Updated: Nov 5, 2018
If you’re like me, you don’t realize what time of the year it is until you are hopelessly hiding candy around the house so that it’s not gone before Halloween. HALLOWEEN. That means that open enrollment is here, and amid the chaos and confusion that is politics, you are probably left with many more questions than answers regarding healthcare – and that’s why I have a job.
Do I have to pay a tax penalty if I’m not enrolled in an Affordable Care Act plan?
One of the biggest topics of conversation for most has been the threat of what many refer to as a ‘tax penalty’ or more officially the ‘individual shared responsibility payment’ that you would owe should you not enroll in an Affordable Care Act plan. But if you live in a state that has not implemented its own penalty – you won’t be subject to paying a penalty. That means you have freedom of choice; and together we can pull from a larger pool of insurance companies to satisfy your health insurance needs.
Right now, there are two realms existing simultaneously in the health insurance world. The first are Affordable Care Act (ACA or “Obamacare”) compliant plans and the second are private companies that offer non ACA (Affordable Care Act) compliant Short Term Medical or Fixed Benefit policies.
The difference between compliance and non-compliance is primarily:
A) Minimum Essential Coverage and
B) Pre-Existing Condition protection and is directly reflected in the cost of your monthly premiums.
Minimum essential coverage means that the insurance policy must cover at least 60% of the cost of covered services to your out of pocket maximum, and the policy must also cover what’s referred to as the 10 essential health benefits.
What are the 10 essential health benefits included in the ACA compliant Minimum Essential coverage?
The 10 essential health benefits include coverage for things like pregnancy, preexisting conditions, mental health & substance use, prescriptions, preventive care (yearly physicals), lab services, hospitalization, ambulatory, emergency services and pediatric services (that include dental & vision for minors).
What this means is that if you apply for an ACA compliant plan, you can’t be denied coverage for anything other than nonpayment of your premiums.
But what if you don’t want to pay for coverage that you don’t need and / or use?
Noncompliant short term and fixed benefit policies on the other hand are offered privately and do not have to offer Minimum Essential Coverage. They are also underwritten policies, which means there are exclusions, and many don’t offer coverage for preexisting ailments. Ultimately, this means that if you qualify you don’t have to pay for services you don’t need. AND you won’t be punished for doing so.
There are pros and cons to anything – but in most places you can save money by working with a broker that can help you navigate the intricacies of the insurance world. Mitigate the chaos and confusion with knowledge and preparation.
We understand that nobody likes an intrusive salesperson – and pride ourselves on free and honest consultations. There is no charge to you, the consumer, for our help.
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