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October traditionally marks the beginning of open-enrollment season—your annual opportunity to choose healthcare coverage from the options provided by your employer. But selecting the right health insurance can be confusing—even frustrating. This year may be even more challenging because many of the most sweeping changes brought about by the Affordable Care Act (ACA), President Barack Obama’s signature healthcare reform legislation, are about to go into effect, and no one knows for sure how it will all work out.
Based on what we know about the law, however, we can make short-term projections about some of the changes people will encounter. In this article, we’ll focus on workers who have insurance through their employers and those who do not.
Workers Who Do Not Have Health Insurance Through Their Employers
In the past, folks who worked for employers that did not offer insurance coverage often had difficulty finding or affording an individual policy. The ACA attempts to change that with several new provisions:
First, as of January 1, 2014, health insurance companies must accept all applicants. That means insurance companies can no longer deny or charge you more for coverage if you have a pre-existing condition.
Second, many people will qualify for help to pay for their insurance coverage. If your household income is less than 400% of the poverty level ($94,000 for a family of four) you may be eligible for a tax credit to help you pay for your health insurance premiums.
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To receive the credit, you must purchase a policy from your state’s insurance exchange. An exchange is simply an online marketplace where you can compare plans and prices. You can select from four levels of coverage: bronze, silver, gold and platinum. Platinum is the most comprehensive and expensive and bronze is the least.
Workers Who Have Health Insurance Through Their Employers
In 2015, employers with more than 50 employees will be required to offer health insurance to their employees. However, many employers are preparing for this mandate by updating their policies now.
The new policies must cover at least 60% of an employee’s healthcare expenses including copays, co-insurance, deductibles and out-of-pocket caps. And the employee’s share of the premiums for the lowest-cost individual plan cannot exceed 9.5% of the employee’s pay.
If your employer doesn’t offer a plan that meets these requirements, you and your family may then be eligible for a tax credit to purchase a policy on your state’s health insurance exchange.
But if your employer-sponsored coverage does meet the requirements, you and your dependents are not eligible for the credit. Keep in mind that the affordability factor is based on the cost of individual coverage through your employer, not what you’d pay to cover a family.
How Can You Be Sure to Make the Right Choice?
Another requirement of the ACA is that all Americans (with few exceptions) must have health insurance coverage in 2014 or face a penalty. So this isn’t an issue you can avoid, no matter how complicated it seems.
And, since this is a new and complicated law, any part of it could change at any time. Our insurance Endorsed Local Providers (ELPs) have been studying the healthcare changes and are prepared to do all they can to explain your options to you and help you crunch the numbers until you find the policy that provides the best value for your family. Don’t put this off. Contact your ELP today!