Open Enrollment for the Health Insurance Marketplace Begins November 15

Open Enrollment for the Health Insurance Marketplace Begins November 15
Eileen St. Pierre, The Everyday Financial Planner

Happy-first-birthdayThe Health Insurance Marketplace is now a year old. Open enrollment for those needing an individual health insurance policy for 2015 begins November 15. If you want your coverage to start on January 1, then you need to make your selections by December 15. Like last year, you can sign up at www.healthcare.gov (hopefully the website will work better this time around) or by calling the Marketplace Call Center at 1-800-318-2596.

Automatic Re-Enrollment

For those of you who signed up for an individual policy on the Marketplace last year, you will be automatically re-enrolled in the policy if your insurance company is still offering the plan, and your income and household size have not changed. So if you are happy with your coverage, you don’t have to do anything.

  • If the plan is no longer offered, you are supposed to be automatically enrolled in a similar plan. However, if this happens to you, it’s a good idea to look at your new options and make your own decision for next year.
  • Remember that your coverage is based on where you live, not where you work.
  • You should always report changes in income and household size to the Marketplace right away.

Recalculate Your Tax Credit

All of the confusion surrounding open enrollment is going to focus on the advanced premium tax credits. First of all, the fate of these tax credits could be decided by November mid-term elections or the Supreme Court (see my column T means Tax Subsidies for Obamacare Up in the Air). For now, let’s assume these tax credits will be available to offset premiums in 2015.

  • The rules governing how the tax credits will be redetermined for 2015 were just approved in early September 2014. [Side note: Redetermination means the same thing as recalculation. It just sounds a lot more confusing but it’s the term the government will use.]
  • If you currently receive the premium tax credit, you will receive a letter explaining this process. There are three different groups of people who will receive letters.
  • Please read this letter! For some groups, your premium tax credit may end at the end of 2014 if you do not contact the Marketplace and have your tax credit recalculated for next year.
  • For other groups, your premium tax credit will stay the same for next year if you do not contact the Marketplace with updated income information. Even if your income is not expected to change, it’s a good idea to ask the Marketplace to recalculate your tax credit. That’s because it will use updated numbers, which may result in a higher tax credit. But you will not automatically get this if you don’t ask for a redetermination.

Penalty Rises in 2015

If you go without health insurance coverage for more than 90 days, then you will have to pay a penalty – what the federal government calls a shared responsibility fee.

  • In 2014, this fee is the greater of 1% of your annual income or $95 per adult (and $47.50 per child). This fee will be assessed when you file your 2014 tax return. So if you are owed a refund, expect the IRS to deduct the penalty from the refund.
  • In 2015, you will pay the greater of 2% of your income or $325 per adult (and $162.50 per child) if you choose to go without health insurance.

The IRS has not released tax filing forms for 2014 yet. Once it does, we will be able to see how all this will be documented when you go to file your taxes. I’ll do my best to keep you posted.

Visit my Health Care Reform page for more information.