Individuals not having health insurance through work or a working spouse are eligible to receive health insurance coverage through the Affordable Care Act. While enrolling for ACA-compliant plans, individuals can be ensured that they will not be charged any extra or denied coverage for pre-existing conditions. All the ACA-compliant health plans are required to provide essential health benefits to the insured. There are some vital facts related to the Affordable Care Act that individuals should be aware of so they can obtain full advantage of this plan. Some vital facts related to ACA-compliant health plans are discussed below that people should be well aware of.
ACA-compliant Health Plans are for All
The Affordable Care Act became effective in March 2010, bringing several protections in place for the people. It was the Affordable Care Act that prevented people from getting health insurance denied based on preexisting health conditions. This Act also allowed adults to stay on their parent’s plan until the age of 26 years. It is illegal for health insurance companies to cancel an individual’s coverage if he/she is sick. As per the Affordable Care Act, health insurance premiums can only be affected by five factors such as age, number of people in the family, tobacco use, type of plan chosen by a person, and individual’s geographic area.
Thus, individuals who don’t have health insurance through employer or spouse can purchase a health plan through their state’s health insurance marketplace or insurance exchanges. These sites list all the plans available in an area, so residents of that area can easily compare plans available in their area. Some states have their own health insurance exchange websites while the majority of the states use the national healthcare exchange, HealthCare.gov.
Premiums of Marketplace Plans Vary
The health insurance plans available in the exchanges vary in terms of cost because these plans are divided into different metal-tiers. The Bronze metal-tier of plans have the lowest monthly premiums and the carriers pay about 60% of the insured’s eligible healthcare cost while they pay 40% themselves. According to the Kaiser Family Foundation, in 2021 the average monthly premium for the lowest-cost Bronze plan is $328. In contrast to this, Platinum plans have the highest premiums but the insurance carriers pay 90% of the insured’s healthcare costs.
Individuals have the option to choose plans within these tiers and they can choose plans either with lower or higher deductibles. While choosing a plan individuals should always think of the worst-case scenario. Individuals should always estimate the total cost of the plan by summing up their monthly premiums for the year along with the out-of-pocket maximum that is listed.
Annual Open Enrollment Period
Individuals have the option to enroll in an ACA plan only during the open enrollment period or during a special enrollment period. The annual open enrollment starts every year from November 1 through December 15, and the coverage starts from January 1. Significant life changes like getting married or divorced, moving, having or adopting a baby, losing health coverage, becoming a U.S. citizen, or leaving incarceration trigger a special enrollment period. Individuals can apply for a health plan during a special enrollment period by visiting HealthCare.gov or their state’s Marketplace website. While enrolling for a plan, individuals will need to specify the reason due to which they qualify for a special enrollment period and may also need to provide proof of it like a marriage certificate or divorce decree.
Individual Tax Penalty No More Applicable
When the Affordable Care Act was passed in 2010, there was a tax penalty on individuals who don’t have health insurance. However, with the passing of the Tax Cuts and Jobs Act in 2017, the tax penalty was repealed and 2018 was the last year when the tax penalty was applicable. It means that individuals now have the option to remain uninsured without paying a tax penalty. Nevertheless going without health insurance may have serious long-term consequences.
Individuals May be Eligible for Tax Credits
To make health insurance premiums affordable tax credits or subsidy is offered to low-income individuals. The tax credit or subsidy received by the individuals depend upon their income, which they can apply full or partial to their monthly premiums to reduce the costs. The tax credit is available to singles and families having modified adjusted gross income at 100% to 400% at the poverty line. Individuals whose Modified Adjusted Gross Income is less than $51,040 and a family of four Modified Adjusted Gross Income is less than $104,800 in 2021, then they will be under 400% of the poverty line. Besides tax credits, most of the states have also expanded Medicaid programs to include individuals at or below 138% of the poverty level.