Open Enrollment Has Started for the Health Insurance Marketplace & What That Means for You

This article was last edited on Oct. 16, 2013. For updated information on the marketplace, visit this post.

The health exchanges are now open, though some of you still have lots of questions about how the Affordable Care Act affects you and your family. Here’s a refresher on what you need to know:

The deadline . Open enrollment runs between October 1, 2013 and March 31, 2014. You don’t have to sign up that first day. Plans bought through the exchanges before December 15 will not start until January 1. If you sign up in January or February your coverage will start the following month.


What is qualifying health coverage ? Employer-provided insurance; government programs like Medicare, Medicaid, CHIP; COBRA; privately purchased insurance; or coverage you purchase on a state or federal marketplace.


What if I already have health insurance? 80% of Americans already have health insurance through their employer, Medicaid, Medicare, or individual insurance and are already in compliance with the new law. If you are one of these Americans, you do not need to do anything.

What are “Exchanges” or “Marketplaces”? Starting October 1, 2013, there are Marketplaces (also known as “exchanges”) for those who do not have insurance and for small businesses with up to 50 employees. The state and federal governments are not providing the coverage; rather they are aggregating the information for consumers through one platform—the Marketplace. It’s like using Travelocity to understand the cost of various airlines flying to your desired destination, rather than visiting each airline’s website to find the same information.

The Affordable Care Act planned that most states would establish and run their own online health insurance Marketplaces, with federally run Marketplaces as a backstop. However, only 16 states and the District of Columbia have done so; seven more are partnering with the federal government to operate their Marketplaces. In the other 27 states, people without insurance will use federally managed Marketplaces to shop for coverage.


The health care plans.   Individuals can choose among 4 plans: bronze, silver, gold and platinum, which are intended to cover 60 to 90 percent of health costs that a health plan would pay for an average person. Insurers do not have to offer all four plans, but within the health insurance marketplaces, all insurers must offer at least one silver and one gold plan. Costs of each type of plan vary by state.


What are the penalties for not having coverage? The greater of:

·          2014 : $95 per uninsured adult in the household, capped at $285 per household OR 1 percent of the household income

·          2015 : $325 per uninsured adult in the household, capped at $975 per household OR 2 percent of the household income

·          2016 : $695 per uninsured adult in the household, capped at $2,085 per household OR 2.5 percent of the household income


Are there exemptions from penalties ? Yes, for economic hardship (income below 100 percent of poverty level, those who are unable to pay for coverage that is more than 8 percent of household income), religious objections, American Indians, those without coverage for less than 3 months, undocumented immigrants and incarcerated individuals.


Will the government help financially?   Tax credits for individuals and families making between 100 and 400 percent of the federal poverty level to purchase insurance through the Marketplaces and are ineligible for coverage through an employer or a government plan, like Medicare and Medicaid. Current household income limits for 100 to 400 percent of the poverty line are:

·          $11,490 (100%) up to $45,960 (400%) for one individual

·          $15,510 (100%) up to $62,040 (400%) for a family of two

·          $23,550 (100%) up to $94,200 (400%) for a family of four


Will there be changes to Medicare?   Higher-income Medicare beneficiaries (those who earn more than $85,000 per person or $170,000 per couple) will pay slightly more for their prescription drug coverage, or Medicare Part D. This is expected to affect about 5 percent of beneficiaries.

Most Medicare recipients will see their drug costs go down as the Affordable Care Act begins to close the “donut hole,” which is a coverage gap that forces Medicare beneficiaries to pay 100 percent of their prescription drug costs up to a certain amount. This gap is expected to be fully closed by 2020, but those who fall into the gap this year will get a 47.5 percent discount on certain brand-name drugs and a 21 percent discount on generic drugs until they reach the out-of-pocket limit.


Will there be changes to Medicaid?   Affordable Care Act will mean an expansion of Medicaid to anyone under 65, with income eligibility levels of 133 percent of poverty level.

This article is intended to provide general information to the public and does not provide personalized tax, investment, legal, or business advice. You should seek the assistance of a professional for advice on taxes, investments, and any other financial, legal, or business matter pertinent to your individual situation.

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