The end of the year has a new meaning these days, and it has nothing to do with holiday cheer.
For the second consecutive year, Americans have to consider purchasing health insurance through their employer, privately from an insurer or insurance exchange, or through one of the Affordable Care Act's marketplace exchanges. As the ACA -- which you might know better as Obamacare -- individual mandate decrees, Americans must either purchase health insurance in 2015 or face a penalty that is the greater of $325 or 2% of their modified adjusted gross income.
Three critical dates to be aware of
However, Obamacare's deadlines for the last enrollment look nothing like the deadlines imposed by regulators this time. Due to technical glitches that made the federally run insurance marketplace, Healthcare.gov, along with a handful of individual states practically unusable for a few months, and taking into account the general newness of the law, many deadlines were extended and the overall length of time when Americans could enroll was considerably longer than initially planned. With a year of experience under everyone's belt, people seeking health insurance in the current, second enrollment period need to acquaint themselves with three critical deadlines.
Dec. 15: This coming Monday marks the last day consumers can choose an insurance plan and have coverage kick in on Jan. 1, 2015. Insurers need time to process the hordes of applications being submitted, and some time is needed to verify consumers' income levels to determine whether they qualify for subsidies. In the 2013-2014 enrollment period, for example, 85% of enrollees qualified for some form of financial help in paying for their insurance plan.
In addition, if you purchased health insurance through an Obamacare marketplace last year, many folks will be automatically re-enrolled in the same plan for 2015 if you take no action by Dec. 15 of this year (though automatic re-enrollments may not occur in some cases). So those looking to change plans will want to take action in the next few days.
Dec. 31: The end of the year can get a bit confusing for consumers, considering that the re-enrollment process can differ from state to state. Also, we have to remember that quite a few people -- 66%, according to Radius Global Market Research -- are expected to switch plans this year in an effort to save money. All this shuffling could cause consumers to lose sight of the fact that their current insurance plan remains active through Dec. 31, 2014, even if they enrolled in a new plan for next year. That might sound like common sense, but for a few weeks, especially if you have changed plans, you could have what seem like overlapping plans although only one is active at a time. It's something to be keenly aware of, especially when scheduling medical care around the end of the year.
Feb. 15, 2015: Lastly, consumers need to know that the current insurance open enrollment period is just half the length of the first enrollment period from 2013-2014 -- three months. The last day to enroll for coverage in 2015 through the Obamacare exchanges is Feb. 15.
If we learned anything during the first enrollment period, it's that Americans are natural procrastinators, and unless they need medical care they're likely to put off buying their health insurance until the last possible moment.
The ACA individual mandate allows Americans to be uninsured for up to three months throughout the year. This means those who plan to wait to the last second can buy health insurance on Feb. 15 and avoid making their January and February premium payments without violating the mandate. For those people who are unlikely to use their health insurance much, if at all, it's a money-saving maneuver. It's also the reason why we saw enrollment double in the final few weeks of the sign-up period earlier this year. I'd expect something similar to happen again beginning in late January and heading into the Feb. 15 deadline.
It remains to be seen just how many new enrollees Obamacare will court in 2015, as well as how many people ultimately change plans, but consider yourself now well informed on the critical upcoming Obamacare deadlines.