During the open enrollment period, many individuals decide to continue with their current plan, assuming that the same coverage is the best choice for them year after year. However, this might not be always the case, especially with some leading health insurance companies entering and exiting the market every year, fluctuation in the costs and network of the plan, and changes in the life circumstances. Thus, people should do themselves a favor and should take some moment to find the options available to them during the open enrollment period every year.
Earlier Americans were required to have minimum essential coverage under the Affordable Care Act’s individual shared responsibility provision. Individuals who don’t have minimum essential coverage owed a federal penalty at tax time. The federal tax penalty that was applicable for not having health insurance was repealed on January 1, 2019. With individual mandate remaining no more effective in most of the states, individuals now have a wide range of coverage options.
People can now enroll in an individual major medical plan either through federal or state exchanges or through a private marketplace. Besides, even Medicaid plans are also available for people who qualify for this plan, and people can now also have the option to consider plans that do not include minimum essential coverage such as short-term health plans. Depending upon their situation individuals can choose the best health plan. Individuals need to consider the following questions while choosing the best plan for themselves:
- Whether they qualify for a financial subsidy on the exchange or not?
- If they do not qualify for the subsidy, can they afford the full price of the ACA-plan?
- Are they in good health or have medical conditions that require ongoing care?
- Do they want a health plan that includes all of the ACA’s essential health benefits along with preventive services?
- Whether they qualify for a health plan that requires underwriting or they require a plan that offers guaranteed coverage like ACA-plans?
- Are they live in a state, which enforces their own individual mandate with a tax penalty?
After knowing the answers to all these questions people will be able to make informed decisions in choosing the best plan.
Health Insurance Choices
Individuals with No Subsidy on ACA Plans should look for some other alternatives
Unsubsidized ACA premiums in 2020 are $331 per month for the lowest-cost bronze plan, $442 for the lowest-cost silver plan, and $501 for the lowest-cost gold plan. Individuals who don’t qualify for a premium tax credit through an exchange are required to pay the full price of the major medical plan, irrespective of the place from where they buy it. Thus, such people should look at other health plan alternatives such as short-term health plans or other options like faith-based or health sharing ministries.
A short-term plan is a relatively budget-friendly option that provides benefits like reducing out of pocket costs for unexpected medical care rather than paying fully for healthcare services required for long-term options. These plans are termed as a temporary solution so do not include all of the ACA’s essential health benefits. Short-term plans generally include benefits like doctor office visits, hospitalization, and emergency care. Different companies offer different types of short-term plans, as some plans come with additional benefits like dental and vision discounts and some might also include coverage for some preventive care screenings.
Faith-Based Plans & Healthcare Sharing Ministries
Individuals looking for economic coverage options can find faith-based plans and healthcare sharing ministries lucrative. These economical coverage options are available in every state and provide a way to share medical expenses with like-minded people, besides receiving other support like a prayer. However, individuals considering such plans should keep in mind that these plans are not insurance and hence are not regulated by any authority.
Individuals under some circumstances may find ACA plans as their best option. While considering ACA plans they should look to shop for a major medical plan through the federal and state exchange to check whether they qualify for subsidies or not. Besides premium tax credits that lower their monthly premium, individuals may also be eligible for cost-sharing reductions, if their household income is below 250% of the federal poverty level. Cost-sharing reductions lower their copayment, deductible, and coinsurance amount when they enroll in exchanged based silver-plan. People should be truthful about their taxable household income and should immediately report any changes in their income to avoid any penalty later on. ACA plan is also the best option for people having a pre-existing condition or people who require on-going medical care. Simple because these people will not qualify for short-term plans and they surely want access to all of the essential health benefits of an ACA plan. People will also prefer ACA-plans if they live in a state that has imposed its own individual mandate and penalty.
Six States Having Health Insurance Mandate & Penalty
Though the federal penalty has been eliminated from most of the states but six states have still imposed their own individual mandate. Residents living in these states need to have minimum essential coverage or they will owe a tax penalty. Six states having individual mandate are:
California state has individual mandate effective from January 1, 2020. Residents not having minimum essential coverage owe a penalty of 2.5% of salary or $695 per adult, and $347.50 per child, or up to $2,085 per family whichever is greater.
Massachusetts state individual mandate is effective from 2006, and the state penalty predates the ACA. The penalty amount depends on income, age, and family size.
New Jersey state individual mandate is effective from January 1, 2019. The penalty amount depends upon income, age, and family size.
Rhode Island state individual mandate is effective from January 1, 2020. The penalty from not having minimum essential coverage is 2.5% of income above the filing threshold or a flat amount of $695 per adult and $347.50 per child, whichever is greater.
Vermont individual mandate is effective from January 1, 2020. No penalty will be imposed.
Washington, D.C. individual mandate is effective from January 1, 2019. Penalty for not having minimum coverage is 2.5% of salary or $695 per adult and $347.50 per child, up to $2,085 per family, whichever is greater.