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MMIC Offers Advice on Individual and Group Insurance Plans
Individual Insurance Plans The Affordable Care Act (ACA) mandates that all eligible Americans must have health insurance or pay a tax penalty. However, you just can’t go out and purchase health insurance whenever you want. There are two options available:
• Open enrollment (November 1, 2015) for coverage that starts January 1, 2016.
• Special enrollment available to individuals with a qualifying event.
Open Enrollment Dates The open enrollment for health insurance plans is not far away. Here’s what you need to know about open enrollment for health coverage in 2016. Open enrollment starts November 1, 2015 and goes through January 31, 2016. When you sign up will determine when your coverage starts. If you don’t enroll in a 2016 plan by January 31, 2016, you can’t enroll in a health insurance plan unless you qualify for a special enrollment period.
• Sign up starting November 1 and by December 15 and coverage will be effective beginning January 1, 2016.
• Sign up December 16 – January 15 and your coverage will start February 1, 2016.
• Sign up January 16-31 and your coverage will start March 1, 2016.
Special Enrollment You are eligible for a Special Enrollment Period if:
• You get married.
• You get divorced and were receiving health insurance through your spouse’s employer.
• You have a baby, adopt a baby, place a child for adoption or foster care.
• Your spouse or partner dies leaving you without health insurance.
• Your spouse or partner loses a job and you had coverage through their employer.
• Your hours reduced and you are no longer a full-time employee.
• You are insured under an HMO and move out of coverage area.
• You leave jail or gain citizenship.
Who Needs To Sign Up?
• You need to buy health insurance if you don’t have coverage through your employer or your spouse’s employer
• You are older than 26 and cannot be on your parents health insurance anymore.
• If you do not have coverage through the Veteran’s Administration, Medicare or Medicaid.
What If You Do Nothing? If you don’t sign up for health insurance during the open enrollment period, you may have to wait an entire year to sign up. If you don’t sign up you could be subject to penalties at tax time, and pay the higher of these two amounts:
• 2.5 percent of your yearly household income or
• $695 per person ($347.50 per child under 18).
The fee will be paid from the federal income tax return you file for the year you don’t have coverage. Most people will file their 2016 returns in early 2017.
Group Insurance Plans Currently, all states define small group insurance markets as employers with up to 50 employees under the ACA. Beginning in 2016, the definition of the small group market will be significantly expanded to include employers with up to 100 employees. Expanding the definition of the small group market to include mid-size employers (51-100 employees) could have far-reaching implication for the affordability and stability of coverage because the use of health status or claims experience are barred in establishing premiums.
In some ways, the ACA treats large and small employers differently. Large employers (companies with an average of more than 100 full-time employees) have to offer their full-time employees access to health insurance or pay a penalty. This mandate does not apply to employers with fewer than 100 full-time employees. So these small employers will not be penalized if they don’t offer health insurance to their employees.
Small Employers (1-100 employees) There is a lot to consider:
• Should the company offer health insurance to employees, and if so, should it be employer-based or through an individual or small group public exchange.
• What health plans are available?
• Are tax credits available?
• What are the additional costs associated with offering health insurance?
• Are public exchanges a viable option?
• What are the consequences of not offering coverage?
Large Employers (over 100 employees)
• Must offer employees and their dependents health insurance that provide minimum value and is affordable.
• Failure to meet affordable requirement (employee contributes more than 9.5 percent of their income) may subject the employer to a penalty.
• Must contribute a uniform percentage of at least 50 percent toward their employee insurance.
• Employer that does not provide health insurance will be subject to a penalty of $2,000 for each full-time employee in excess of 30.
For questions or to discuss individual or group health plans, call toll-free 1-800-349-1039, email mmic@mmicinsurance.com or visit mmicinsurance.com.
ABOUT THE AUTHOR: Ed Sterczek, president of MMIC, has over 30 years’ experience in the analysis and development of successful insurance programs for individuals and employer groups. MMIC is an AFSA-endorsed service and will analyze the health insurance needs of AFSA members to provide impartial objective advice with a view to improving coverage and reducing costs. Visit firesprinkler.org/member-center/
business-solutions or mmicinsurance.com.