Health Insurance 101 – Start here!
Hi All!
We’ve put together the following wiki as an attempt to help out with general questions as we approach open enrollment.
Topics:
What is the ACA
What is Open Enrollment?
Why Do We Have Open Enrollment?
Why Do You Need Health Insurance
What is the marketplace?
Who is in my household?
What is the APTC And who is eligible?
What is FPL?
FPL and the APTC
How do I know if my state expanded medicaid?
What happens if I don’t enroll in health insurance?
What about the tax penalty?
Let’s talk about plan structures
What is a Deductible?
Coinsurance?
Copayment
Out of Pocket Maximum
How to pay for your deductible
Short Term Health Plans
What is the ACA?
The comprehensive health care reform law enacted in March 2010 (sometimes known as ACA, PPACA, or “Obamacare”).
The law has 3 primary goals:
Make affordable health insurance available to more people. The law provides consumers with subsidies (“premium tax credits”) that lower costs for households with incomes between 100% and 400% of the federal poverty level.
Expand the Medicaid program to cover all adults with income below 138% of the federal poverty level. (Not all states have expanded their Medicaid programs.)
Support innovative medical care delivery methods designed to lower the costs of health care generally.
With regard to your employer, if your employer has over 50 employees, they are required to provide you compliant insurance that meets Minimum Essential Coverage and Minimum Value standards. Your employer also must subsidize at least 50% of the premium to enroll the employees.
What is Open Enrollment?
https://www.healthcare.gov/quick-guide/dates-and-deadlines
https://www.healthcare.gov/glossary/open-enrollment-period/
The yearly period when people can enroll in a health insurance plan. Open Enrollment for 2021 runs from November 1 through December 15, 2020.
Insurance plans elected during Open Enrollment will start as early as Jan 1, 2021.
Outside the Open Enrollment Period, you generally can enroll in a health insurance plan only if you qualify for a Special Enrollment Period. You’re eligible if you have certain life events, like getting married, having a baby, or losing other health coverage.
The follow states have permanently adopted expanded enrollment periods:
California: November 1 to January 31
Colorado: November 1 to January 15
District of Columbia: November 1 to January 31
Massachusetts: November 1, 2020 to January 23, 2021.
Minnesota: November 1 to December 22, 2020.
New Jersey: November 1, 2020 to January 31, 2021.
New York: November 1, 2020 to January 31, 2021.
Nevada: November 1, 2020, to January 15, 2021.
Pennsylvania: November 1, 2020, to January 15, 2021
Rhode Island: November 1, 2020 to January 23, 2021.
Washington: November 1, 2020, to January 15, 2021.
Why do we have Open Enrollment (OE)?
OE is designed for anyone eligible to purchase on the marketplace to make their elections for 2021. With the introduction of the ACA legislation, you cannot buy insurance whenever you want – this prevents people from enrolling only when they know they need the health insurance, which drives up prices for everyone.
Why do you need health insurance?
Medical costs are the leading cause for bankruptcy in the US, and everyone is always healthy until they are not. By enrolling in an ACA compliant healthcare plan, you receive the benefits of a provider network, contracted negotiated rates on services, an out of pocket max which caps your personal spending each year, and other state/federal protections on your healthcare experience.
What is the marketplace and who can use it?
Any US citizen or qualifying immigration status (https://www.healthcare.gov/immigrants/immigration-status/) may purchase off of the marketplace, even if you have employer insurance.
Who is in my Household?
Household = you, spouse, tax dependents. It is not necessarily who you physically live with.
What is the APTC and who is eligible?
The APTC stands for Advanced Premium Tax Credit and is a subsidy provided to people with incomes between 100 – 400% FPL if your state has not expanded Medicaid or 138 – 400% FPL if your state has expanded Medicaid. You are eligible for the APTC if your income falls in this range and you have no employer insurance available. If you are Medicaid eligible, you should apply there as you will not qualify for the APTC; however, you are welcome to purchase a full price marketplace plan instead if you prefer.
What is FPL?
A measure of income issued every year by the Department of Health and Human Services (HHS). Federal poverty levels are used to determine your eligibility for certain programs and benefits, including savings on Marketplace health insurance, and Medicaid and CHIP coverage.
The 2020 federal poverty level (FPL) income numbers below are used to calculate eligibility for Medicaid and the Children’s Health Insurance Program (CHIP).
Household Size100%138%250%400%1$12760$17609$31,900$51,0402$17,240$23,792$43,100$68,9603$21,720$29,974$54,300$86,8804$26,200$36,156$65,500$104,8005$30,680$42,339$76,700$122,7206$35,160$48,521$87,900$140,640
FPL and the APTC:
Income between 100% and 400% FPL: If your income is in this range, in all states you qualify for premium tax credits that lower your monthly premium for a Marketplace health insurance plan.
Income below 138% FPL: If your income is below 138% FPL and your state has expanded Medicaid coverage, you qualify for Medicaid based only on your income.
Income below 100% FPL: If your income falls below 100% FPL, you probably won’t qualify for savings on a Marketplace health insurance plan or for income-based Medicaid.
“Income” above refers to “modified adjusted gross income” (MAGI). For most people, it’s the same or very similar to “adjusted gross income” (AGI). MAGI isn’t a number on your tax return.
If your income is between 100%/138% to 250%, you may qualify for additional Cost Saving Reduction credits if you enroll in a Silver Tier plan.
How do I know if my state expanded medicaid?
To date, 39 states (including DC) have adopted the Medicaid expansion and 12 states have not adopted the expansion.
The following states have not adopted a Medicaid expansion: Wyoming, South Dakota, Wisconsin, Kansas, Texas, Tennessee, North Carolina, South Carolina, Georgia, Alabama, Missouri, Florida.
Special notes:
Wisconsin: Although Wisconsin has not expanded Medicaid under the guidelines laid out in the Affordable Care Act (ACA), the state’s Medicaid program (which is called BadgerCare) does cover all legally present residents with incomes under the poverty level. Wisconsin is the only non-Medicaid-expansion state that does not have a coverage gap; all low-income residents either have access to Medicaid or subsidies to help them purchase private coverage in the exchange.
Missouri: Missouri voters approved a ballot measure on August 4, 2020 which adds Medicaid expansion to the state’s constitution. The amendment requires the state to submit all SPAs necessary to implement expansion to CMS no later than March 1, 2021 and for expansion coverage to begin July 1, 2021. Language in the amendment prohibits the imposition of any additional burdens or restrictions on eligibility or enrollment for the expansion population.
Oklahoma: Oklahoma voters approved a ballot measure on June 30, 2020 which adds Medicaid expansion to the state’s Constitution. The amendment requires the Oklahoma Health Care Authority to submit a SPA and other necessary documents to CMS within 90 days of the ballot measure’s approval, and for expansion coverage to begin no later than July 1, 2021. Language in the approved measure prohibits the imposition of any additional burdens or restrictions on eligibility or enrollment for the expansion population.
What happens if I don’t enroll in a plan during open enrollment?
If you don’t enroll in an ACA-compliant health insurance plan by the end of open enrollment (December 15 in most states), your buying options will likely be very limited for the coming year. Open enrollment won’t come around again until November 2021, with coverage effective the first of the following year.
But depending on the circumstances, you might still be able to get coverage after open enrollment ends:
Medicaid and CHIP enrollment are available year-round for those who qualify.
Native Americans can enroll year-round
Special enrollment period if you have a qualifying event
What about the tax penalty?
There is no federal government penalty for being uninsured in 2021
People who are uninsured will not face a penalty, unless they’re in a state that has its own individual mandate and a penalty for non-compliance. Four states and DC impose tax penalties for not having health insurance:
Massachusetts
New Jersey
California
Rhode Island
District of Columbia
Let’s talk about Plan Structures
Metal tiers are a quick way to categorize plans based on what that split is.
Some people get confused because they think metal tiers describe the quality of the plan or the quality of the service they’ll receive, which isn’t true.
Here’s how health insurance plans roughly split the costs, organized by metal tier:
Bronze – 40% consumer / 60% insurer
Silver – 30% consumer / 70% insurer
Gold – 20% consumer / 80% insurer
Platinum – 10% consumer / 90% insurer
The minimum you’ll spend per year is the annual cost of your premiums.
The maximum you’ll spend per year is the sum of the annual premium plus the out of pocket maximum.
If you don’t intend to max out the plan with expected medical costs, you should calculate your estimated costs. This could be the sum of the annual premiums + deductible. If your plan has copays, it would be the sum of the annual premiums + copays on services you know you need.
If your costs won’t meet the deductible, and you’re on an HDHP you can use the following:
PCP visit averages $100 – $200
Specialist visit averages $150 – $300
Psychiatry visit averages $200 – $400
Your first appointment with a provider will be your most expensive one, follow up appointments should be less expensive. You can also try to see a Physician Assistant or a Nurse Practitioner instead of an MD or DO to have a lower cost as well.
What is a deductible?
The amount you pay for covered health care services before your insurance plan starts to pay.
With a $2,000 deductible, for example, you pay the first $2,000 of covered services yourself. After you pay your deductible, you usually pay only a copayment or coinsurance for covered services. Your insurance company pays the rest.
Generally, plans with lower monthly premiums have higher deductibles. Plans with higher monthly premiums usually have lower deductibles.
Coinsurance
The percentage of costs of a covered health care service you pay (20%, for example) after you’ve paid your deductible.
Let’s say your health insurance plan’s allowed amount for an office visit is $100 and your coinsurance is 20%.
If you’ve paid your deductible: You pay 20% of $100, or $20. The insurance company pays the rest.
If you haven’t met your deductible: You pay the full allowed amount, $100.
Copayment
A fixed amount ($20, for example) you pay for a covered health care service after you’ve paid your deductible.
Let’s say your health insurance plan’s allowable cost for a doctor’s office visit is $100. Your copayment for a doctor visit is $20.
If you’ve paid your deductible: You pay $20, usually at the time of the visit.
If you haven’t met your deductible: You pay $100, the full allowable amount for the visit.
Copayments (sometimes called “copays”) can vary for different services within the same plan, like drugs, lab tests, and visits to specialists.
Generally plans with lower monthly premiums have higher copayments. Plans with higher monthly premiums usually have lower copayments.
Out of Pocket Maximum
The most you have to pay for covered services in a plan year. After you spend this amount on deductibles, copayments, and coinsurance for in-network care and services, your health plan pays 100% of the costs of covered benefits.
The out-of-pocket limit doesn’t include:
Your monthly premiums
Anything you spend for services your plan doesn’t cover
Out-of-network care and services
Costs above the allowed amount for a service that a provider may charge
The out-of-pocket limit for Marketplace plans varies, but can’t go over a set amount each year.
For the 2021 plan year: The out-of-pocket limit for a Marketplace plan can’t be more than $8,550 for an individual and $17,100 for a family.
How to Pay for Your Deductible
HSA FSA HRA
TBD Coming soon!
Short Term Health Plans
Under general federal rules, short-term health insurance plans can have initial terms of up to 364 days and a total duration of up to 36 months, including renewals. But the majority of the states placed more restrictive limits on the availability of short-term plans, and those state limits supersede the new federal rules.
As it stands now, several states limit short-term plans to six months or less:
Delaware limits plans to three months
District of Columbia (three months, no renewals)
Illinois
Louisiana (limited to six months only if the insurer looks back more than 12 months to determine pre-existing conditions)
Maryland enacted legislation in 2018 to limit STLDI plans to three months
Michigan (185 days)
Minnesota (185 days; legislation to extend this failed in 2018)
Missouri (legislation to extend short-term plans failed in 2018)
Nevada (185 days)
New Hampshire
North Dakota (185 days)
Oregon (90 days)
South Dakota (policies lasting longer than six months are required to be guaranteed renewable, which effectively limits the short-term market to plans with durations of six months or less)
Vermont (three months)
Washington limits short-term plans to three months
A handful of states allow short-term plans to have initial terms in line with the new federal rules (ie, up to 364 days, or close to it), but place more restrictive limits on renewals and total plan duration:
Idaho (renewals required if the plan is an “enhanced” short-term plan; non-enhanced short-term plans are limited to six months)
Kansas (only one renewal permitted)
Ohio (renewals not permitted)
South Carolina (11-month maximum initial term, and 33-month maximum duration)
Utah (363-day maximum initial term, and renewals are not permitted)
Wisconsin (total duration limited to 18 months)
Eleven states have no short-term plans available. In some cases, this is because they ban them outright, in other cases because they have regulations that make those plans unappealing for insurers:
California
Colorado (plans are technically allowed, but with significant restrictions; the state’s remaining short-term insurers stopped offering plans as of 2019)
Connecticut
Hawaii limits plans to three months, but no insurers offer plans now that the state’s new rules are in effect.
Maine (new rules took effect in 2020, and no insurers have filed 2020 plans under the new rules.)
New York
New Jersey
Massachusetts
New Mexico (state regulations limit the plans to three months and prohibit renewals, but no insurers are offering plans as of mid-2019)
Rhode Island
