With the second annual open enrollment season for health insurance under the Affordable Care Act opening Nov. 1, 2015, there are certain things individuals newly seeking private insurance should know.
Covered California is the state’s marketplace for insurance in accordance with the federal Affordable Care Act, or as many refer to it as Obama Care, that was created by the California Department of Health Care Services for individuals and small businesses to purchase health insurance plans from about 10 different companies.
While the marketplace serves as a shopping mall of sorts to obtain coverage, it is not solely an avenue of obtaining government-subsidized insurance, though many may qualify for subsidies depending on annual household income. Prices will be available soon through the exchange.
Under the ACA, there are no annual limits on how much a plan will cover, and each plan has standardized benefits and free preventive care, and no one in need of health insurance cannot be legally denied coverage.
The marketplace helps to determine eligibility for assistance on a sliding-scale basis to reduce insurance costs, or to determine whether eligibility for low-cost or no-cost Medi-Cal, California’s low-income health coverage system, as long as all information is accurate. Notably, there are no special enrollment periods for Medi-Cal.
Health insurance subsidies are offered to individuals as a pre-tax credit, meaning, according to the information an individual submits regarding their household and income status, they are deemed eligible for certain credits which are applied to the plan they enroll in, co-dependent on their income tax filings. Instead of the consumer receiving a tax credit when they file income taxes, it is applied to the rate of insurance.
Individually, or with the help of a broker, individuals can compare health insurance plans and choose what works best for their situation. Small businesses have the option to buy health insurance plans and offer employees options array of plans and may qualify for federal tax credits.
The only way to obtain coverage outside of the open enrollment period is to have a “qualifying life event” such as turning 26, the cutoff age for staying on parents health insurance plan, getting married, having a child, losing or obtaining employment. A qualifying event would grant an individual a “special enrollment period” of 60 days to enroll in new health coverage.
If an individual does not obtain health insurance, they face a tax penalty which increases yearly, and is based on income.
If an individual does not have health insurance in 2016, a fine of either 2.5 percent of their yearly taxable household income, or $695 per adult, will be applied to what is owed on their federal income taxes.
Because no one can be denied coverage under the federal mandate for care, individuals are required to pay into plans, both when they are in need of care and when they are not. Potential implications of a system with no enrollment periods would lend to individuals enrolling and canceling plans care was needed.
If an individual makes more money than they report when enrolling in insurance, they are subject to paying offered tax credits back when filing their federal income taxes. Conversely, if an individual ends up earning less than they anticipated, or an event occurs that would contribute to a change in subsidies they would be eligible for, they would receive an increased tax credit.
Nov. 1, 2015: Open enrollment begins through Covered California; coverage can begin as soon as Jan. 1, 2016
Dec. 1, 2015: last day to enroll or change plans for new coverage to begin Jan. 1, 2016
Jan. 1, 2016: Coverage begins for those who enroll or change plans by Dec. 15, 2015
Jan. 15, 2016: Last day to enroll in or change plans for new coverage to begin Feb. 1, 2016; enrollments or changes done between Jan. 16 and Jan. 31 are effective March 1, 2016
Jan. 31, 2015: Last day of open enrollment season; enrollment outside of this period is not allowed unless there is a qualifying special enrollment period
Click here to preview plans for the 2016 enrollment period. If you have an existing health insurance plan, learn more about re-enrollment here.