Health Coverage Reminders

As we get ready to close out 2015, we thought it might be a good time to remind everyone about individual health coverage as required by the Affordable Care Act (ACA).

Individuals seeking coverage for next year can now sign up during the open enrollment period that ends Jan. 31, 2016.  Effective dates depend on the date of enrollment, as noted below:

• Sign up between Nov. 1, 2015 – Dec. 15, 2015:  Coverage will begin Jan. 1, 2016
• Sign up between Dec. 16, 2015 – Jan. 15, 2016:  Coverage will begin Feb. 1, 2016
• Sign up between Jan. 16, 2016 – Jan. 31, 2016:  Coverage will begin March 1, 2016

Under health care reform, every adult must either have health insurance that meets minimum standards of coverage or pay a penalty when filing tax returns.  The penalty increases each year. In 2015, the fee is 2 percent of your income or $325 per adult and $162.50 per child, with a family maximum of $975. In 2016, it will be 2.5 percent of income or $695 per person, whichever is greater, and $347.50 per child up to a $2,085 family maximum.  Those who choose to pay the penalty and remain uninsured will still be responsible for 100 percent of the cost of their medical care.

While the penalty applies to the vast majority of Americans, there are certain exemptions. Uninsured people will not have to pay a penalty if they:

• Are uninsured for fewer than three months of the year
• Have very low income and coverage is considered unaffordable
• Are not required to file a tax return because their income is too low
• Would qualify under the new income limits for Medicaid, but their state has chosen not to expand Medicaid eligibility
• Are a member of a federally recognized Indian tribe
• Participate in a health care sharing ministry
• Are a member of a recognized religious sect with religious objections to health insurance

Elderly: The elderly now receive free preventive services under Medicare, annual wellness visits and personalized prevention plan services. Once those with Medicare prescription drug coverage enter the “donut hole” coverage gap, they will be eligible for drug discounts and subsidies, until the donut hole is completely closed in 2020. Medicare beneficiaries earning $85,000 or more will pay higher Part B premiums until 2019. High-income individuals will also pay higher premiums for Medicare prescription drug coverage. Those with Medicare Advantage plans may lose some benefits or experience an increase in copayments.

Unemployed and uninsured: Many individuals who are unemployed and uninsured likely qualify for Medicaid under the coverage expansion that began in 2010. The expansion of funding for community health centers, designed to offer free and reduced-cost care, will also provide relief. Certain uninsured individuals with pre-existing conditions can obtain coverage through the temporary high-risk pool as well.  Employees who do not have job-based health insurance, but earn too much income to qualify for Medicaid, can buy health insurance through the health insurance Marketplace.

Small-business owners: Organizations with 25 or fewer workers may be eligible for a tax credit to help provide coverage for employees. Starting in 2014, this tax credit was made available only to small business owners that use a Marketplace’s Small Business Health Options Program (SHOP) to purchase health coverage for their employees. Employers with 50 to 99 employees must provide benefits or face a penalty beginning in 2016, and employers with 100 or more full-time employees must provide benefits or incur a penalty starting in 2015.

Young adults: Children may stay on their parents’ policies until age 26. Those who buy coverage on their own or through the Exchanges can obtain cheaper catastrophic coverage. Individuals who obtain traditional benefits packages will pay less than those who are older than age 26. As part of the individual mandate, individuals age 26 or younger must obtain coverage unless qualified for an exemption.

Adults with a pre-existing condition: Adults with pre-existing conditions will be able to obtain individual coverage through a Marketplace and pay the same rate as other participants in the same age group. Insurers cannot place annual or lifetime limits on coverage, nor can they deny coverage or charge higher premiums due to a pre-existing condition.

Children with a pre-existing condition: Group health plans and health insurance issuers may not impose exclusions on coverage for children with pre-existing conditions. This provision applies to all plans offered through the Marketplace.

For more information about individual insurance, contact a Caravus Individual Market consultant.