Under the Affordable Care Act passed in 2010, nearly every American citizen must hold qualifying health insurance or face a penalty at tax time. In order for a plan to be approved under Obamacare, it must meet several “minimum essential coverage” regulations.
If you have insurance through your job or use government or private coverage, you most likely meet the minimum essential coverage standards already. If you’ve been allowed to keep the same insurance you had before the passage of the Affordable Care Act, you’re probably also in the clear. When filing your federal income taxes, you must state how many months of the year you and any of your dependents have been with or without minimum essential coverage. Common plans that are acceptable for minimum essential coverage include:
- Any “grandfathered” plan that you’ve had since before March 23, 2010
- Medicare Part A and C (part B by itself isn’t enough)
- The Children’s Health Insurance Program (CHIP)
- Coverage provided to Peace Corps volunteers
- TRICARE plans (United States Military insurance)
- Certain plans provided by the Department of Veterans Affairs
- Most student health plans
- Most Medicaid plans (except limited coverage plans)
- Any plan that you get from your employer
- COBRA coverage
- Retirement plans provided by a previous employer
Some plans not listed above are still acceptable under the Affordable Care Act. In fact, you’ll notice that private coverage — plans you buy outside of a job and pay for yourself — isn’t on the list, but many private insurance plans are also considered minimum essential coverage under the law.
To qualify as ACA-compliant, which is a term used to describe plans that meet the law’s requirements, a current health insurance plan must meet specific guidelines put in place by the law. Here are a few requirements under Obamacare:
All major medical plans sold today must cover certain essential health benefits. These include outpatient care; maternity before, during and after labor; hospitalization; rehabilitation services and equipment; laboratory testing; preventive and wellness screenings; mental health services; prescription drugs; emergency care; and pediatric care, including dental and vision. The degree to which insurers have to cover these services varies, but preventive care is now included at no added out-of-pocket cost, meaning yearly checkups shouldn’t cost you anything.
Premiums for ACA-compliant plans must be reasonable. In addition, copays and other out-of-pocket expenses must have a maximum. That means individuals will be capped on what they have to pay out of pocket for covered medical care in a year.
The plan must cover at least about 60 percent of healthcare-related costs, leaving about 40 percent of the cost (in out-of-pocket expenses) up to the plan holder. There are four metal tiers under Obamacare, ranging from bronze to platinum. Bronze plans have low premiums and high deductibles while platinum plans include high premiums and lower out-of-pocket costs. ACA-compliant plans must also guarantee coverage for all persons regardless of pre-existing condition. Inability to pay is the only reason to be denied coverage.
Plans must also be renewable for every person no matter the health status of the applicant or whether it’s changed since the previous year.
If an insurance carrier fails to spend at least 80 percent (85 percent for the large group market) of the money they make from premiums on consumer services, they must rebate those individuals a portion of their premiums.
What Plans Aren’t Accepted?
Some types of health insurance are great as supplemental coverage to major medical plans but don’t meet the minimum essential requirements to exempt you from a fee. These include worker’s compensation insurance, Medicare part B by itself, standalone dental and vision coverage, coverage only for a specific disease or disability, short term insurance plans, and disability or accident insurance.
How to Get Coverage
Under the Affordable Care Act, there are several methods you can utilize to acquire insurance. You can:
- Use an agent or insurance broker who can introduce you to plan options
- buy a plan directly from an insurance company through a private market
- Use an online marketplace or buy a plan directly from the Obamacare website at HealthCaregov.
Each year, there are specific enrollment dates for signing up for an ACA-compliant health plan. For coverage starting next year (2018), enrollment runs from November 1 through December 15.
Though these are the standard dates for individuals to choose a healthcare plan, you may be able to apply outside of the open enrollment period based on your circumstances. Certain life events may qualify you for special enrollment dates, such as marriage, birth or adoption of a baby, change of address, turning 26 (being removed from your parents’ plan), leaving incarceration, becoming a U.S. citizen, death of someone on your plan, or a legal separation or divorce. You may also qualify for special enrollment if you lose insurance coverage due to any number of events.
If you have coverage through your job, you’ll have a different enrollment period depending on your company. The above dates and restrictions are for people buying private health insurance on or off the Obamacare marketplace. Note, too, that Medicaid and CHIP (Children’s Health Insurance Program) don’t have enrollment dates. If you qualify for these programs, you can apply any time of the year.