2016 Open Enrollment begins November 15, 2015.

ACA FAQ

TIP: Use an insurance agent to enroll. It will save you time – and costs you nothing!

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No. By law, you are charged exactly the same price whether you use an agent or handle the process yourself on Healthcare.gov.  There are differences, though.

By using an agent, you will work with one experienced professional throughout the entire process. You can ask questions and get additional information for free, any time you like. In addition, insurance agents can help you with supplemental plans that you may not be aware of, but which could make a real difference to you depending on your needs and budget.

Alternatively, you can visit Healthcare.gov and purchase a health insurance policy on your own. You may also call the Healthcare.gov 800 number to get many of your questions answered. However, you may wait in long telephone queues for a long time, and you will probably speak to a different person every time you call. In addition, Healthcare.gov consultants cannot help you with supplemental health insurance nor handle certain unique insurance needs.

The short answer:

There Is No Such Thing as Free Health Insurance In America

When Congress passed the Affordable Care Act, they set out to accomplish two goals:

  1. create a minimum standard of health insurance throughout the country
  2. provide access to affordable (but not free) health insurance to the millions of Americans who did not have it at that time.

They accomplished this by adding regulations to the industry and by setting up a government-run Healthcare.gov purchasing website where any American can purchase health insurance. But Congress left the purchase of insurance between you and a private insurance company.

Insurance premiums are now based on your income, age, zip code, and smoking status.

You May Be Eligible for a Subsidy or Tax Credit, However

Your income determines if you qualify for a premium tax credit or subsidy from the government, which could reduce your monthly premium.

After applying their subsidies and/or tax credits, some Americans end up paying very little for health insurance ($100 a month or so). Generally speaking, though, health insurance is not free.

Why it is so important to have health insurance

No one plans to get sick or hurt, but most people need medical care at some point. Health insurance covers these costs and protects you from very high expenses.

Health coverage when you need care

Health insurance is a contract between you and your insurance company. You buy a plan, and the company agrees to pay part of your medical costs when you get sick or hurt. There are other important benefits of health insurance. Plans available in the Marketplace (and most other plans) provide free preventive care, like vaccines, screenings, and check-ups. They also cover some costs for prescription drugs.

Health insurance protects you from high, unexpected costs

Did you know the average cost of a 3-day hospital stay is $30,000? Or that fixing a broken leg can cost up to $7500? Having health coverage can help protect you from high, unexpected costs like these.

How health insurance coverage works

When you have insurance, you pay some costs and your insurance plan pays some others. Here are some of the ways that the payments break down:

  • Premium A premium is a fixed amount you pay to your insurance plan, usually every month. You pay this even if you do not use medical care that month.
  • Deductible If you need medical care, a deductible is the amount you pay for care before the insurance company starts to pay its share. Once you meet your deductible, your insurance company begins to cover some costs of your care. Some plans have lower deductibles, like $250. Some have higher deductibles, like $2000. Many plans provide preventive services, and sometimes other care, before you have met your deductible.
  • Copayment A copayment is a fixed amount you will pay for a medical service after you have met your deductible. For example, after meeting your deductible you may pay $25 for a visit to the doctor office that would cost $150 if you did not have coverage. The health plan pays the rest.
  • Coinsurance Coinsurance is similar to copayment, except it is a percentage of costs you pay. For instance, you may pay 20% of the cost of a $100 medical bill. So you would pay $20 and the health plan would pay the rest.

How insurance protects you

Insurance coverage protects you from high medical costs 2 ways:

  • Out-of-pocket maximum This is the total amount you will have to pay if you get sick. For example, if your plan has a $3000 out-of-pocket maximum, once you pay $3000 in deductibles, coinsurance, and copayments the plan will pay for any covered care above that amount for the rest of the year.
  • No yearly or lifetime limits Health plans in the Marketplace cannot put dollar limits on how much they will spend each year or over your lifetime to cover essential health benefits. After you have reached your out-of-pocket maximum, your insurance company must pay for all of your covered medical care with no limit.

People without health coverage are exposed to these costs. This can sometimes lead people without coverage into deep debt or even into bankruptcy.

Different types of health insurance plans meet different needs. Under the Affordable Care Act, the four basic types of insurance available haven not changed. That said, the costs, coverage options and eligibility rules have changed quite a bit. When you compare options, it is important to understand how health insurance plans are structured and how they have changed due to the ACA.

Health Maintenance Organizations (HMOs) and Exclusive Provider Organizations (EPOs)

HMOs and EPOs may limit coverage to providers inside their networks. A network is a list of doctors, hospitals, and other health care providers that provide medical care to members of a specific health plan. If you use a doctor or facility that is not in the HMO network, you may have to pay the full cost of the services provided. HMO members usually have a primary care doctor and must get referrals to see specialists. This is generally not true for EPOs.

Preferred Provider Organizations (PPOs) and Point-of-Service plans (POS)

These insurance plans give you a choice of getting care within or outside of a provider network. With PPO or POS plans, you may use out-of-network providers and facilities, but you will have to pay more than if you use in-network ones. If you have a PPO plan, you can visit any doctor without a referral. If you have a POS plan, you can visit any in-network provider without a referral, but you will need one to visit a provider out-of-network.

High Deductible Health Plan (HDHP)

High Deductible Health Plans typically feature lower premiums and higher deductibles than traditional insurance plans. As of 2013, HDHPs are plans with a minimum deductible of $1250 per year for individual coverage and $2500 for family coverage. If you have an HDHP, you can use a health savings account or a health reimbursement arrangement to pay for qualified out-of-pocket medical costs. This can lower the amount of federal tax you owe.

Catastrophic Health Insurance Plan

A catastrophic health insurance plan covers essential health benefits but has a very high deductible. This means it provides a kind of #8220;safety net" coverage in case you have an accident or serious illness.

Catastrophic plans usually do not provide coverage for services like prescription drugs or shots.

Premiums for catastrophic plans may be lower than traditional health insurance plans, but deductibles are usually much higher. This means you must pay thousands of dollars out-of-pocket before full coverage kicks in.

In the Healthcare.gov Marketplace, catastrophic plans are available only to people under 30 and to some low-income people who are exempt from paying the fee because other insurance is considered unaffordable or because they have received #8220;hardship exemptions".

Marketplace catastrophic plans cover 3 annual primary care visits and preventive services at no cost. After the deductible is met, they cover the same set of essential health benefits that other Marketplace plans offer. People with catastrophic plans are not eligible for lower costs on their monthly premiums or out-of-pocket costs.

The four levels of health plans – Bronze, Silver, Gold and Platinum – are priced based on the average percentage of health care expenses that will be paid by the plan.

The more the plan will pay towards your health care expenses, the lower your out-of-pocket costs will be for things such as:

  • Deductibles – the amount you owe for covered services before insurance kicks in;
  • Copayments – a fixed amount you pay for a covered health care service; and
  • Coinsurance – your share of the costs of a covered health care service.

The downside to higher-payout plans is that you will pay a higher premium each month.

Here are the four plan tiers available today:

  • Bronze plans are the lowest payout plans. They cover roughly 60% of your covered medical expenses. You will be responsible for paying the remaining 40%.
  • Silver plans pay 70% of your costs.
  • Gold plans pay 80% of your expenses.
  • The highest payout plans, Platinum, pay a whopping 90% of health care expenses covered by the plan.

In addition to selecting a plan tier, you may also select the amount of deductible and coinsurance for your plan. Your share of costs might come in the form of a large deductible with low coinsurance once you have met your deductible. Another plan might offer a low deductible with higher coinsurance.

For example, Silver Plan A (which pays 70% of your health care expenses) offers a high $2,000 deductible and a low 15% coinsurance. Silver Plan B, on the other hand, has a low $250 deductible but a higher 30% coinsurance.

There are two types of government reimbursements available to help you offset some of the costs of your health insurance: Cost-Sharing Reduction Subsidies, and Advanced Premium Tax Credits.

Cost-Sharing Reduction Subsidies

If your income falls between 100 and 250% of the federal poverty level ($11,490 to $28,725 for an individual), you may be eligible for a Cost-Sharing Reduction subsidy, which can help lower your deductibles, co-payments and co-insurance. In order to receive Cost-Sharing Reductions, you must purchase a Silver plan on the Marketplace. You will still have a variety of plans from which to choose, but it must be Silver to be able to take advantage of the Cost-Sharing Reduction subsidy.

Advanced Premium Tax Credits

Many people will qualify for Advanced Premium Tax Credits, a type of subsidy that lowers your monthly premium. You may be eligible for this if your income falls between 100 and 400% of the federal poverty level ($11,490 to $45,960 for an individual).

NOTE: Cost-Sharing Reduction Subsidies and Advanced Premium Tax Credits are not automatic: you must apply for them on the Health Insurance Marketplace, Healthcare.gov. A licensed Florida insurance agent can help you do this.

Yes, if you recently used tobacco products, your insurance cost will be higher. The government classifies tobacco use risk into five categories (see table below) for pricing purposes. The longer it has been since you last used tobacco products, the cheaper your coverage will be.

Smoking Status
Never
6 months or less
7-12 months
13-36 months
37+ months

#8220;Tobacco Use" is defined as consumption of tobacco products including cigarettes, cigars, pipes, snuff, chewing or dipping tobacco #8211; at least 4 times per week. If you have used tobacco products during the past 6 months, you are considered an active tobacco user.

The ACA standardized the minimum level of insurance available to everyone in the country, but it did not significantly reduce the amount of insurance plan choices available to you.

Today, insurance companies still offer many different policies to fit any monthly budget and unique requirements. For example, Florida Blue sells 40 different health plans today.

One of the biggest reasons for choice is cost. Some policies offer very low deductibles and high co-payments. These policies are designed to limit your out of pocket expense for health care, but they carry a higher monthly premium.

On the other end of the spectrum are policies with high deductibles and low co-payments. These require more money out of pocket from you when you are sick or injured, but your monthly premium is much lower.

Your choice of health care network will also impact your costs and the plan you select. A large national network with lots of doctors will cost you more than a local or regional network with fewer choices of doctors and hospitals.

Because Individual Health plans only cover the costs of your health care, some consumers also purchase Supplemental Insurance to maintain a cash income while they are injured and cannot work.

Your options depend upon the number of employees you need to cover.

Small Group Plans (1-50 employees)

All small group plans for 2016 include the 10 essential health benefits required by health care reform. Options include level of coverage, the provider network, and how costs are shared between the plan members and the health plan.

To purchase group policies for your employees, you can contact a licensed health insurance agent. Alternatively, Healthcare.gov offers a Small Business Health Options Program (SHOP) Marketplace for employers with 50 or fewer full-time equivalent employees (FTEs).

A full time equivalent is not the same as an employee. For example, two half-time employees equals one FTE for the purposes of pricing health insurance.

Large Group Plans (51+ employees)

Large group plans offer more copayment, deductible and coinsurance options. The only way to purchase large group insurance is to contact a licensed health insurance agency in your state.

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There are two basic kinds of life insurance: whole life and term.

Whole-life

Whole life is a type of permanent insurance that combines life coverage with an investment fund. Here, you are buying a policy that pays a stated, fixed amount on your death, and part of your premium goes toward building cash value from investments made by the insurance company. Cash value builds tax-deferred each year that you keep the policy, and you can borrow against the cash accumulation fund without being taxed. The amount you pay usually does not change throughout the life of the policy.

There are two types of whole-life policies:

1. Universal life Universal life is a type of permanent insurance policy that combines term insurance with a money market-type investment that pays a market rate of return. To get a higher return, these policies generally do not guarantee a certain rate.

2. Variable life Variable life insurance plans are permanent policies with an investment fund tied to a stock or bond mutual-fund investment. Returns are not guaranteed.

Term Life Insurance

The other kind of life insurance coverage, term, has no investment component. You are buying coverage that lasts for a set period of time provided you pay the monthly premium.

Annual-renewable term is purchased year-by-year, although you do not have to re-qualify by showing evidence of good health each year. When you are young, premiums for annual-renewable term insurance are dirt cheap #8211; as low as a few hundred dollars per year for $250,000 worth of coverage. As you get older, term premiums steadily increase.

Level-premium term has somewhat higher #8211; but fixed #8211; premiums for longer periods, anywhere from five to 30 years.

As the name implies, Supplemental Insurance compliments your normal insurance policies by covering you for expenses that normal insurance plans do not typically cover.  For example, most Health Insurance policies cover your health care expenses, but they do not reimburse you for lost income caused by your injury or time away from work. You would purchase a Supplemental Income insurance plan to do that.

There are six common types of Supplemental Insurance policies sold in the Florida today. They include: Medigap, Dental, Vision, Critical Illness, Accidental Death and Dismemberment, and Hospital Indemnity.

The six common types of Supplemental Insurance policies sold in Florida include:

  • Medigap (Medicare Supplemental Insurance #8211; Parts C, D, E, F)
  • Vision
  • Dental
  • Critical Illness
  • Accidental Death and Dismemberment
  • Hospital Indemnity.

Medicare Supplemental Insurance (Medigap)

One of the most common types of supplemental insurance is called Medigap.  It is sold by private insurance companies and their licensed agents to Floridians enrolled in Medicare. You have to pay the premiums for your Medigap policy #8211; Medicare does not reimburse you for that.

Original Medicare, which includes Part A (Hospital) Insurance and Part B (Medical) Insurance, pays for many health-related services and medical supplies #8211; but it does not cover everything.

You can purchase a Medicare Supplemental Insurance policy to pay for coverage gaps that are not paid for by Medicare such as co-payments, co-insurance and deductibles. Together, these can add up to very large out-of-pocket expense, especially if you are hospitalized or need skilled nursing services.

Some Medicare Supplemental policies will also pay for health services outside the United States and will cover preventive services not covered by Medicare.

If you are in Original Medicare (Parts A and B) and have a Medigap policy, Medicare first pays its share of the Medicare-approved amounts for your covered health care costs, then your Medigap policy pays its share.

The best time to buy a Medigap policy is during your 6-month Medigap open enrollment period, because you can buy any Medigap policy sold in your state even if you have health problems. This period automatically starts the month you are 65 and enrolled in Medicare Part B, and once it is over, you cannot get this guarantee of acceptance again.

Other Types of Supplemental Insurance

Aside from Medigap policies, there are three other types of supplemental health insurance that can be bought in Florida. These supplemental policies may be available through your employer or you may purchase them directly from a licensed Florida health insurance agent.

Vision Insurance

Vision insurance covers expenses related to normal eye protection and health including optometrist visits, choice of eyewear, some elective surgical procedures and more. Vision policies are relatively inexpensive in Florida.

Dental Insurance

Many dental expenses are not covered by normal health insurance policies (nor by Medicare). Dental Insurance fills the gap and pays for things like cleaning visits, cosmetic procedures such as caps and teeth whitening and more. Dental plans are also relatively inexpensive to purchase.

Critical Illness Insurance

Critical illness insurance, also known as disease-specific insurance, is meant to ease the financial burden of a serious illness such as cancer or a stroke.

Critical illness policies provide a lump-sum cash benefit to pay for additional costs that are related to an illness but are not covered by your health plan or disability plan.

Depending on the policy, the coverage may be used to pay for:

  • deductibles
  • out-of-network specialists
  • travel and lodging
  • experimental treatments
  • child care
  • in-home assistance
  • living expenses including your automobiles, utilities and food

Accidental Death Insurance

There are two kinds of accident policies: Accidental Death and Dismemberment Insurance (ADD) and Accident Health Insurance. These two plans are often combined and sold together. It is important to speak with a licensed Florida insurance agent because plans, policies and coverage options vary by state.

An accidental death and dismemberment policy pays a lump-sum cash benefit if you are the named beneficiary of someone who dies in an accident. It may also pay a smaller amount if the person did not die but lost a limb, eyesight, or suffered paralysis. ADD insurance does not pay for deaths related to illness, suicide, or natural causes.

Accident health insurance, sometimes called a “accident hospital indemnity” policy, pays for medical costs resulting from an accident that are not covered by your regular health insurance. These policies often also cover the costs of extended home care service and travel and lodging expenses for family members.

Hospital Indemnity Insurance

Hospital Indemnity Insurance, also known as “Hospital Confinement” insurance, provides a cash benefit if you are confined to a hospital due to an illness or serious injury. The cash benefit is paid out in one lump sum or as a periodic payment. Payout may not begin until after a waiting period. Similar to other types of supplemental insurance, the additional coverage is meant to help you pay for services and items not covered by your regular health plan.

The short answer is:

There Is No Such Thing as FREE Health Insurance In America

When Congress passed the Affordable Care Act, they set out to accomplish two goals:

  1. create a minimum standard of health insurance throughout the country
  2. provide access to affordable (but not free) health insurance to the millions of Americans who did not have it at that time.

Congress accomplished this by adding regulations to the industry and by setting up a government-run Healthcare.gov purchasing website where any American can purchase health insurance.

But Congress left the purchase of insurance between you and a private insurance company.

Insurance premiums are now based on your income, age, zip code, and smoking status.

You May Be Eligible for a Subsidy or Tax Credit

Your income determines if you qualify for a premium tax credit or subsidy from the government, which could reduce your monthly premium.

After applying their subsidies and/or tax credits, some Americans end up paying very little for health insurance ($100 a month or so). Generally speaking, though, health insurance is not free.

Open Enrollment for 2016 coverage

Your next chance to enroll in health coverage is during the next Open Enrollment period. The Open Enrollment period for 2016 coverage is November 15, 2015 to January 31, 2016. Coverage can start as soon as January 1, 2016. Sign up for email updates to get important information and reminders to help you get ready for the next Open Enrollment period.

Your options after March 31, 2016

Open Enrollment for 2015 coverage is over. But you may still have options to get health coverage if you meet any of the following situations:

You may qualify for a Special Enrollment Period that allows you to buy a private health plan through the Marketplace.

You may qualify for Medicaid and the Childrens Health Insurance Program (CHIP). You can do this any time, all year. If you qualify you can enroll immediately. Use the Healthcare.gov screener to find out if you qualify to get coverage outside Open Enrollment.

Small businesses can apply for SHOP coverage at any time, all year.

Members of federally recognized tribes and Alaska Native shareholders can enroll in Marketplace coverage any time of the year.

There is no limited enrollment period for any of the groups above, and they can change plans as often as once a month. If none of these situations match you, then the next Open Enrollment period for 2017 coverage begins on November 15, 2016. Important: If you do not have minimum essential coverage, you must either pay a fee or have an exemption from paying the fee.

The Ten Essential Health Benefits All Americans Receive

The Affordable Care Act raised the minimum amount of insurance coverage provided to all Americans, and standardized some aspects of their costs.

The following ten essential health benefits must be offered by every health insurance plan sold through Healthcare.gov or a state-sponsored Insurance Marketplace:

  1. Outpatient care—the kind you get without being admitted to a hospital
  2. Trips to the emergency room
  3. Treatment in the hospital for inpatient care
  4. Care before and after your baby is born
  5. Mental health and substance use disorder services: This includes behavioral health treatment, counseling, and psychotherapy
  6. Your prescription drugs
  7. Services and devices to help you recover if you are injured, or have a disability or chronic condition. This includes physical and occupational therapy, speech-language pathology, psychiatric rehabilitation, and more.
  8. Your lab tests
  9. Preventive services including counseling, screenings, and vaccines to keep you healthy and care for managing a chronic disease.
  10. Pediatric services: This includes dental care and vision care for kids

In the state of Florida, they are the same thing.

Healthcare.gov is the national website where you go to find out where you can apply for a premium tax credit or a federal subsidy. Because the state of Florida does not have their own state website, all Florida citizens use Healthcare.gov to apply for premium tax credits or subsidies.

A licensed Florida insurance agent can do a quick estimate for you, to see if you may qualify for a subsidy. Generally speaking, agents will help you in less time than it takes to do it yourself.

The Affordable Care Act requires all Americans to purchase health insurance policies for themselves and their dependents. If you do not, then you will need to pay the IRS a penalty.

How Much Is the Penalty?

The exact amount of the tax penalty is based on household income above the level at which an uninsured individual is required to file a tax return#8211;currently $9,500 per person and $19,000 per couple. This penalty is scheduled to be phased in over the next several years as follows:

  • for 2014, the penalty is the greater of $95 or 1% of income
  • for 2015, the greater of $325 or 2% of income
  • for 2016, the greater of $695 or 2.5% of income, and
  • the $695 amount is indexed for inflation after 2016.

The penalty for children is half the amount for adults and an overall cap will apply to family payments. This cap will be three times the amount of the per-person penalty, regardless of how many people are in the family. Thus, the cap is $285 in 2014 but rises to $2,085 in 2016, after which point it is indexed to inflation. Moreover, the total penalty can never be more than the cost of a minimal #8220;bronze" heath insurance plan that can be purchased through a state health insurance exchange. The CBO estimates that these policies will cost $4,500-$5,000 per person and $12,000-$12,500 per family in 2015, with the costs rising thereafter.

All in all, for most people the penalty will be less than the cost of obtaining health insurance.

The Congressional Budget Offices says that of the 30 million non-elderly Americans it estimates will not have health insurance in 2016, only about six million will be subject to the tax. The remainder will be exempt because their income is too low or they qualify for another exemption.

How Will the IRS Collect the Penalty?

Taxpayers subject to the penalty are supposed to report the amount due on their tax returns and pay it along with their income taxes. What happens if they do not? Not nearly as much as when they do not pay their regular taxes.

The law greatly limits how the IRS can collect the penalty. It cannot use liens or levies to collect it and taxpayers are not subject to criminal prosecution or any additional penalty if they do not pay. Moreover, the IRS says that its revenue agents will not be involved in enforcing the penalty#8211;that is, they will not ask you about it during an audit. All enforcement will be done through automatic assessments and computer-generated correspondence.

The only power the IRS will have to collect the penalty is to withhold it from an uninsured taxpayer tax refund. Currently, most taxpayers get refunds because they have too much tax withheld during the year. This year 77% of taxpayers received an average refund of $2,707. However, one easy way an uninsured person can avoid paying the penalty is to make sure enough tax is withheld during the year that he or she will have little or no refund. As a result, some experts predict that the IRS will be unable to effectively enforce the penalty tax. Only time will tell.