was all said and done. However, last year was a relative walk in the park. I’m still getting notifications to complete the three applications that never went through the first year, but other than that, all’s well on the health insurance front in my house.
Let’s all hope this year will be smooth sailing as well. In the meantime, you can get ready for the open enrollment period by brushing up on these five facts about Obamacare.
1. Open enrollment window for 2016 coverage
Before we get too much further into our discussion on Obamacare, take note that the upcoming open enrollment period applies only to those who are buying their own insurance. If you’re one of the 55.4 percent of Americans who get their insurance through their workplace (lucky dogs), you’ll still have your normal open enrollment period through your employer.
However, for the 14.6 percent of the population who buy their own medical insurance, open enrollment on the government Health Insurance Marketplace begins Nov. 1. You’ll have until Jan. 31 to select your 2016 plan. However, to ensure your new plan kicks in on Jan. 1, the earliest date possible, you need to make your selection between Nov. 1 and Dec. 15.
Outside this three-month window, the only way to buy health insurance on the marketplace is if you become eligible for a special enrollment period. These enrollment periods are open to those who have experienced certain events, such as:
- Loss of employer-sponsored health insurance coverage
- Marriage or divorce
- Birth or adoption of a child
- Relocation to outside the geographic area served by an individual’s current medical insurance
2. Penalty for failing to sign up
If you fail to sign up for health insurance coverage, you could be hit with a penalty at tax time. Back in 2014, when the health insurance mandate first went into effect, the fee wasn’t too bad. It started as the greater of 1 percent of your income or a per-person assessment that was capped at $285 per family. For penalties based upon income, only the amount above the tax filing threshold, $10,150 for an individual, is used in the calculation.
However, the fee has been steadily climbing. If you don’t sign up for health insurance in 2016, expect to be paying the greater of:
- 2.5 percent of your income above the tax filing threshold
- $695 per adult and $347.50 per child for a maximum of $2,085 per family
For those who lacked coverage for only part of the year, the fee will be prorated. For example, an individual who goes without health insurance for three months will be assessed only 25 percent of the fee.
Those who owe a fee this year will have it assessed as part of their income taxes. Exemptions are available in certain situations, such as if you were without health insurance less than three months or the cost of the cheapest plan in your area exceeds 8 percent of your income.
3. Where to go for coverage
Most states have opted to let the federal government run their health insurance exchanges. However, even if you live in a state with its own marketplace, you can head to the federal website to be directed to your own state exchange.
The federal website is HealthCare.gov, and if you used the website last year, you should be able to log in to your account to shop for new coverage starting Nov. 1. You can also call 800-318-2596 (might want to brew some coffee and be prepared to be on hold) and have a representative complete your application over the phone.
Finally, there may be local organizations that can help with the application and enrollment process. You can go to this page at HealthCare.gov to search for options in your area.
4. What to look for in a policy
Assuming you’re applying for health insurance on the marketplace for the first time, once you’ve completed your application, you should be presented with a number of health insurance plans from which to choose. These will be broken down into four tiers depending on the level of coverage they provide. Check out our overview of the tiers for more details.
Don’t forget that you may be eligible for tax credits to subsidize premiums if you earn less than 400 percent of the federal poverty limit. In addition, those selecting a silver plan may be eligible for cost-sharing reductions that may lower co-payment amounts.
Of course, premiums are only part of the picture. You also need to consider these factors when picking a plan:
- Deductible: The amount you must pay out of pocket before insurance coverage will kick in for nonpreventive care.
- Co-payments: A flat amount you pay for certain services or items, such as office visits or prescription drugs.
- Coinsurance: Similar to co-pays, coinsurance is the percentage of a health care bill that is your responsibility.
- Network: Very few health insurance companies let you see any doctor you want nowadays. Most have a network of providers and facilities that participate with their health plans. Be sure your favorite doctors, hospitals and clinics are a part of a plan’s network. Otherwise, you could be on the hook for your entire medical bill.
5. Advice for those who like the plan they chose last year
If you already have a plan you like from the 2015 open enrollment period, there’s no need to log in or complete a new application. The Health Insurance Marketplace will automatically re-enroll you in your existing plan if you do nothing. In the event your insurer discontinues your plan, you’ll be shifted to a similar plan.
But before you decide to put your health insurance on autopilot, it might be wise to at least check out your options. According to the Kaiser Family Foundation, health insurance tax credits are calculated using the second-lowest silver-tiered plan as a benchmark. Individuals with more expensive plans must pay the full cost of the difference between their plan and that of the benchmark plan; that amount is not subsidized.
As a result, your premiums might go up significantly if your plan is no longer one of the cheapest options on the marketplace. To be safe, it might serve you to spend a little time to see if and how your premium will be changing in 2016 and whether a better option is available.
For more information on all things Obamacare, MTN has you covered. Do a search for Obamacare for information about the law, health insurance plans and more. Or if you want to start with just the basics, read our articles on Obamacare facts, how to prepare for Obamacare and common Obamacare scams.
What’s your experience, so far, with the Affordable Care Act (Obamacare)? Share with us in comments below on our Facebook page.