Make Your Health Insurance Plan Work For You
Do you dread the open enrollment process because choosing a health insurance plan is a headache and the other offers don't seem worth it? Why not get your health insurance through a Health Insurance Exchange and have more money in your wallet to spend on things like travel and clothes?
The benefits to using an Exchange are huge, but they can also be confusing. Luckily, we're here to break them down for you! Let's get started.
First up: "What is an Exchange?" A Health Insurance Exchange can help individuals who are buying their own coverage find health plans that suit their needs and budget. It's typically either run by state or federal governments or as partnerships between state governments and the federal government.
Choosing a plan through an Exchange can give you access to tax credits and cost-sharing reductions, which can help you pay for your health insurance. This is different from typical health insurance because it comes with lower deductibles and co-pays, which means more value for your premium costs and potential savings on your medical bills.
The most popular type of Exchange is a state Health Insurance Marketplace. These are run by the state government in partnership with the federal government. States that choose not to create their own exchanges have federally-facilitated marketplaces (FFM). To find out if you live in a state that has its own exchange or uses the FFM, check out this chart .
Here's a basic breakdown of how the Exchange works:
1. The ACA requires all Americans to have health insurance by 2014 or face fines. If you don't have health insurance, you won't be able to enroll in an Exchange plan unless you qualify for a federal subsidy (or "tax credit") based on your income and household size.
2. If you're not eligible for tax credits, you can still choose an individual plan through one of the Exchanges if it's offered there or through your state's FFM or Marketplace because it is sold alongside other individual coverage plans. This is referred to as being able to purchase directly from health insurance companies without the assistance of an Exchange.
3. Typically, Exchanges accept applications from individuals who either receive insurance through their employer or are self-employed. If you have Medicaid, Medicare, or other public coverage and apply for individual coverage in the Exchange, your application will be automatically rejected.
4. Open enrollment periods for all Exchanges vary by state and can occur as often as three months a year. During open enrollment, enrollees can qualify for federal subsidies based on their tax returns if they applied during the previous open enrollment period and were denied due to lack of coverage at that time. In 2015, the open enrollment period is November 15 through February 15 for all 50 states plus the District of Columbia (D.C. ). Check out your state's open enrollment period on the FFM website .
5. Insurance companies are required under federal regulations to accept all applications for insurance during open enrollment unless the applicant is missing information vital to the application process. In addition, they can't deny coverage or set premiums based on pre-existing conditions. If you're changing plans mid-year due to a change in your life that impacts your coverage (such as having a baby or losing your employer-sponsored coverage), your plan must accept you, and you will be able to enroll in new coverage effective July 1st if you wish (unless it's mid-summer).
6. To purchase coverage through your state's Exchange or FFM, you'll need to determine your eligibility for federal and state health insurance subsidies. If you're a single person with income up to $45,960, a family of two up to $62,040, or a family of three up to $72,300 (for 2015), you may be eligible for federal premium tax credits and cost-sharing reductions if you purchase coverage through an Exchange.
7. You can see how much subsidies will save you on premiums on the HealthCare.gov website . How much savings will depend on your income.
8. If you qualify, you must apply for insurance through your state's Exchange or FFM within a certain period of time before the start of the open enrollment period in order to receive coverage effective once the new year begins. Check out your state's deadlines for a plan selection and deadline extensions .
9. After purchasing a plan, you can choose to change plans or keep your existing one as long as it meets minimum standards and is permitted by the state exchange or FFM. You will need to pay any remaining balance on your old (or new!) plan balance after making changes to ensure coverage during that calendar year.
10. If you switch plans but still want to use the same doctor, hospital, or other provider, you won't be able to change them after the open enrollment period. They must remain under the same network and out-of-pocket limits.
11. Your coverage is portable if you work for a qualifying employer that offers insurance benefits as part of their plan. However, employers are not required to offer coverage and employees with group plans are not eligible for subsidies under federal law .
12. You can stay on your parent's health insurance plan until they apply for Medicare or qualify for Medicaid at age 65. A penalty will be assessed if you don't have health coverage, but be aware that this policy might change in the future.
Remember, if you have questions about enrolling in a health insurance plan or qualify for a tax credit or subsidy, you can always contact your state's Department of Insurance or the federal Health Insurance Marketplace directly. They'll be able to help you find the plan that best fits your needs and budget.
Updated September 11th, 2014
Content Source: U.S. Department of Health and Human Services website for Healthcare.gov . Lisalyn R. Jacobs, J.D. is an experienced health insurance broker who has helped thousands of people through the exchange plans. She is also a trained medical billing advocate . You can follow her on Facebook or Twitter for daily tips about navigating Healthcare.gov and finding a plan that fits your budget.
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About the author
Lisalyn R. Jacob Lisalyn R. Jacob, J.D., CMB is a former financial advisor who now focuses on consumer advocacy (specifically in the areas of health insurance and debt management).
Conclusion
Health insurance exchanges, also called state health insurance marketplaces or marketplaces, are an integral part of the Affordable Care Act . The goal is to provide a convenient way for individuals and small businesses to search and purchase health insurance. They're also intended to make it easier for people to compare plans so that they can find the best one that matches their needs.
Our exchange opportunities comparison calculator should help you get started at finding the plan that best suits your budget and needs. For more detailed research, be sure to check out all the links in this article, as well as our list of quotes from actual Affordable Care Act plans .