Frequently Asked Questions

What are the different types of health insurance?

There are different types of health insurance plans that meet different needs. Some examples include HMO, EPO, PPO, and POS plans. Different plan types provide different levels of coverage for care you get inside and outside of the plan’s network of doctors, hospitals, pharmacies, and other medical service providers.

What's the difference between a deductible, a copayment and coinsurance?

All three are medical charges you must pay out of your own pocket, even if you have insurance. Your deductible is the initial amount you must pay each year for covered health services before your insurer will start to chip in. Plans may have separate individual and family deductibles and/or deductibles for separate services such as hospitalization. A copayment is a fixed amount you pay toward each medical service, such as $25 for a checkup. Coinsurance is a fixed percentage, rather than a flat amount, that you pay toward each service.

What is the Affordable Care Act, and why do we need it?

The Patient Protection and Affordable Care Act, commonly known as Obamacare, was signed into law by President Barack Obama on March 23, 2010. It includes a broad range of reforms designed to make health insurance better and more affordable, rein in health costs and expand coverage among America’s nearly 50 million uninsured. The act requires most Americans to have health insurance or face a penalty. It also makes it illegal for insurers to set dollar limits on coverage, drop you if you get sick or charge more or deny coverage because of a pre-existing condition.

Do I really have to buy health insurance?

The Affordable Care Act’s “individual mandate” requires all Americans, with a few exceptions, to have health insurance that typically offers “minimum essential coverage.” Going without insurance could bring a tax penalty. For 2014, that penalty is 1 percent of your annual income or $95, whichever is higher, and $47.50 for each uninsured child, to a family cap of $285. The penalty increases to the greater of 2.5 percent of income or $695 per person by 2016. The penalty will show up as an additional tax or a reduction in your federal tax refund.

I can't afford to buy health insurance. What should I do?

Depending on your income, you may be eligible for lower-cost, subsidized coverage purchased through Obamacare’s state health insurance exchanges. Or, you may qualify for free or low-cost coverage through Medicaid or the Children’s Health Insurance Program, aka CHIP.

How do I qualify for an Obamacare subsidy to cut health insurance costs?

If you earn between $11,500 and $46,000 per year for a single person or $23,550 and $94,200 for a family of four and do not have affordable employer-sponsored coverage, you could receive an “advance premium tax credit” to help with the cost of insurance purchased through your state’s exchange, or marketplace. A premium discount is deducted from your federal income tax, and you decide how much to put toward your insurance payment each month. You also may qualify for help with out-of-pocket health care costs, if you earn less than $28,725 as a single person or $58,875 for a family of four.

What is the health insurance marketplace?

All health plans purchased through the marketplace (sometimes called an exchange) will qualify as minimum essential coverage (meaning you won’t have to pay the fee for not having insurance). You can also find out if you qualify for Medicaid, CHIP or Medicare through your State’s marketplace.

I notice Marketplace plans are labeled Bronze, Silver, Gold, and Platinum. What does that mean?

Plans in the Marketplace are separated into categories — Bronze, Silver, Gold, or Platinum — based on the amount of cost sharing they require. Cost sharing refers to health plan deductibles, co-pays and co-insurance. For most covered services, you will have to pay (or share) some of the cost, at least until you reach the annual out of pocket limit on cost sharing. The exception is for preventive health services, which health plans must cover entirely.

In the Marketplace, Bronze plans will have the highest deductibles and other cost sharing. Silver plans will require somewhat lower cost sharing. Gold plans will have even lower cost sharing. And Platinum plans will have the lowest deductibles, co-pays and other cost sharing. In general, plans with lower cost sharing will have higher premiums, and vice versa.

What is the Cadillac tax?

The so-called Cadillac tax is an excise tax on high cost health plans offered by employers. Beginning in 2018, health plans that cost more than $10,200 for an individual or $27,500 for a family plan will be subject to the tax, which is 40% of the amount that exceeds those thresholds. For example, if a family plan costs $30,000, the employer that offers the plan would owe 40% of $2,500 ($30,000 minus $27,500), or $1,000 for each family it covers under that plan.

The tax was intended to be a disincentive for employers to provide overly rich health benefits, and the cost of the health plan is one measure of the level of benefits. However, some plans may cost more because they cover people with higher-than-average health care costs, including retirees, older workers and workers in high-risk occupations. The cost thresholds for plans that cover a significant number of individuals in any of those categories are higher.

Who is exempt from paying the penalty for not having health insurance?

The law excuses certain individuals from the penalty, including members of religious sects that have religious objections to health insurance, participants in health care sharing ministries, and those who are uninsured for less than three months of the year. You also could be exempt if your income is too low to require a federal tax return, you can’t reasonably afford coverage, or you would have qualified for Medicaid had your state elected to expand the program as provided for under the Affordable Care Act.

I've had the same policy for years. Does health care reform affect my plan?

Some provisions of the Affordable Care Act do not apply to so-called grandfathered plans written before the law took effect. These include the freedom to choose your own doctor, preventive services at no additional cost, and the right to appeal if your insurer denies a claim. However, as with new policies, grandfathered plans are required to cover children up to age 26, provide a simple summary of coverage and costs, and cease any lifetime limits on benefits.

How can I be sure that my current coverage will allow me to avoid the Affordable Care Act penalty?

You’re OK if you are currently insured through: an individual or group plan (grandfathered or not); a veterans health care program, including Tricare; Medicare; Medicaid; the Children’s Health Insurance Program, or CHIP; Peace Corps volunteer plans; or COBRA continuation coverage for the unemployed.

I have COBRA and it’s too expensive. Can I drop it during Open Enrollment and enroll in a Marketplace plan instead?

During Open Enrollment, you can sign up for a Marketplace plan even if you already have COBRA. You will have to drop your COBRA coverage effective on the date your new Marketplace plan coverage begins. After Open Enrollment ends, however, if you voluntarily drop your COBRA coverage or stop paying premiums, you will not be eligible for a special enrollment opportunity and will have to wait until the next Open Enrollment period. Only exhaustion of your COBRA coverage triggers a special enrollment opportunity.

I’m leaving my job and will be eligible for COBRA. Can I shop for coverage and subsidies on the Marketplace instead?

Yes, leaving your job and losing eligibility for job-based health coverage will trigger a special enrollment opportunity that lasts for 60 days. You can apply for Marketplace health plans and (depending on your income) for premium tax credits and cost sharing reductions during that period. If you enroll in COBRA coverage through your former employer, however, you will need to wait to the next Marketplace Open Enrollment period if you want to switch to a Marketplace plan.