Under the current mandates of the Affordable Care Act, everyone living in the United States must have health insurance that qualifies under the requirements for “minimum essential coverage”. These limitations that law outlines dictate the extent of medical coverage you must maintain in order to remain compliant and avoid paying a fee when it comes time to submit your tax return.
Purchasing adequate health insurance for a family of four doesn’t need to be a challenge, as long as you follow the necessary steps that come with seeking out and applying for a plan either in the Marketplace, with an employer-sponsored insurance, or through government plans. These include almost all forms of Medicaid coverage, Children’s Health Insurance Program (CHIP) coverage, COBRA and coverage provided to retirees, Medicare Part A and Medicare Advantage, health plans under the Veterans Administration (VA), and coverage provided by the Non-Appropriated Fund Health Benefit Program, among other options.
Applying for Coverage
Before you may apply for coverage you confirm that you’re within an Open Enrollment Period when insurers review applications of new enrollees and allow current members to change their existing plans. That period has ended for the year 2016 and the next period for Open Enrollment will begin on November 1, 2016 and your coverage will be valid as soon as January 1, 2017.
If you are trying to get coverage outside of the Open Enrollment Period, then you still have two options. The first is to determine if you are eligible for a Special Enrollment Period which comes from triggering a so-called “qualifying event“. These can include life events like getting married, having a baby, becoming or gaining a dependent, becoming a U.S. citizen, a loss of your current policy through no fault of your own, or if your benefits were reduced on your employer-sponsored coverage.
The second is by qualifying for one of the government-sponsored programs listed above. There is no need to wait for an Open Enrollment Period to apply for coverage. Nevada residents may apply for off-exchange coverage year round with a possible 90-day wait for benefits to kick in.
Anyone looking to apply for coverage has four options. The best and most efficient way is to apply online through the Healthcare.gov website. There you can check to see when enrollment periods have opened, see if you qualify for special enrollment, and begin an application. You can also apply through the mail by filling out an application by downloading it from the website and sending it in.
Insurers will mail back your eligibility results. Applications can also be taken over the phone with a customer representative or in-person at one of the local agents or brokers in your area.
Selecting Your Plan
No matter which of these four application methods you decide to go with, you’ll be able to find the right plan for your family by inputting your information into the website or giving it to the customer representative when you speak to him or her. You will be asked for simple information starting with your name, date of birth, whether or not you’re a smoker, and the zip code in which you reside. For a family of four, the primary applicant will need to add this information for a spouse and their children.
Once all of the pertinent information is received and processed, then you will be given a list of companies and coverage plans. The premiums will likely vary from company to company as deductibles and coverage limits might change from one to the other.
Depending upon when you apply, this may be a short-term coverage option until another Open Enrollment Period makes you eligible to apply for long-term coverage. If you’re within the Open Enrollment or it’s during a Special Enrollment from a qualifying event, then you can select from a range of plans and options available.
When you select the plan that is best suited for your family, you will also have the opportunity to select additional coverage to combine with your plan. These include telemedicine, vision, and dental coverages that could be as little as $6.99 a month in some cases for additional vision coverage and $55.00 a month for dental. Again, these numbers will vary based on your particular information.
If you are not eligible for a Special Enrollment, short-term coverage is the next best option to having insurance without being enrolled in an annual plan. These plans are intended to provide you with coverage for anywhere between one to six months and should only be used to get you to the next Open Enrollment. You may also find a number of states that offer short-term plans for up to 364 days, technically less than a full year so as to still qualify as short-term coverage.
Consequences for a Lack of Health Insurance
If you don’t get the basics of “minimum essential coverage” you can and likely will be subject to penalties. The extent of the penalty you would be liable for would be determined by a number of factors. However, the reasons for having to submit an “individual shared responsibility payment” are simple.
Anyone who has the ability to buy coverage but fails to do so will be responsible for the individual shared responsibility payment for every month that he or she is unable to provide proof of proper minimum essential coverage. Those payments will also apply to any member of the individual’s family, including a spouse and any other dependents, who is also without coverage for any period of time, and the length of time that they are without insurance will likely increase the aggregate amount of the fine.
Fines are expected to be paid when the individual or family submits their federal tax return for the year that they were without coverage. The only way to avoid the fee is by having an exemption from the Affordable Care Act’s requirement for insurance.
The individual shared responsibility payment is factored one of two ways. The first is by calculating 2.5% of the annual household income of the family or by calculating the total annual premium of a Bronze level health plan through the exchange. The second is by applying the penalty amounts that are currently in place for uninsured families.
These amounts are $695 per adult, $347.50 per child under 18 and a maximum penalty of $2,085. The highest of these which apply to your family will be the one you are expected to pay.