Whether you realize it or not, the last day to enroll for health insurance on your state's Obamacare marketplace exchange is today!
Enrollment for Obamacare -- or the Patient Protection and Affordable Care Act -- began this year on Nov. 1, 2015, and has been ongoing for three months, the same enrollment length we saw for calendar-year 2015 coverage.
The difference this year, and what might be catching some consumers off-guard, is that the enrollment end date continues to move forward. For 2014, the first year Obamacare was officially the health law of the land, the enrollment period lasted six months and extended through March 31, 2014. The following year, because of the elections, enrollment didn't begin until Nov. 15, 2014, allowing enrollment to continue for three months until Feb. 15, 2015. This year, with no midterm elections to worry about, open enrollment kicked off 15 days sooner, meaning it also ends 15 days earlier. We'll likely deal with the same problems heading into the 2017 calendar year with the enrollment period shortening to just two-and-a-half months (Oct. 1, 2016 to Dec. 15, 2016), but we'll worry about that in due time. For now, let's just focus on what you need to know if you haven't already purchased health insurance.
It's not too late
The first thing you should know is that if you haven't purchased health insurance on the Obamacare health exchanges, it's not too late. Anyone enrolling between Jan. 16 and Jan. 31, 2016 on HealthCare.gov, the federally run marketplace covering 38 states, isn't going to be fully covered until March 1, 2016 anyway. It can take around two weeks for insurance companies to process your application and for states to determine whether you do qualify for an Advanced Premium Tax Credit (APTC) or cost-sharing reductions (CSRs). Simply getting your application filed and selecting a plan is all you'll need to do before midnight strikes.
It's worth noting that some states, and even HealthCare.gov, have on occasion extended the deadline, briefly, to persons who were unable to complete their application process in a timely manner. It remains to be seen if that happens again, but I personally wouldn't count on this practice to continue.
You can also enroll after the deadline... with a catch
Consumers should also be aware that they can still enroll beyond the Jan. 31, 2016 deadline, but they'll be doing so on a private exchange or directly with a health-benefits provider.
For persons making more than 400% of the federal poverty level (around $47,000) per year, the Jan. 31, 2016 date may not mean much at all, although you'll still want to ensure you don't go more than two consecutive months without health insurance or you'll breach one of the components of the individual mandate. It may also be tougher to make side-by-side plan comparisons, but private exchanges such as eHealth have come a very long way and offer a very comparable platform to the Obamacare exchanges when it comes to plan cross-comparisons.
Persons making less than 400% of FPL are who could lose out big time if they don't enroll by the end of today. Enrolling directly with an insurer, or on an exchange outside of your states' marketplace exchange, generally means no access to subsidies. Without financial assistance, it can be very costly to downright unaffordable for Americans making less than 400% of FPL to buy health insurance.
If you make 250% of FPL or less, you may want to buy a silver plan
If you do qualify for a subsidy, and you happen to make less than 250% of the federal poverty level ($29,425 or lower), then it's probably in your best interest to not only enroll today but also to consider selecting a silver-tier plan.
Generally speaking, consumers earning below 400% of FPL are likely to be eligible for the APTC. Although it depends on your income, the APTC can substantially lower your monthly premium payment. In 2015, the average pre-APTC premium ran $374 per month according to the Department of Health and Human Services, and cost just $106 per month after the credit was applied. In 2016, based on early data, the average U.S. premium is over $400 a month, with the after-APTC cost totaling only $113 per month.
But consumers with incomes at or below 250% of FPL may also qualify for CSRs. Cost-sharing reductions help pay for some of the costs associated with receiving medical care, such as copays, coinsurance, and deductibles. The only way a consumer becomes eligible for CSRs is if they earn less than 250% of FPL, and they purchase a silver plan. Although a bronze-tier plan does have slightly lower monthly premiums, there are no CSRs eligible with plans in that tier.
You'll pay a penalty for being uninsured
If you choose not to purchase health insurance on the Obamacare marketplace exchanges, or anywhere else for that matter, you'll be in violation of the individual mandate, which requires everyone to buy health insurance or face a penalty.
In 2014, the penalty was the greater of $95 or 1% of an individual's modified adjusted gross income, or MAGI. The initial penalty wasn't meant to cripple the pocketbooks of the uninsured, so much as get their attention that a new law was now in place. By 2015, the penalties jumped dramatically to the greater of $325 or 2% of MAGI. They spike higher once more in 2016 to the greater of $695 or 2.5% of MAGI. According to estimates from the Kaiser Family Foundation, the average shared responsibility payment for being uninsured this year is estimated to be $969!
You may also be exempt from the penalty
Despite not having health insurance and being in violation of the individual mandate penalty, you may also be exempt from having to pay the penalty. If more than 8.5% of your income would be used to pay for the lowest-cost bronze level plan, your income will exempt you from paying the shared responsibility payment. Certain recognized religious members and Indian tribes are also exempted from the SRP.
One of the trickier exemptions is the hardship exemption, which is comprised of more than a dozen ways you may be able to avoid paying the penalty. As the name describes, you'll have to prove to the IRS that you've experienced one of the listed hardships, such as having recently declared bankruptcy or dealing with the death of a family member, in order to be cleared of the SRP.
Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
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