Posted on December 14, 2015
Each year during insurance open enrollment, Americans are faced with the decision to keep or change health insurance plans for the coming year. The choice is likely impacted by one’s health and financial situation—things that can definitely change from one year to the next! Just as one’s circumstances change, so do health insurance plans and the laws associated with those plans.
As you shop for Affordable Care Act (ACA)-compliant 2016 coverage, make yourself aware of possible changes in the following areas:
All states approved and finalized Obamacare plan premiums as of November 1, 2015, when open enrollment began. You may find your premium fluctuates from 2015 to 2016—it may go up, down, or remain relatively the same. ACA health plans are divided into four tiers, all named for metals, depending on the amount of customers’ care that they cover. Silver plans have proven by far the most popular.
As of October 1, 2015, a Kaiser Family Foundation analysis of silver plans in major cities in 13 states showed the following average rate increases from 2015 to 2016:
- 4.1%, the second lowest cost silver plan before tax credits;
- 1.9%, the second lowest cost silver after tax credits;
- 5.1%, the lowest-cost silver plan before tax credits; and
- 2.9%, the lowest-cost silver plan after tax credits.
Changes to your monthly premium may impact your decision to re-enroll in the same plan or switch to a new one in 2016. Either way, it’s wise to shop around to ensure you’re selecting health insurance that is agreeable to both your budget and your healthcare needs.
Your premium tax credit is based on a sliding scale and impacted by several factors, which include, but are not limited to:
- The size of your household;
- Household income; and
- The benchmark plan (i.e., the second lowest cost silver plan) where you live.
If you receive an advanced premium tax credit, which reduces your monthly health insurance payment, make sure to update changes to your household size and income during open enrollment and throughout the year. Also be sure to file your taxes and complete IRS Form 8962.
Under the Affordable Care Act, if you go without minimum essential coverage for more than a single period of up to three months in a year, you may owe a tax penalty known as the shared responsibility payment.
The penalty increases annually. In 2016 it will be the higher of these amounts:
- 2.5% of your annual household income above the tax filing threshold to a cap of the national average bronze plan premium; or
- $695 per adult and $347.50 per child under 18 to a maximum penalty of $2,085 per family.
If you are exempt from having qualified health insurance coverage, you will not owe the penalty, but you may need to apply for an exemption. You can find more information about exemptions at IRS.gov.
The ACA requires your health insurance plan to cover essential health benefits at 100% after you reach your annual out-of-pocket limit.
This out-of-pocket maximum changes annually and will be as follows in 2016:
- $6,850 for individual coverage; and
- $13,700 for family.
The maximum out-of-pocket is not required to include your health insurance premiums, non-essential health benefits, and or out-of-network costs including balance-billing amounts.
Provider networks change. If you consider keeping your current health plan in 2016, check the provider network to ensure your preferred doctors and hospitals are still included.
When shopping for different coverage, you should also look at the network to ensure your preferred providers are included. If you don’t have a preferred doctor or hospital, be certain the plans in-network providers are agreeable based on location and other factors important to you.
Drug formularies are also subject to adjustments. Make sure the medications you take are still listed on your plan’s formulary drug list, and note any changes to cost.
Health insurance carriers enter and exit the private marketplace as well as the ACA’s state-based and federally facilitated exchanges. They also make changes to the plans the offer. Keep that in mind before you decide to re-enroll in the same coverage. Why not take a look at what’s available before you commit?
If your plan or carrier plans to exit the market, as has been happening with the closure of health insurance cooperatives in many states, you will be notified.
The Bottom Line
Taking the subsidies into account, nearly four in five people who already have gotten insurance through these marketplaces will have access for 2016 to a health plan for which they could pay no more than $100 in monthly premiums, the analysis found. The analysis does not address other costs to consumers, such as co-payments and deductibles, which tend to be more expensive in ACA health plans than in employer-based health benefits.
The figures in the analysis reinforce a theme that Obama administration officials introduced last year and have revived as the third sign-up period approaches: the usefulness of researching the best and most affordable coverage, even if it means switching insurance from year to year.
“If consumers come back to the Marketplace and shop, they may be able to find a plan that saves them money and meets their health needs,” Kevin Counihan, the U.S. Department of Health and Human Services official who oversees the health exchanges, said in a statement.
Important dates to remember for 2016 enrollment!
- December 15, 2015: Last day to enroll in or change plans for new coverage to start January 1, 2016
- January 1, 2016: 2016 coverage starts for those who enroll or change plans by December 15.
- January 15, 2016: Last day to enroll in or change plans for new coverage to start February 1, 2016
- January 31, 2016: 2016 Open Enrollment ends. Enrollments or changes between January 16 and January 31 take effect March 1, 2016.
If you have questions about any healthcare issue, contact the primary care providers at Coastal Carolina Health Care by calling (252) 633-4111 or visiting www.cchchealthcare.com.
(Sources: Kiplinger; HealthCare.gov; Internal Revenue Service; The Henry J. Kaiser Family Foundation; The IHC Group; The Washington Post)