Fall is here, and that can mean only two things: yards across America are about to be drowned in leaves, and Obamacare's open enrollment period is right around the corner.
Obamacare, or as it's officially known, the Patient Protection and Affordable Care Act, has had quite an impact through its first two years. So far, it has enrolled 9.95 million paying consumers, based on the latest data from the Centers for Medicare and Medicaid Services in June, and millions more have been insured through the expansion of Medicaid programs in 30 states.
However, Obamacare is itself not a static system. Changes are rolled out each year, and not understanding them could winding up costing you if you aren't paying attention. With this in mind, here are five essential things you'll want to be aware of.
1. The open enrollment start and end dates have changed (again!)
In the first year of Obamacare, consumers had a six-month period to enroll for health insurance (Oct. 1, 2013 to March 31, 2014). In the second year, that window shrank to three months (Nov. 15, 2014 to Feb. 15, 2015). This time around, it'll remain a three-month open enrollment window; however the start date is slightly earlier, reflecting the absence of national elections this year.
To purchase a health insurance plan for 2016, open enrollment begins on Nov. 1, 2015 and ends Jan. 31, 2016. Starting in 2017, the open enrollment period will shrink and shift for a final time -- that year (and, permanently thereafter, unless the government actively changes its mind) open enrollment through Obamacare will fall during a 2.5-month period from Oct. 1 to Dec. 15.
You'll need to select your plan between Nov. 1 and mid-December if you want your coverage to take effect on Jan. 1, 2016, although you'll have until Jan. 31, 2016 to select a plan on your state's Obamacare marketplace exchange.
2. The penalties for not buying health insurance are going up (a lot)
If you don't plan to purchase health insurance in the upcoming year, your penalty for non-compliance with the individual mandate -- the actionable component of Obamacare that essentially says "buy health insurance or pay a penalty" -- will be going up substantially.
Those penalties have been rising gradually to allow people to adjust to Obamacare, and to give holdouts an incentive to purchase health insurance. In 2014, the penalty was the greater of $95 or 1% of an individual's modified adjusted gross income (MAGI). H&R Block, which examined a massive amount of tax return data, reported that the average penalty paid for not having health insurance in 2014 was about $190.
This year, the penalty for non-compliance jumps to the greater of $325 or 2% of MAGI. In the 2017, the penalty will rise again, to the greater of $695 or 2.5% of MAGI. In short, if you plan to go without insurance, expect it to hurt more than ever when you file your taxes.
3. Shopping around can save you a lot of money
Unlike in 2014 and 2015, the upcoming enrollment period is shaping up to see some of the largest premium increases on a national level than we've seen since prior to the Great Recession. It means that consumers need to be more proactive than ever when it comes to saving themselves money.
Consumers are well advised to price out multiple plans within the tier they're considering. The Obamacare exchanges have made comparison shopping for health insurance easier and as transparent as possible for the consumer. Whereas in the past, doing side-by-side comparisons of plans was practically impossible, now it is fairly straightforward to examine multiple options side by side.
According to the Department of Health and Human Services, consumers in 2015 who chose not to shop around for the best deal cumulatively overpaid on their annual premiums by about $2 billion -- approximately $300 per person. One reason for this is simple: Last year's most affordable plan with the coverage you want may not be this year's most affordable plan. So, don't to allow yourself to be auto-enrolled in a plan until you've shopped around.
4. If you make less than 250% of the federal poverty level, buy a silver plan!
Far too many people who qualify for financial assistance under Obamacare are unaware that there are two forms of subsidies. The most common is the Advanced Premium Tax Credit, which helps lower the cost of yours premiums. However, there are also cost sharing reductions, or CSRs. These can lower the cost of copays, coinsurance, and deductibles for low-income individuals.
In order to qualify for the APTC, your household income must be between than 100% and 400% of the federal poverty level, or FPL. For a single individual, that worked out to be between $11,770 and $47,080 in 2015. For larger households, the number is, naturally, higher.
To qualify for CSRs, it's a narrower window -- your household income must be between 100% and 250% of the federal poverty line.
But there's a big catch. To get CSR assistance, you must buy a silver tier plan. That might seem counterproductive given that bronze plans have lower premiums than silver plans, but bronze plans do not offer any CSR assistance. Lower-income households that qualify should seek out cost-competitive silver plans; in the long run, the CSRs will help them afford not just their premiums, but their medical care as well. Ultimately, the right silver plan could prove thousands of dollars cheaper for them than a bronze plan.
5. You may qualify for an exemption under certain circumstances
Lastly, even though we're all now required to have health insurance, if for some reason you don't, there are quite a few exemptions available that may keep you from having to pay the aforementioned penalties. That doesn't mean you shouldn't buy health insurance, but there are fail-safes in place to cover individuals who experience life-changing events or simply can't afford it.
Examples of situations that could gain you an exemption include being unable to purchase health insurance because it would cost more than 8.05% of your household income, being a member of certain federally recognized tribes or religious sects, or being incarcerated.
Additionally, specific economic hardships such as the death of a close family member, filing for bankruptcy or being evicted within the past six months, or dealing with substantial medical expenses within the past 24 months, may qualify you for an exemption. In total, there are more than a dozen economic hardship exemptions that consumers may qualify for.
If you weren't able to afford health insurance in 2015, and may not be able to again in 2016, examine the exemptions list at Healthcare.gov to see if you qualify.