What is the Health Insurance Marketplace?
Health Insurance Marketplaces (also known as Exchanges) are new organizations that are set up to create more organized markets for buying health insurance. They are designed to simplify the shopping experience for the consumers who are looking to buy health insurance on their own. Government cost sharing subsidies will be available through the Marketplace to reduce the cost of coverage for individuals and families, that qualify based on their income. Small businesses can also buy coverage for their employees through the Small Business Health Options Program (SHOP) Marketplace.
There will be a health insurance Marketplace in every state for individuals and families and for small businesses. In some states marketplaces will be operated by the state and in other states they will be run by the federal government.
How do I find my state Marketplace?
Links to all state Marketplaces can be found at www.simplifyhealthinsurance.com
Who can buy coverage in the Marketplace?
To be eligible you must be a citizen of the U.S. or be lawfully present in the U.S., live in the state where your Marketplace is located, and you must not currently be in jail.
Not everybody who is eligible to purchase coverage in the marketplace will be eligible for subsidies. To qualify for subsidies people will have to meet income and other requirements set in place by the Affordable Care Act.
I live in one state, but drive across the border every day to work in a different state. What Marketplace should I use to buy coverage?
You should buy coverage in Marketplace in the state where you live.
Can I still get a better deal in the Marketplace if I’m eligible for health benefits at work?
You can always shop for coverage on the Marketplace, but if you have access to job-based coverage, you might not qualify for premium tax credits.
I signed up for a Bronze plan with a high deductible during Open Enrollment. Can I change plans if I need surgery and would rather be in a different plan with better coverage?
No, once you sign up for a plan, you are locked into that coverage for 12 months, or until the next Open Enrollment period.
I’m leaving my job and will be eligible for COBRA. Can I shop for coverage and subsidies on the Marketplace instead?
Yes, leaving your job and losing eligibility for job-based health coverage will trigger a special enrollment opportunity that lasts for 60 days. However, if you choose to enroll in COBRA coverage through your former employer, you will need to wait to the next Marketplace open enrollment period if you want to switch to a Marketplace plan.
What is the difference between “Bronze,” “Silver,” “Gold,” and “Platinum” plans?
Plans in the Marketplace are separated into categories — Bronze, Silver, Gold, or Platinum — based on the amount of health plan deductibles, co-pays and co-insurance. In the Marketplace, Bronze plans will have the highest deductibles and other cost sharing. Silver plans will require somewhat lower cost sharing. Gold plans will have even lower cost sharing. And Platinum plans will have the lowest deductibles, co-pays and other cost sharing. Plans with lower cost sharing will have higher premiums, and vice versa.
What are “Catastrophic Plans” and can I buy one if I want?
Catastrophic plans have the cheapest premiums but also have the highest cost sharing. In 2014, catastrophic plans will have an annual deductible of $6,350 ($13,700 in family plans). Not everybody will be allowed to buy catastrophic plans. They are only for adults up to age 30, and for older people who can’t find any other Marketplace policy that costs less than 8 percent of their income.
What if I need care from a doctor who isn’t in my plan’s network?
Any time you shop for health insurance it is important that you compare provider networks and not just look the plan cost alone. Under ACA plans are not required to cover any care received from a non-network provider, though many plans today do. If you do receive care out of network, it could be costly to you. Even if your plan has out-of-network option it would cover such care at a lower rate (cover smaller % of cost and/or require higher deductibles and co-pays). Additionally non-network providers also are not contracted to limit their charges to an amount the insurer says is reasonable, so you might also owe “balance billing” expenses.
What’s the penalty if I don’t have coverage?
The penalty for not having minimum essential coverage is either a flat amount, or a percentage of household income, whichever is greater. The penalty will be phased in.
In 2014, the penalty is the greater of
$95 for each adult and $47.50 for each child, up to $285 per family, or
1% of family income minus the federal tax filing threshold, which is $10,000 for a person who files singly, $20,000 for somebody who files jointly
In 2015, the penalty is the greater of
$325 for each adult and $162.50 for each child, up to $975 per family, or
2% of family income above the federal tax filing threshold
In 2016, the penalty is the greater of
$695 for each adult and $347.50 for each child, up to $2,085 per family, or
2.5% of family income above the federal tax filing threshold
In later years, the flat penalty amounts for 2016 will be indexed based on the cost of living.
In all years, the penalty is also capped at an amount equal to the national average premium for the lowest cost bronze health plan available through the Marketplace.
The penalty is assessed based on “coverage months.” This means that each month you are uninsured, you may owe 1/12th of the annual penalty.
Are there exemptions to the penalty?
Yes. You may be eligible for an exemption if you:
Cannot afford coverage (defined as those who would pay more than 8 percent of their household income for the lowest cost bronze plan available to them through the Marketplace)
Are not a U.S. citizen, a U.S. national, or a resident alien lawfully present in the U.S.
Had a gap in coverage for less than 3 consecutive months during the year
Won’t file a tax return because your income is below the tax filing threshold (In 2013, the tax filing threshold is $10,000 for individuals and $20,000 for a couple)
Are unable to qualify for Medicaid because your state has chosen not to expand the program
Participate in a health care sharing ministry or are a member of a recognized religious sect with objections to health insurance
Are a member of a federally recognized Indian tribe
How do I prove that I had coverage and satisfied the mandate?
When you file your 2014 tax return you will have to enter information about your coverage or your exemption on the return. You should get a notice from your insurance provider by January 31, 2015, describing your coverage status during the previous year.
What kinds of coverage count as Minimum Essential Coverage to satisfy the requirement to have health insurance?
Most people with health coverage today have a plan that will count as minimum essential coverage. The following types count as minimum essential coverage:
Employer-sponsored group health plans
Retiree health plans
Non-group health insurance that you buy on your own, for example, through the health insurance Marketplace
Student health insurance plans
Grandfathered health plans
The Children’s Health Insurance Program (CHIP)
TRICARE (military health coverage)
Veterans’ health care programs
Peace Corps Volunteer plans
Be aware that outside of the Marketplace, other policies be for sale that may look like health insurance such as policies that only cover cancer. They are referred to as “hospital indemnity” or “excepted benefits” and do not count as Minimum Essential Coverage.
How do the premium tax credits work?
Premium tax credits may be claimed at the end of the year, or you can apply for an advanced premium tax credit based on your estimated income for the up-coming year. If you elect to receive an advanced credit, the government will pay 1/12 of the credit directly to your insurance company each month and the insurer will bill you for the rest of the premium. Keep in mind that when you apply for the premium tax credit, during Open Enrollment, you won’t necessarily know for sure what your 2014 income will be, so you will apply based on your best estimate of your 2014 income. Later, when you file your 2014 tax return, the IRS will compare your actual income to the amount of premium tax credit you claimed in advance. If you underestimated your income and claimed too much premium tax credit, you might have to pay back the difference.
Source: Kaiser Family Foundation