This guide is focused solely on the private insurance reforms of the Affordable Care Act, including the health insurance marketplaces, rating, benefit and cost structures, and premium tax credits. It is intended to supplement the Navigator training available from the U.S. Department of Health and Human Services. It is not intended to be a comprehensive, stand-alone resource for all the reforms of the Affordable Care Act.

This resource is organized into sections that address how individuals may present themselves to Navigators, based on their insurance status and coverage options. It includes questions and answers developed in collaboration with the staff at the Center on Budget and Policy Priorities, the Georgetown University Center for Children and Families, and the Kaiser Family Foundation.

Section 1

Individuals with no coverage

Covers enrollment issues for individuals, beginning with those who do not have coverage or an offer of group coverage

Section 2

Individuals who currently have coverage or an offer of coverage from their employer

Covers enrollment issues for individuals who have coverage or an offer of coverage

Section 3

Coverage for small business employers

Covers enrollment issues for small employers who want to understand and compare their coverage

Section 4

Post enrollment issues

Covers post-enrollment issues, including questions that may arise as individuals use their coverage

While we have made every effort to provide accurate information in this resource guide, navigators should contact their state’s marketplace, Department of Insurance, or Medicaid agency for guidance on specific circumstances. The information has been updated as of September 23, 2016.

Section 1

Section 1 covers enrollment issues for individuals, beginning with those who do not have coverage or an offer of group coverage, i.e., from an employer.

Chapter 1: Individual Responsibility Requirement (Individual Mandate)

Background

Frequently Asked Questions

I’m uninsured. Am I required to get coverage?[1.1.1]

Everyone is required to have health insurance coverage — or more precisely, minimum essential coverage — or else pay a tax penalty, unless they qualify for an exemption. This requirement is called the individual responsibility requirement, or sometimes called the individual mandate. (26 U.S.C. § 5000A (a)).

How do I prove that I had coverage and satisfied the mandate?[1.1.2]

When you file your tax return (most people will do this by April 15) you will have to enter information about your coverage (or your exemption) on the return. You will get a notice (i.e., Form 1095-A, 1095-B or 1095-C) from your insurance provider describing your coverage status during the previous year. If you do not, check with your insurance company, employer’s human resources department, Medicaid or CHIP office. You must file this form with your taxes. (26 U.S.C. § 5000A (b); IRS, Questions & Answers about Health Care Information Forms for Individuals (Forms 1095-A, 1095-B, and 1095-C)).

What’s the penalty if I don’t have coverage?[1.1.3]

The penalty for not having coverage in 2016 is the greater of

  • $695 for each adult and $347.50 for each child, up to $2,085 per family, or
  • 2.5 percent of family income above the federal tax filing threshold, capped at the national average of the lowest cost bronze plan available through the marketplace

In later years, the flat penalty amount of $695 will be multiplied by the cost of living adjustement; the percentage of income will remain the same. (26 U.S.C. § 5000A (c)).

If I owe a penalty, when and how do I have to pay it?[1.1.4]

If you do not maintain minimum essential coverage and you don’t qualify for an exemption, you will need to pay a “shared responsibility payment” to the IRS on your tax return. If you are like most people, you will need to submit your return by April 15. (26 U.S.C. § 5000A (b)).

Are there exemptions to the penalty? What are they?[1.1.5]

Yes. You may be eligible for an exemption if any of the following apply to you:

  • Coverage is considered unaffordable because the cost of an employer-sponsored plan or lowest cost bronze plan through the marketplace is 8.13 percent or more of actual household income (as computed on a tax return) or projected household income; in 2017, that threshold is 8.16 percent of household income
  • Coverage is considered unaffordable because the combined cost of employer-sponsored coverage for two or more family members is 8.13 percent or more of actual household income (8.16 percent in 2017)
  • Are not a U.S. citizen, a U.S. national, or a resident alien lawfully present in the U.S.
  • Are a U.S. citizen or resident living abroad*
  • Had a gap in coverage for less than three consecutive months during the year
  • Participate in a health care sharing ministry or are a member of a recognized religious sect with objections to health insurance
  • Are a member of a federally recognized Indian tribe or eligible for services through an Indian Health Care Provider
  • Are incarcerated
  • Won’t file a tax return because your income is below the tax filing threshold
  • Would qualify for Medicaid, but unable to get coverage only because the state has not expanded the program
  • Are or were a resident of a state that did not expand Medicaid
  • Are engaged in service through the AmeriCorps State and National, VISTA or NCCC program and are covered by short-term duration coverage or self-funded coverage provided under these programs
  • Received pregnancy-only Medicaid coverage, coverage through enrollment of an unborn child in CHIP, or Medicaid medically needy coverage with limited benefits that is not considered minimum essential coverage
  • Experienced a hardship making it difficult to purchase insurance (e.g., homelessness, eviction, foreclosure, death of a close family member, domestic violence, and unpaid medical bills). (26 U.S.C. § 5000A (e)); 79 Fed. Reg. 30240, May 27, 2014; IRS, Individual Shared Responsibility Provision-Exemptions: Claiming or Reporting; CMS, SHO#14-002, Minimum Essential Coverage).

*additional requirements apply

How do I apply for an exemption?[1.1.6]

In general, most exemptions can be claimed when you file your taxes. There are some exemptions, however, that can only be claimed by applying to the marketplace for an exemption certificate. These are: you are a member of a recognzied religious sect objecting to health insurance, you have a "general hardship," your projected income makes coverage unaffordable, you are determined ineligible for Medicaid solely because the state did not expand the program, and you served in the AmeriCorps, VISTA or NCCC programs and had short-term duration coverage or self-funded coverage provided through these programs. The full list of available exemptions and how they can be claimed is available here.

The exemption for those whose gross income falls below the applicable return filing threshold is available automatically, meaning those who are eligible for this exemption do not have to file taxes although they can choose to file a return. If an individual qualifies for this exemption, the exemption applies to the individual’s spouse and anyone the individual would have claimed as a dependent. (45 C.F.R. § 155.605; IRS, Individual Shared Responsibility Provision-Exemptions: Claiming or Reporting).

On what grounds can I apply for a hardship exemption to the individual mandate?[1.1.7]

People may apply for a hardship exemption from the marketplace if they have experienced difficult financial or domestic circumstances that prevent them from obtaining coverage — such as homelessness, death of a close family member, domestic violence, bankruptcy, substantial recent medical debt, or disasters that substantially damage a person’s property. People may also apply for a hardship exemption if obtaining coverage would be so burdensome as to cause the applicant to experience other serious situations like the deprivation of food, shelter, or other necessities. Consult your marketplace for more information about hardship exemptions. (26 U.S.C. § 5000A (e)(5); 78 Fed. Reg. 53646, Aug. 30, 2013; CMS, Exemptions from the Fee for Not having Health Coverage, Nov. 2015).

Do I have to buy a plan by the end of open enrollment (i.e., for 2017 coverage, by January 31, 2016) to avoid a tax penalty?[1.1.8]

Unless you can get health insurance elsewhere (e.g., employer-sponsored plan or Medicaid, if eligible), then yes, because you won't have another chance to enroll into marketplace coverage unless you experience a life event qualifying you for a special enrollment. See Chapter 3 of this section for more information about open and special enrollment. (45 C.F.R. §§ 410 and 420).

If I change health coverage during the year and end up with a gap when I am not covered, will I owe a payment?[1.1.9]

Possibly — it depends on how long you were without coverage. Individuals are treated as having minimum essential coverage for a calendar month if they have coverage for at least one day during that month. Additionally, as long as the gap in coverage is less than three consecutive months, you may qualify for an exemption and not owe a payment. (26 U.S.C. § 5000A (e)(4); 78 Fed. Reg. 53646, Aug. 30, 2013).

I lost coverage March 15 and didn’t get new coverage until April 1. Am I considered uninsured for the month of March because I lacked coverage for part of the month?[1.1.10]

No, if you are covered even one day during a month, you are considered to be insured for that month. Similarly, a person who is considered exempt from the individual responsibility requirement for even one day during a month is considered exempt for that month. (26 U.S.C. § 5000A (e)(4); 78 Fed. Reg. 53646, Aug. 30, 2013).

I live overseas. Do I still have to comply?[1.1.11]

Probably not. U.S. citizens or residents living abroad can qualify for an exemption from the requirement to have minimum essential coverage as long as they meet certain requirements (e.g., U.S. citizen is a bona fide resident of a foregin country). (26 U.S.C. §5000A (f)(4);Individual Shared Responsibility Provision-Exemptions).

Apparently my family isn’t eligible for subsidies in the marketplace because I am eligible for self-only coverage at work that is considered affordable. But we can’t afford to buy marketplace coverage on our own. Will I have to pay a penalty because my family members are uninsured?[1.1.12]

No. If the amount you would have to pay to actually cover your spouse and kids will be more than 8.16 percent of your family income in 2017 (8.13 percent in 2016), they won’t be penalized for not having health coverage. (26 U.S.C. § 5000A (e); 79 Fed. Reg. 30240, May 27, 2014).

I didn't sign up for coverage in my employer plan this summer because the premiums were too high. However I just learned that the employer plan available to me means I don't quality for premium tax credits with marketplace coverage. When I file my taxes, will I have to pay a penalty for the months I didn't have coverage? [1.1.13]

Yes, unless you qualify for an exemption. See FAQ 1.1.5 for a list of exemptions.

Minimum Essential Coverage
How do I know if my coverage counts so I can avoid paying the tax penalty?[1.1.14]

To meet the coverage requirement, individuals must have “minimum essential coverage.” Most people that have health coverage today have a plan that will count as minimum essential coverage, and will not need to do anything more than continue the coverage that they have. If you have any of the following types of coverage, you likely have minimum essential coverage:

  • Employer-sponsored coverage, including COBRA continuation coverage and retiree coverage
  • Coverage purchased in the individual market, including a plan purchased in a health insurance marketplace
  • Medicare Part A coverage and Medicare Advantage plans
  • Most Medicaid coverage
  • Most Children’s Health Insurance Program coverage
  • Veterans health coverage administered by the Veterans Administration that are comprehensive
  • Most types of TRICARE (coverage for members of the military)
  • Self-funded student health coverage that began on or before Dec. 31, 2014 (for later plan or policy years, programs can apply to be recognized as minimum essential coverage)
  • Coverage for Peace Corps volunteers
  • Refugee Medical Assistance from the federal Administration for Children and Families
  • Department of Defense health benefit program for civilian employees known as “Non Appropriated Fund” personnel

All health insurers must provide individuals with a Summary of Benefits and Coverage, which uses a standard format to outline the benefits, cost-sharing and coverage limits of plans. The Summary of Benefits and Coverage must also state whether the plan meets minimum value and counts as minimum essential coverage.

If you don’t currently have coverage, will soon lose coverage, or are thinking of changing coverage, you can obtain minimum essential coverage by purchasing a plan on your state’s health insurance marketplace.

Some types of coverage sold outside a health insurance marketplace do not qualify as minimum essential coverage, such as discount plans, short-term policies, or policies that cover only cancer. These kinds of products are sometimes referred to as “excepted benefits.” They do not count as minimum essential coverage.

If you are uncertain whether your plan qualifies as minimum essential coverage, contact your employer’s human resources department or your health insurer. (26 U.S.C. § 5000A (f); 79 Fed. Reg. 4302, Jan. 27, 2014; 77 Fed. Reg. 8668, Feb. 14, 2012).

Do private insurance policies have to be labeled to show whether they are minimum essential coverage?[1.1.15]

All health insurers and employer-sponsored group health plans must provide people with a Summary of Benefits and Coverage, which uses a standard format to outline the benefits, cost-sharing and coverage limits of plans. The Summary of Benefits and Coverage must also say whether the plan meets minimum value and counts as minimum essential coverage. (45 CFR 147.200(a)(2)(i)(G); 77 Fed. Reg. 8668, Feb. 14, 2012).

I’m in a grandfathered plan that doesn’t cover prescription drugs. Does that count as minimum essential coverage?[1.1.16]

Yes, grandfathered plans count as minimum essential coverage. (26 U.S.C. §5000A (f)(1)(D)).

Does the individual mandate require me to purchase dental coverage for me or my child?[1.1.17]

Individuals who enroll in minimum essential coverage that does not include pediatric benefits will not owe a tax penalty for lacking dental coverage. This might happen for a number of reasons. Pediatric dental benefits are included in essential health benefits and must be offered through marketplaces. Some marketplace plans offer dental benefits together in the same policy with other health benefits. In other cases, dental benefits are offered through stand-alone plans. Where stand-alone plans are offered, affordability of pediatric dental benefits may be a problem for some families. In addition, the essential health benefit rules do not apply to large employer plans or to self-insured employer plans, and so people enrolled in such plans may or may not have pediatric dental benefits. (45 C.F.R. § 155.1065; 45 CFR § 156.440(b); CMS, Exemptions from the Fee for Not Having Heatlh Coverage, Nov. 2015).

I notice short-term policies are for sale outside of the marketplace and they are much cheaper than many other policies. What is a short-term policy? If I buy a short-term policy, does that satisfy the requirement to have minimum essential coverage?[1.1.18]

As the name implies, a short-term health insurance policy offers coverage for a period of less than 12 months (e.g., many offer coverage for just six months) and are renewable at the option of the insurance company. Though you may be given an opportunity to request to renew the policy, if you’ve made claims since you bought it, the insurer can refuse to renew it. This is also called a non-guaranteed-renewable policy. Short-term policies are not considered minimum essential coverage. Insurance companies that sell such policies are required to notify you that such policies are not considered minimum essential coverage. (26 U.S.C. §5000A (f)(3); 79 Fed. Reg. 4302, Jan. 27, 2014).

I have Medicaid coverage just for the care I need while I’m pregnant. Does that count for the individual responsibility requirement? [1.1.19]

It depends. Medicaid coverage for pregnant women counts as minimum essential coverage in states that provide full Medicaid benefits under such pregnancy-related coverage or under pregnancy-related CHIP coverage that also provides full CHIP benefits. If the coverage only provides pregnancy related services, then it is not considered minimum essential coverage. There is a hardship exemption for people enrolled in pregnancy-only Medicaid coverage, coverage through enrollment of an unborn child in CHIP, or Medicaid medically needy coverage with limited benefits that is not considered minimum essential coverage (79 Fed. Reg. 4302, Jan. 27, 2014; IRS, Notice 2014-10; IRS, Notice 2014-71, CMS, SHO#14-002, Minimum Essential Coverage; CMS, Exemptions from the Fee for Not Having Heatlh Coverage, Nov. 2015).

What types of Medicaid coverage is not considered minimum essential coverage? [1.1.20]

In general, Medicaid coverage that does not offer comprehensive coverage or full Medicaid benefits is not considered minimum essential coverage. For example, a Medicaid program that only offers family planning services would not be considered minimum essential coverage. An exemption is available for the following types of Medicaid coverage that is not considered minimum essential coverage: pregnant women receiving pregnancy-only coverage or coverage through enrollment of an unborn child in CHIP, and medically needy coverage that is not comprehensive or offers full Medicaid benefits. (IRS, Notice 2014-71; CMS, SHO#14-002, Minimum Essential Coverage).

I have a marketplace plan and am receiving premium tax credits. I am now pregnant. Since I’m eligible for pregnancy-related Medicaid coverage, am I required to drop my marketplace plan and lose my financial assistance? [1.1.21]

No, you are not required to drop your marketplace plan. You have a choice between your marketplace plan and the Medicaid coverage. You can continue on your plan throughout your pregnancy and continue receiving the premium tax credit. You can also remain on your marketplace plan and receive premium tax credits in situations where your unborn child qualifies for CHIP coverage. (IRS, Notice 2014-71; CMS, SHO#14-002, Minimum Essential Coverage).

Chapter 2: Health Insurance Marketplace: Navigating New Coverage Options

Background

Frequently Asked Questions

Eligibility for the Health Insurance Marketplace
Who can buy coverage in the marketplace?[1.2.1]

Most people can shop for coverage in the marketplace. To be eligible you must live in the state where your marketplace is, you must be a citizen of the U.S. or be lawfully present in the U.S., and you must not currently be incarcerated.

Not everybody who is eligible to purchase coverage in the marketplace will be eligible for subsidies, however. To qualify for subsidies people will have to meet additional requirements having to do with their income and their eligibility for other coverage. (45 C.F.R. § 155.305; 26 U.S.C. § 36B (c)).

I live in one state, but drive across the border every day to work in a different state. What marketplace should I use to buy coverage?[1.2.2]

You should buy coverage in the marketplace in the state where you live. You do not meet the marketplace residency requirements of the state you work in. In order to meet marketplace residency requirements, you must 1) be living at a location and 2) have intent to reside there or have a job or be looking for a job. (45 C.F.R. § 155.305 (a)(3)); CMS, FAQs on the Marketplace Residency Requirement and the Special Enrollment Period due to a Permanent Move, Jan. 19, 2016).

I’m eligible for health benefits at work, but I want to see if I can get a better deal in the marketplace. Can I do that?[1.2.3]

You can always shop for coverage on the marketplace, assuming you meet other eligibility requirements, but if you have access to job-based coverage, you might not qualify for premium tax credits. (26 U.S.C. § 36B (c)).

I have Medicare. Can I drop it and go to the health insurance marketplace?[1.2.4]

If you have Medicare, you cannot buy a plan in the marketplace except under limited circumstances. Companies that sell marketplace plans are prohibited from selling these plans to you if they know you are covered by Medicare except where the individual buying coverage has lost high risk pool coverage that they used to supplement Medicare.

However, a small number of individuals are enrolled in Medicare Part A and paying premiums (typically those who have not paid Medicare taxes for 10 years or more). These individuals may be eligible for a premium tax credit if they are not enrolled in Medicare, and coverage through a health insurance marketplace may be the best option for them. (Section 1882(d)(3)(A) of the Social Security Act; IRS Notice 2013-41).

Can I buy a plan in the marketplace if I don’t have a green card?[1.2.5]

If you are not a U.S. citizen, a U.S. national, or an alien lawfully present in the U.S., you are not eligible to buy a plan on the health insurance marketplace. However, you can shop for health insurance outside of the marketplace in the non-group market. Insurers outside of the marketplace are prohibited from turning you down based on your health status or your immigration status and must generally follow the same rules as plans in the marketplace. To obtain coverage, contact a state-licensed health insurance company or a licensed agent or broker. Your state Department of Insurance can help you find one. (45 C.F.R. § 155.305).

My son goes to college in another state but we want him on our family plan in the health insurance marketplace. Can we do that?[1.2.6]

Yes. If your son is a member of your tax household, he can join your family plan on the health insurance marketplace, even if he lives out of state. However, your child may need to return home in order to access care within your plan’s network. If he or she gets health care services in another state, the providers may be outside your plan’s network and you may have to pay high co-payments or coinsurance. Your son is also likely eligible to buy coverage in the state where he attends school as long he can establish residency. If he does establish residency in the college state, he would have a greater choice of local in-network providers. (45 C.F.R. § 155.305 (a)(3); CMS, FAQs on the Marketplace Residency Requirement and the Special Enrollment Period due to a Permanent Move, Jan. 19, 2016).

My doctor is across the state in a neighboring state. Will I still be able to see him if I get a plan on the Marketplace? [1.2.7]

It will depend on whether or not the health plan you choose covers your doctor. Some plans may offer a broader scope of covered providers than others. To make sure your doctor is covered under a plan, you should call the plan and ask. Note that it is important to ask the provider not just about the insurance company offering the plan, but whether he or she participates in the network of the specific plan the insurance company is offering. However, before selecting a new plan, you should also confirm with the plan directly that your doctor is in-network. While every plan on the marketplace must provide a link to its health provider directory, these lists are subject to change and may not be up-to-date.

My husband is covered under my plan at work. If I retire and sign up for my retiree plan, will my husband be eligible to buy a plan on the marketplace?[1.2.8]

Probably. Most people are eligible to buy a plan on the health insurance marketplace. However, depending on your household income and his access to other coverage options, he may not be eligible for premium tax credits to lower the cost of a marketplace plan. For example, if he is eligible for Medicare, he would not be eligible for premium tax credits. However, if he’s not eligible for Medicare and doesn’t enroll in your retiree health plan, he could be eligible for premium tax credits, assuming your household income is between 100 to 400 percent of the federal poverty level. (78 Fed. Reg. 25909, May 3, 2013).

I own my own business and have no employees, what are my options?[1.2.9]

While you are not eligible to purchase small group health insurance through the SHOP marketplace, you can purchase individual market coverage and may be able to qualify for premium tax credits and/or cost-sharing reductions through the health insurance marketplace for individuals. (79 Fed. Reg. 43622, July 28, 2014; 42 U.S.C. § 18071).

Marketplace Verification and Appeals
The marketplace said I must submit additional information to document my eligibility (to buy coverage or to qualify for premium tax credits). They gave me 90 days. I won’t be able to gather the information that quickly. Can I request an extension?[1.2.10]

Yes. You must request any extension before the 90-day deadline runs out. You can request the extension in writing or through the marketplace call center. In your request you should include your name, a description of the supporting documents requested, the reason you need an extension, and the amount of additional time you need. You may want to ask a Navigator for help requesting an extension. (45 C.F.R. § 155.315 and 155.320).

I missed the deadline for submitting additional documentation to the marketplace to prove my  eligibility (to buy coverage or to qualify for premium tax credits or to receive an exemption). Can I request an extension?[1.2.11]

If the marketplace hasn’t received the requested information within 90 days and you didn’t already ask for an extension, the marketplace will make a determination based on the information it has. If you disagree with that decision you can appeal. (45 C.F.R. §155.355).

How do I appeal a marketplace decision?[1.2.12]

You can request an appeal of any marketplace decision, including decisions about:

  • Your eligibility to buy coverage in the marketplace
  • Your eligibility to buy coverage outside the open enrollment period
  • Your eligibility for Medicaid or CHIP
  • Your eligibility for, or the amount of, premium tax credits or cost-sharing reductions, including the length of time the marketplace takes to make a determination
  • Your eligibility for an exemption from the penalty for not having health insurance

After you have applied for coverage in the marketplace, you will get an eligibility notice that explains what you qualify for. If you don’t agree with that notice, you can file an appeal. The notice will explain the process you should follow if you want to appeal. For example, depending on your state and eligibility determination, you may need to file with your state Medicaid or CHIP agency rather than the marketplace. Your letter will explain which process is the one for you to use.

There are two ways to file a marketplace appeal:

  1. Mail or fax in an appeal request form available at https://www.healthcare.gov/marketplace-appeals/. The marketplace secure fax line is 1-877-369-0129.
  2. Mail the appeal request form or write a letter to:
    Health Insurance Marketplace
    Attn: Appeals
    465 Industrial Blvd.
    London, KY 40750-0061

To request an appeal, you’ll have to provide your name and contact information and an explanation of what you are appealing and why. You can submit documents to the marketplace that support your case. You can submit documents along with your initial appeal request or at any time during the appeal process, up until a hearing

The marketplace may offer you the option of receiving temporary benefits while your appeal is pending. You can accept the temporary benefits or waive them. If you accept temporary benefits during the appeals process and then lose your appeal, you might have to pay back the benefits you were ultimately determined to be ineligible for.

After you file an appeal, you will get the following from the marketplace:

  • A letter that states that your appeal was received
  • A letter asking for more information or documentation if needed
  • A decision, which the marketplace must mail to you within 90 days of receiving your appeal request.

The marketplace will review your completed appeal once it is submitted. Then the marketplace will let you know its decision. If you still disagree with the decision, you can request a hearing. While you are waiting for the hearing to take place, the marketplace may contact you to try to resolve the dispute informally.

If you need help with your appeal:

How long will the appeal take?[1.2.13]

This will depend on the reason for your appeal and the documentation needed to decide your appeal. In general, the Marketplace must let you know of its decision and mail its response within 90 days of receiving your request. You can also contact the marketplace for more information about your appeal. (45 C.F.R. § 155.545 (b)).

Immigrants
Can immigrants enroll in Medicaid or Children’s Health Insurance Program (CHIP) coverage?[1.2.14]

Most lawfully present immigrants who meet Medicaid and CHIP program requirements, such as income and state residency, can enroll in Medicaid or CHIP after they have been in the United States for five years or more.

Some groups of lawfully present immigrants do not have to wait five years before they may enroll in Medicaid and CHIP. These include refugees, asylees, and other humanitarian immigrants; veterans and military families; and pregnant women and children in some states.

Some lawfully present immigrants who are authorized to work in the United States cannot enroll in Medicaid, even if they have been in the country for five or more years.

Undocumented immigrants may not enroll in Medicaid or CHIP coverage. (42 C.F.R. § 435.406; 42 C.F.R. § 457.320).

Can immigrants buy health insurance through the health insurance marketplace?[1.2.15]

Most lawfully present immigrants can buy health insurance through the new health insurance marketplaces. This group includes lawfully present immigrants who cannot enroll in Medicaid.

Undocumented immigrants may not purchase coverage through the new health insurance marketplaces. (45 C.F.R. § 155.305).

Can immigrants get help paying premiums and/or cost-sharing for health insurance in the new health insurance marketplaces?[1.2.16]

Lawfully present immigrants can get tax credits to help pay premiums and cost-sharing for health insurance through the marketplaces. Like citizens, they can get tax credits to help pay premiums if they make between 100 percent and 400 percent of the federal poverty level. The amount they pay for care will also be lowered if they make between 100 percent and 250 percent of the federal poverty level. To get this help, they cannot be offered affordable health insurance through their job or be eligible for Medicaid.

Lawfully-present immigrants who make less than 100 percent of the federal poverty level also can get help paying premiums and cost-sharing if they cannot enroll in Medicaid. Many lawfully-present immigrants cannot enroll in Medicaid until they have been in the United States for five or more years.

Undocumented immigrants cannot receive help paying for premiums or cost-sharing for marketplace coverage and may not buy health insurance through the marketplaces even at full cost. (42 U.S.C. § 18071; 26 CFR § 1.36B-2(b); IRS, Questions and Answers on the Premium Tax Credit).

Can family members in families with mixed immigration status, where some family members are lawfully present and others are undocumented, enroll in Medicaid or CHIP or receive help buying coverage through the marketplaces?[1.2.17]

Citizen and lawfully present family members can get health insurance coverage through Medicaid, CHIP, and marketplaces even if other family members are not lawfully present. Family members who are not lawfully present, including undocumented immigrants, may apply for health insurance for citizen and lawfully present family members. For example, an undocumented immigrant parent may apply for health insurance for a citizen child.

When a family with mixed immigration status applies for health insurance, it only has to give citizenship and immigration status for those family members applying for coverage. Non-applicants, such as a parent applying for a child, do not have to provide citizenship or immigration status. Non-applicants will be asked to provide a Social Security number, but do not have to provide one unless the family is applying for help with costs for marketplace coverage and the individual is the tax-filer for the household. (42 C.F.R. § 435.406; 42 C.F.R. § 457.320).

How will an individual’s citizenship and immigration status be checked?[1.2.18]

Only those individuals in a family who are applying for health insurance are required to provide citizenship and immigration status. Applicants also must provide a Social Security number if they have one.

Citizenship and immigration status for those applying for health insurance will be checked electronically with several systems, including the Social Security Administration, the Department of Homeland Security, and SAVE (Systematic Alien Verification for Entitlements).

If an individual’s status cannot be checked through an electronic match, the individual can give other documentation of his or her status. (45 C.F.R. § 155.315).

Will getting health insurance through Medicaid, CHIP, or health insurance marketplaces affect an individual’s ability to obtain lawful permanent status or citizenship?[1.2.19]

In general, getting health insurance through Medicaid, CHIP, or the marketplaces will not prevent an individual from obtaining lawful permanent status or citizenship. (HealthCare.gov, Immigrant Families and the Marketplace).

Will getting health insurance through Medicaid, CHIP, or health insurance marketplaces put undocumented family members at risk?[1.2.20]

Medicaid, CHIP, and the marketplaces must protect individuals’ information and keep it private. Information can be used only for eligibility and enrollment purposes. (45 C.F.R. § 155.260).

Are immigrants required to have health insurance coverage under the Affordable Care Act’s individual mandate?[1.2.21]

Most immigrants who are residents lawfully present in the U.S., including “green card holders,” must have health insurance coverage or they will pay a tax penalty unless they qualify for an exemption. Check with your marketplace for more information about how the requirement applies to you, or if you want to apply for an exemption.

Immigrants who are not lawfully present in the U.S. will not pay a tax penalty if they do not have health insurance. (26 U.S.C. § 5000A).

Who is a lawfully present immigrant for health insurance purposes?[1.2.22]

Lawfully present immigrants generally include:

  • Lawful permanent residents (or “green card holders”);
  • Persons fleeing persecution, including refugees and asylees;
  • Other humanitarian immigrants, including those granted temporary protected status;
  • Cuban/Haitian entrants; and
  • Survivors of domestic violence, trafficking, and other serious crimes.

See https://www.healthcare.gov/immigration-status-and-the-marketplace/ for more information and other groups that are lawfully present. (26 U.S.C. § 5000A (d)(3)).

Are individuals granted deferred action under “Deferred Action for Childhood Arrivals” eligible for Medicaid, CHIP, and the health insurance marketplaces?[1.2.23]

Some undocumented youth have been given temporary permission to stay in the United States under a program called Deferred Action for Childhood Arrivals. These individuals are lawfully present in the United States and can be granted work authorization and Social Security numbers. However, they are not eligible for Medicaid, CHIP, or the marketplaces.

Where can immigrants who cannot enroll in Medicaid or CHIP or get coverage through the marketplaces get health care or health coverage?[1.2.24]

Hospitals are required to provide emergency care and treatment to all individuals regardless of immigration or insurance status, though afterwards they can bill for their services. In addition, individuals may get low-cost care at community health centers.

Individuals may purchase health coverage through an employer or a spouse’s employer or the individual insurance market outside of the marketplace. Some states and counties also offer health programs for immigrants. (HealthCare.gov, Immigrant Families and the Marketplace, available at https://www.healthcare.gov/what-do-immigrant-families-need-to-know/).

Chapter 3: Open and Special Enrollment Periods

Background

Frequently Asked Questions

When can I buy a health plan through the marketplace?[1.3.1]

In general, you can only enroll in non-group health plan coverage during the open enrollment period. For 2017 coverage, the open enrollment period for marketplaces begins November 1, 2016 and extends through January 31, 2017. Once the open enrollment period is over, individuals and families will not be able to enroll in marketplace health plans until the next open enrollment period. However, if you experience certain changes in circumstances during the year, you will have a special 60-day opportunity to enroll in marketplace health plans, outside of the open enrollment period. In addition, if you have an individual insurance policy that is cancelled outside the open enrollment period, you will have a special 30-day opportunity to enroll.

Individuals and families buying non-group coverage on their own, outside of the marketplace, can also only enroll in coverage during open enrollment periods and special enrollment opportunities.

American Indians and Alaska Natives can enroll in coverage throughout the year, not just during open enrollment periods or special enrollment opportunities. (HealthCare.gov; Important Marketplace deadlines; 45 C.F.R. § 155.420; 45 C.F.R. § 155.350).

When can I enroll in Medicaid?[1.3.2]

You can enroll in Medicaid or CHIP at any time during the year, not just during open enrollment. (42 C.F.R. § 435.906)

Why can’t I buy a plan when I need it? Why do I have to wait for the open enrollment period?[1.3.3]

If everyone were allowed to wait until they were sick to buy coverage, premiums would be very expensive. An open enrollment period encourages healthy people to buy a plan to protect themselves from unanticipated events during the year. Health insurers need a mix of healthy and sick people to make premiums fair for everyone.

Can I buy or change private health plan coverage outside of open enrollment?[1.3.4]

In general, you can only buy or change your private, non-group health plan coverage outside of the open enrollment period if you have a qualifying life event that entitles you to a special enrollment opportunity. Some events that trigger a special enrollment opportunity are:

  • Loss of other coverage (for example, if you lose your employer-sponsored coverage because you quit your job, were laid off, or if your hours were reduced, or if you lose student health coverage when you graduate). Note that loss of coverage because you didn’t pay premiums or voluntarily terminate employer-sponsored coverage does not trigger a special enrollment opportunity.
  • Gaining a dependent (for example, if you get married or give birth to or adopt a child). Note that pregnancy does NOT trigger a special enrollment opportunity.
  • Marriage.
  • Loss of dependent status (for example, “aging off” a parent’s plan when you turn 26) or death of an enrollee or dependent.
  • Moving to another state or within a state and gaining access to new plans. You must meet the marketplace residency requirements: 1) you are living at the location and 2) intend to reside at the location or have or are looking for employment.
  • Exhaustion of COBRA coverage; voluntarily dropping COBRA coverage outside of open enrollment will not trigger a special enrollment period.
  • Losing eligibility for Medicaid or the Children’s Health Insurance Program.
  • For people enrolled in a marketplace plan, income increases or decreases sufficient to change eligibility for premium tax credits and/or cost-sharing reductions.
  • For people who live in a state that did not expand Medicaid, but would otherwise be eligible, income increases to change eligiblity for premium tax credits and/or cost-sharing reductions.
  • Change in immigration status from a non-eligible status to an eligible one.
  • Enrollment or eligibility error made by the marketplace or another government agency or somebody, such as an assister, acting on their behalf.

Note that some triggering events will only qualify you for a special enrollment opportunity in the health insurance marketplace; they do not apply in the outside market. For example, if you gain citizenship or lawfully present status, the marketplace must provide you with a special enrollment opportunity.

When you experience a qualifying event, your special enrollment opportunity will last 60 days from the date of that triggering event. There are a few exceptions to the 60 day timeframe. If a qualified individual or his dependent loses minimum essential coverage, then the individual has 60 days before or after the last date of coverage. This includes loss of employer-based coverage, Medicaid-related pregnancy coverage, and Medicaid-related medically needy coverage. Additionally, if an individual is a Native American or Alaskan Native, he or she can enroll into a Marketplace plan or change his or her Marketplace plan once per month. The marketplace will ask you to provide verifying documents for the following qualifying events: loss of other coverage, moving, having a baby, gaining of a dependent through adoption or court order, getting married to verify the special enrollment. In general, you will have 30 days to submit the documentation. (45 C.F.R. § 155.420(d); CMS, SHO#14-002, Minimum Essential Coverage; CMS, FAQs on the Marketplace Residency Requirement and the Special Enrollment Period due to a Permanent Move, Jan. 19, 2016).

If I buy a plan during open enrollment, when does my coverage start?[1.3.5]

If you buy a plan between November 1 and December 15, 2016, and make your first premium payment by the due date specified by your plan, your new coverage will start on January 1, 2017. After December 15, 2016, if you buy a plan between the 1st and 15th of the month and pay your premium by the plan’s due date, your coverage becomes effective on the first day of the following month. If you enroll between the 16th and the last day in December and January, and pay your premium by the plan’s due date, your coverage will become effective the first day of the second following month. In other words, if you buy your coverage on December 16th, 2016, your coverage will be effective February 1, 2017. Likewise, if you buy a plan on January 16th, 2017, your coverage becomes effective on March 1, 2017. (45 C.F.R. § 155.410).

Does pregnancy trigger a special enrollment opportunity to buy or change coverage?[1.3.6]

No, it does not. However, when the baby is born you will be eligible for a special enrollment opportunity. You can enroll your baby in coverage at that point. You (and your spouse and any other children you have) can also change health plans during this special enrollment opportunity. (45 C.F.R. § 155.420).

My hours at work were cut and I no longer qualify for my employer’s plan. Do I have to wait until the open enrollment period to sign up for an individual plan?[1.3.7]

No. You qualify for a “special enrollment period” and can purchase individual coverage, so long as you do so within 60 days of losing your employer plan. If you know the date your coverage will end, your special enrollment period can begin 60 days prior to the end of your coverage, so you can enroll in time to avoid a gap in coverage. (45 C.F.R. § 155.420).

My income has gone down and I think I may now qualify for premium tax credits in the health insurance marketplace. Do I have to wait for an open enrollment period before I can enroll?[1.3.8]

It depends. If you are currently enrolled in a marketplace health plan and are newly eligible for a premium tax credit, or if you’ve had a change in eligibility for premium tax credits or cost-sharing reductions, you may enroll in a new plan on the health insurance marketplace at any time during the year, so long as you do so within 60 days of your change in status. However, if you are not currently in a marketplace plan, you do not qualify for a special enrollment period. (45 C.F.R. § 155.420).

I just got a promotion and no longer qualify for premium tax credits. Can I drop my current plan and buy a new one even though it’s outside the open enrollment period? Can I buy a plan outside the health insurance marketplace?[1.3.9]

If you are currently enrolled in a plan on the health insurance marketplace, you may buy a new marketplace plan if you lost eligibility for premium tax credits, so long as you do so within 60 days of your change in status. However, if you want to buy health insurance outside the health insurance marketplace, you will need to wait until the open enrollment period. (45 C.F.R. § 155.420).

NOTE: Check the rules of your state’s marketplace. States have the flexibility to expand special enrollment opportunities for consumers buying coverage outside the Marketplace.

I am an American Indian. When can I enroll in a marketplace plan?[1.3.10]

If you are an eligible American Indian, you may enroll in or change plans on the health insurance marketplace one time per month. (45 C.F.R. § 155.420).

I signed up for a bronze plan with a high deductible during open enrollment. Now, six months later, I need surgery and would rather be in a different plan with a lower deductible. Can I change plans?[1.3.11]

No, in general, once you sign up for a plan, you are locked into that coverage for 12 months, or until the next open enrollment period. A change in health status doesn’t make you eligible for a special enrollment opportunity. (45 C.F.R. § 155.420).

My marketplace plan took effect last month, but I just learned my primary care doctor is not in the plan’s network. Can I change plans?[1.3.12]

Only if it’s still open enrollment. For 2017 coverage, you can change plans any time during Open Enrollment regardless of when coverage was effectuated. Open Enrollment is scheduled to end January 31, 2017. After open enrollment, you can only change plans if you have a change in circumstance qualifying you for a Special Enrollment Period. See this FAQ for more on events that trigger a special enrollment period.

I’m a seasonal worker and spend 4 months of the year in a different state. Can I get a special enrollment opportunity to sign up for a new plan during the time I’m in that state? [1.3.13]

Yes, in this situation, you meet the marketplace residency requirements of the state you live in for 8 months and the state you work in for 4 months. Since the residency requirements are met, you are eligible for a special enrollment right to sign up for a new plan when you move to the new state. (CMS, FAQs on the Marketplace Residency Requirement and the Special Enrollment Period due to a Permanent Move, Jan. 19, 2016).

My husband and I are retired and spend 6 months of the year in Florida. Can we get a special enrollment opportunity to enroll in a new plan when we move to Florida, even though we’ll only be there for half the year? [1.3.14]

Yes. You have the “intent to reside” in Florida for six months, which the marketplace does not consider a “temporary absence” from your home state. Because you will be there for at least an “entire season or other long period of time,” you are eligible to enroll in Florida under a permanent move special enrollment period. You will also qualify for a SEP when you move back to your home state in the spring. (CMS, FAQs on the Marketplace Residency Requirement and the Special Enrollment Period due to a Permanent Move, Jan. 19, 2016).

I have been diagnosed with a serious health condition and will be obtaining care from an out-of-state hospital. During my course of treatment I’ll be living near the hospital. Can I qualify for a special enrollment period based on my “move” to a different state? [1.3.15]

No, you do not meet the marketplace residency requirements for the permanent move special enrollment since your absence is temporary and do not intend to live in the state where you’re receiving treatment, but rather intend to be in the state to receive treatment. Current guidance is clear that residency requirements are not met in this circumstance. (CMS, FAQs on the Marketplace Residency Requirement and the Special Enrollment Period due to a Permanent Move, Jan. 19, 2016).

I’m a college student and will be going to an out-of-state university. Can I qualify for a special enrollment period to sign up for a new plan in the state where I’ll be going to school? [1.3.16]

It depends. You may be eligible to buy coverage in the state where you attend school as long you can establish residency; otherwise your residency is determined by your parents or caregivers’ residency. If you can establish residency, then you may qualify for a permanent move SEP. (CMS, FAQs on the Marketplace Residency Requirement and the Special Enrollment Period due to a Permanent Move, Jan. 19, 2016).

Chapter 4: Eligibility for Premium Tax Credits and Cost-Sharing Reductions

Background

Frequently Asked Questions

Who is eligible for marketplace premium tax credits?[1.4.1]

Premium tax credits will be available to U.S. citizens and lawfully present immigrants who purchase coverage in the marketplace and who have income between 100 percent and 400 percent of the federal poverty level . Premium tax credits are also available to lawfully residing immigrants with incomes below 100 percent of the poverty line who are not eligible for Medicaid because of their immigration status. (Generally, immigrants must lawfully reside in the U.S. for five years before they can become eligible for Medicaid.)

In addition, to be eligible for the premium tax credits, individuals must not be eligible for public coverage—including most Medicaid, most Children’s Health Insurance Program coverage, Medicare, or military coverage—and must not have access to health insurance through an employer. There are exceptions to when you can apply for premium tax credits when you have other coverage. For example, there is an exception in cases when the employer plan is unaffordable because the employee’s share of the premium exceeds 9.66 percent of the employee’s household income in 2016 and 9.69 percent in 2017. There is also an exception in cases where the employer plan doesn’t provide a minimum level of coverage or actuarial value (the plan's share must be at least 60 percent of the cost of covered benefits for a standard population). (26 C.F.R. § 1.36B-2(b); 77 Fed. Reg. 30377, May 23, 2012; IRS Rev. Proc. 2014-37, July 24, 2014).

When can I apply for marketplace premium tax credits when other coverage is available?[1.4.2]

In general, if you have any of the following types of coverage, you would be ineligible for premium tax credits through the marketplace:

  • Employer-sponsored coverage, unless the coverage is unaffordable (your required contribution to the premium for self-only coverage costs more than 9.66 percent of household income in 2016, 9.69 percent in 2017) or does not meet minimum value (an actuarial value of less than 60 percent);
  • Government-sponsored coverage, including Medicare Part A coverage, Medicare Advantage plans, most Medicaid coverage and the Children’s Health Insurance Program coverage, Veterans health coverage and TRICARE (coverage for members of the military);
  • Coverage for Peace Corps volunteers. (26 C.F.R. § 1.36B-2(c); 77 Fed. Reg. 30377, May 23, 2012; IRS Rev. Proc. 2014-37, July 24, 2014).
I’m married. I work full-time for a large employer that offers me health benefits, but won’t cover spouses. Is that allowed? Can my spouse apply for coverage and subsidies in the marketplace?[1.4.3]

Beginning in 2015, employers with 100 employees who do not offer health benefits to full-time workers could face a fine, but they will not face a fine for failing to offer health benefits to employees’ dependents. If they do not offer coverage to their workers, they face a penalty if an employee qualifies for premium tax credits in the marketplace. Beginning in 2016, employers with 50 or more employees that don’t offer health benefits to their full-time workers may also be liable for a penalty. Beginning in 2016, employers will also be required  to offer health benefits to dependent children; however, employers are not required to offer coverage to the spouses of employees.

Meanwhile, because your spouse is not offered health benefits through your job, s/he may be eligible to apply for coverage and premium tax credits through the marketplace. (26 U.S.C. § 4980H; 79 Fed. Reg. 8544, Feb. 12, 2014; 26 C.F.R. § 1.36B-2(c); 77 Fed. Reg. 30377, May 23, 2012).

My family and I are offered health benefits through my job, but we can’t afford to enroll. My employer pays 100 percent of the premium for workers, but contributes nothing toward the cost of adding my wife and kids. Can we try to find a better deal in the marketplace?[1.4.4]

You can always shop for coverage on the marketplace, but your family members won’t be eligible for tax credits to help pay the premium. When people are eligible for employer-sponsored coverage, they can only qualify for marketplace premium tax credits if the employer-sponsored coverage is unaffordable. The way this is calculated, coverage is unaffordable only if your cost for coverage for a single person under the employer plan is more than 9.66 percent of your household income in 2016 and 9.69 percent of your household income in 2017. So although you may feel your family coverage is unaffordable in practical terms, it is considered technically affordable.

If your family members end up uninsured because family coverage is unaffordable, they will not have to pay a tax penalty under the “individual mandate.” (26 C.F.R. § 1.36B-2(a), 77 Fed. Reg. 30377, May 23, 2012; IRS Rev. Proc. 2014-62).

I’m offered health benefits at work, but they’re not very good. I’m applying for better coverage and subsidies in the marketplace. The application asks whether I’m offered job-based health coverage that meets minimum value. What does that mean?[1.4.5]

The term “minimum value” means that your job-based plan would cover at least 60 percent of an average group of people’s covered health costs including hospitalization and physician services. Most employer plans will meet this test, but some may not. The marketplace application includes a form with questions about job-based coverage. You should take this form to your employer and ask them to fill it out. With that information the marketplace will determine whether the plan meets minimum value. If it doesn’t, you may be able to qualify for premium tax credits to help pay for marketplace coverage. (45 C.F.R. § 156.145; 77 Fed. Reg. 30377, May 23, 2012; 78 Fed. Reg. 25909, May 3, 2013).

My employer’s health plan only covers generic drugs. Does that mean it doesn’t have minimum value? Can I shop for better coverage and subsidies on the marketplace?[1.4.6]

Whether your employer’s health plan meets minimum value will depend on a number of factors. The marketplace application includes a form with questions about job-based coverage. You should take this form to your employer and ask them to fill it out. Your Summary of Benefits and Coverage for the plan will also tell you if the plan meets minimum value. With that information the marketplace will determine whether the plan meets minimum value. If it doesn’t, you may be able to qualify for premium tax credits to help pay for marketplace coverage. (45 C.F.R. § 156.145; 77 Fed. Reg. 30377, May 23, 2012; 78 Fed. Reg. 25909, May 3, 2013).

My employer’s plan is grandfathered so it doesn’t cover preventive services. Can I shop for better coverage in the marketplace if my job-based plan is grandfathered? [1.4.7]

Most people are eligible to shop for coverage in the marketplace. However, you can only qualify for premium tax credits if your job-based plan — whether it is a grandfathered plan or not — is unaffordable or if it doesn’t meet minimum value. Whether your employer’s health plan meets minimum value will depend on a number of factors. The marketplace application includes a form with questions about job-based coverage. You should take this form to your employer and ask them to fill it out. Your Summary of Benefits and Coverage for the plan will also tell you if the plan meets minimum value. With that information the marketplace will determine whether the plan meets minimum value. If it doesn’t, you may be able to qualify for premium tax credits to help pay for marketplace coverage. (45 C.F.R. § 156.145; 77 Fed. Reg. 30377, May 23, 2012).

If I’m eligible for other coverage but haven’t enrolled in it yet, can I qualify for premium tax credits in the marketplace?[1.4.8]

For certain types of coverage, if you are eligible but not enrolled, then you can still qualify for premium tax credits. These include:

  • Retiree health coverage offered by a former employer
  • COBRA coverage (when offered when you've lost your job)
  • Student health plan coverage
  • Medicare Part A coverage requiring payment of premiums

However, if you are eligible for job-based coverage (that is affordable and meets minimum value) or for Medicaid or CHIP, but you didn’t enroll, then you are not eligible for premium tax credits. Note that if you are eligible for COBRA because you had a reduction in hours at work, you will need to show that the COBRA coverage is unaffordable or to fails to meet minimum value in order to be eligible for premium tax credits. (26 C.F.R. § 1.36B-2(b) and (c); 77 Fed. Reg. 30377, May 23, 2012; IRS, Notice 2013-12; 79 Fed. Reg. 30240, May 27, 2014).

My kids are eligible for the Children’s Health Insurance Program. Can I enroll them in our marketplace health plan and get premium tax credits for them instead?[1.4.9]

You can add your children to your marketplace plan, but because they are eligible for your state’s Children’s Health Insurance Program (CHIP), they are not eligible for premium tax credits. The exception to that is if you live in a state that has a waiting period for enrolling in CHIP. During the waiting period, your children are eligible for a premium tax credit; when the waiting period has ended and they can enroll in CHIP, your children will become ineligible for the tax credit. (26 C.F.R. § 1.36B-2(c); IRS, Notice 2013-12).

I have an individual insurance policy. Can I drop it during open enrollment and go into the health insurance marketplace and qualify for premium tax credits?[1.4.10]

Yes, having an individual policy does not disqualify you from buying coverage through a health insurance marketplace with premium tax credits. As long as you meet the other eligibility criteria for premium tax credits, you will likely qualify. Even if you don’t qualify for premium tax credits, you may want to look at the coverage options in the health insurance marketplace, to see if there is a plan that would work better for you than the one you have now. In order to avoid a gap in coverage, be sure you don’t cancel your plan before your marketplace coverage will begin.

I’m a college student enrolled in my college’s student health plan. Can I drop it and go to the health insurance marketplace? [1.4.11]

Yes. You may apply for premium tax credits and enroll in a health plan through the health insurance marketplace, as long as you drop your student health plan before coverage begins through the marketplace. (26 C.F.R. § 1.36B-2(b) and (c); 77 Fed. Reg. 30377, May 23, 2012).

I’m eligible for COBRA but haven’t elected it yet. Does that affect my eligibility for marketplace subsidies?[1.4.12]

It depends on whether you are still working. If you are eligible for COBRA because you lost your job, just being eligible for COBRA doesn’t affect your eligibility for premium tax credits or cost-sharing assistance if you enroll in a marketplace plan. However, if you are eligible for COBRA because your hours at work were reduced and you are no longer eligible for your job-based plan, you will have to show that your COBRA is unaffordable or fails to meet minimum value in order to qualify for premium tax credits. (26 C.F.R. § 1.36B-2(b) and (c); 76 Fed. Reg. 50931, Aug. 17, 2011; 78 Fed. Reg. 25909, May 3, 2013).

I think I’ll qualify for a tax credit based on my income, but I see there are bronze plans that are really affordable. Is that the best plan for me?[1.4.13]

It depends. If your household income qualifies you for cost-sharing reductions as well as a premium tax credit, you will probably get a better deal with a silver level plan. You can use premium tax credits to buy a plan in any of the four coverage levels (bronze, silver, gold or platinum), but the cost-sharing reductions only apply to plans in the silver level. Depending on your health status and the level of cost-sharing assistance you would get, a very low premium bronze plan may be a better deal for you, but if your health care use turns out to be more than you anticipated, you will likely have a high deductible and higher out-of-pocket costs, with no cost-sharing reductions to help lower those. (26 C.F.R. § 1.36B-2; 45 C.F.R. §155.340; CMS Actural Value and Cost-Sharing Reductions Bulletin, Dec. 16, 2011).

Eligibility for Premium Tax Credits – Income Rules
How much can I earn and qualify for premium tax credits in the marketplace?[1.4.14]

Premium tax credits are available to people who buy marketplace coverage and whose household income is between 100 percent and 400 percent of the federal poverty level. (26 C.F.R. § 1.36B-2(b)).

Is the value of my house counted in determining my eligibility for premium tax credits in the marketplace?[1.4.15]

No, assets are not counted. So the value of your house, car, retirement savings, etc. will not affect your eligibility for premium tax credits. (IRS, Questions and Answers on the Premium Tax Credit).

My income is below the federal poverty level and my state has not elected to expand Medicaid eligibility. Can I qualify for premium tax credits?[1.4.16]

No, your income is too low to qualify for premium tax credits, but check with your state’s marketplace to see if there are other options you might be eligible for. Note that if you are lawfully present and have an income below 100% of the federal poverty level, you are eligible for premium tax credits. (26 C.F.R. § 1.36B-2(b)).

I don’t usually file taxes because I’m not required to. Will that affect my eligibility for premium tax credits?[1.4.17]

Yes. If you do not file taxes, you are not eligible to receive premium tax credits. Also, if you are currently receiving premium tax credits and don't file a tax return, you will not be able to receive premium tax credits in the future. The I.R.S. may contact you to pay back some or all of the premium tax credit you received. For example, if you received premium tax credits in 2015 and did not file a tax return, you will be not be eligible to receive premium tax credits to help pay for marketplace coverage in 2017. The marketplace will notify you when your coverage is renewed if you are not eligible for premium tax credits because you received premium tax credits in the past and did not file a tax return when your coverage is renewed. (26 C.F.R. § 1.36B-2; CMS, Guidance on Reenrollments and Redetermination for Marketplace Coverage for 2016).

I received premium tax credits and cost-sharing reductions in 2015, but did not file a 2015 tax return and did not reconcile my premium tax credits. Will this affect my eligibility for premium tax credit and cost-sharing subsidies in the future? [1.4.18]

Yes. If you did not file and reconcile your premium tax credits for 2015, you will not be eligible for premium tax credits and cost-sharing reductions for 2017 coverage. In general, you can file your taxes, reconcile premium tax credits and attest to this through your marketplace application. If you do this by December 15, 2016 and if you are eligible, you will receive premium tax credits and cost-sharing reductions starting January 1, 2017. If you do nothing, the marketplace will re-enroll you into 2017 coverage, but without premium tax credits and cost-sharing reductions.

Be sure to file your 2015 taxes and reconcile your premium tax credits before the end of open enrollment so that you can be considered eligible for premium tax credit and cost-sharing reductions. (26 C.F.R. § 1.36B-2; CMS, Guidance on Reenrollments and Redetermination for Marketplace Coverage for 2016).

I earn enough to qualify for premium tax credits, but I’m concerned my income may drop later this year to less than 100 percent of poverty. If that happens, will I have to pay back the premium tax credits I get?[1.4.19]

No, you will not have to pay back the premium tax credits you get if the marketplace said you were eligible for premium tax credits and your income drops below 100 percent of poverty. In fact, you may get a refund. When you file your taxes, the credit you receive will be compared to the credit you should have received based on your actual income for the year. If your income goes down, you will get a refund for the difference between the two. (26 C.F.R. § 1.36B-2).

What income is counted in determining my eligibility for premium tax credits?[1.4.20]

Eligibility for premium tax credits is based on your Modified Adjusted Gross Income, or MAGI. When you file a federal income tax return, you must report your adjusted gross income (which includes wages and salaries, interest and dividends, unemployment benefits, and several other sources of income). MAGI modifies your adjusted gross income by adding to it any non-taxable Social Security benefits you receive, any tax-exempt interest you earn, and any foreign income you earned that was excluded from your income for tax purposes.

Note that eligibility for Medicaid and CHIP is also based on MAGI, although some additional modifications may be made in determining eligibility for these programs. Contact your marketplace or your state Medicaid program for more information. (26 C.F.R. § 1.36B-1; IRS, Questions and Answers on the Premium Tax Credit).

I get Social Security benefits and don’t make enough to pay federal income taxes on them. Do I count my tax-free Social Security benefits when I apply for premium tax credits?[1.4.21]

Yes, all of your Social Security benefits will be counted as income in determining your eligibility. Note, however, that Social Security benefits for tax dependents that fall below the tax filing threshold do not count towards the household income. (IRS, Questions and Answers on the Premium Tax Credit; 42 C.F.R. § 435.603;

I’m divorced and receive child support payments from my ex-husband. Do I count that in determining eligibility for subsidies?[1.4.22]

No, child support payments you receive are not counted. (IRS, Taxable and Non-Taxable Income).

I’m divorced and I pay alimony to my ex-spouse. Should I deduct that from my income in determining my eligibility for subsidies?[1.4.23]

Alimony that is paid is deducted from gross income to determine adjusted gross Income. It will be excluded from income in determining your eligibility for subsidies. Center on Budget and Policy Priorities, The Health Care Assister's Guide to Tax Rules, updated Oct. 2014).

My income is very low, but I just inherited $10,000 from my aunt. Will that affect my eligibility for subsidies?[1.4.24]

No. Inheritances are not counted. (Center on Budget and Policy Priorities, The Health Care Assister's Guide to Tax Rules, updated Oct. 2014).

I’m currently collecting workers compensation benefits. Are those counted in determining my eligibility for subsidies?[1.4.25]

Worker’s compensation payments are generally not taxable, so they would not be counted in determining your eligibility. (Center on Budget and Policy Priorities, The Health Care Assister's Guide to Tax Rules, updated Oct. 2014).

I have a college scholarship that covers my tuition and fees. Do I count that as income in determining my eligibility for subsidies?[1.4.26]

Scholarship and fellowship payments for tuition and fees and course-related expenses required of all students are not counted as income in determining your eligibility. Payments for room and board are included. (Center on Budget and Policy Priorities, The Health Care Assister's Guide to Tax Rules, updated Oct. 2014).

My wife and I have a teenager who has a part-time job. Do we count her income as part of our household income when we apply for marketplace subsidies?[1.4.27]

The answer depends on whether she earns enough income to be required to file a federal income tax return on her own. Generally, kids aren’t required to file a return or pay taxes on their income if they earn less than $6,200 (in 2014). If your daughter earns less than that in a year, you would not count her income as part of your household income, but if she earns more than that amount, you would count it. (IRS, Publication 929).

I’m married but estranged from my spouse. We file taxes separately. Am I eligible for premium tax credits? [1.4.28]

Probably not. In order to qualify for premium tax credits you and your spouse must file a joint tax return, unless you are a survivor of domestic abuse or certify that you are an “abandoned” spouse and that you are unable to locate your spouse after “reasonable diligence.” (79 Fed. Reg. 43622, July 28, 2014).

I’m in a common law marriage – what should I indicate as my marital status on my application for premium tax credits? [4.1.29]

It depends. A common law marriage – a marriage established when a couple presents themselves to the world as married but does not have a marriage license – is recognized in only a minority of states. If you live in a state that recognizes common law marriage, then you are considered married and should indicate that on your Marketplace application. You are still considered married even if you moved to a state that doesn’t recognize common law marriage after living in a state that did recognize your marriage. If your state does not recognize common law marriage, then you cannot indicate you are married on your Marketplace application. (Center on Budget and Policy Priorities, The Health Care Assister's Guide to Tax Rules, updated Oct. 2014; 26 CFR § 1.36B-2; IRS, Publication 501 (2014), Exemptions, Standard Deduction, and Filing Information).

Eligibility for Premium Tax Credits - Rules for Counting Household Size and Income
I understand eligibility for premium tax credits is based on our household income. Who counts as being in my household?[1.4.30]

A household, for purposes of determining eligibility for premium tax credits, includes any individuals for whom a taxpayer claims a personal exemption on the federal tax form. That includes yourself, your spouse, and dependents. Dependents include children who meet certain requirements:

  • U.S. citizen or resident of the U.S., Mexico or Canada
  • Live with you for more than half the year
  • Under age 19 at the end of the year (or under age 24 if a full-time student); a child is considered to live with the taxpayer while he or she is temporarily away from home due to education, illness, business, vacation or military service.
  • Doesn’t provide more than 50 percent of his or her own support

Other individuals who can count as dependents include relatives, in-laws or full-time members of your household who are:

  • U.S. citizen or resident of the U.S., Mexico or Canada
  • Receive more than 50 percent of their support from you
  • Are related to you or live in your home all year
  • Make less than $4,000 in 2015 (threshold for 2016 will be updated when published by the IRS), generally excluding Social Security

A household can include individuals even if they are ineligible for tax credits (for example, individuals who are not lawfully present). Your household size can change during a year due to family changes, including the birth or adoption of a child, a child moving out of the house, and divorce or legal separation. When such changes take place you should report them to the marketplace as they may affect your eligibility for subsidies. Family changes also can trigger a special enrollment opportunity when you can change health plans outside of the regular open enrollment period.

Note that the definition of household for determining eligibility for premium tax credits sometimes differs from the definition of household for determining Medicaid eligibility. Ask your marketplace for more information about who should be counted in your household. (Center on Budget and Policy Priorities, The Health Care Assister's Guide to Tax Rules, updated Oct. 2014; 45 C.F.R. § 155.420(d)).

My partner and I live together but are unmarried. Is our combined household income what we should report?[1.4.31]

Because you are not married, you will be considered two separate households for the purposes of determining eligibility for premium tax credits and Medicaid. Assuming that neither of you are claiming any dependents on your tax returns, you will each be considered as a household of one and your own income will be used to determine eligibility for premium tax credits and Medicaid as well as the amount of any premium tax credit and cost-sharing reduction you may qualify for. If you are eligible for premium tax credits, you will each receive a separate determination of the amount of your credit and whether you are eligible for a cost-sharing reduction. Whether you can use your credits to buy a family policy rather than two individual policies will depend on the offerings in your state marketplace. (26 C.F.R. § 1.36B-2(b). (IRS, Questions and Answers on the Premium Tax Credit; 42 U.S.C. § 10871).

I’m raising my grandchild and claim her as a dependent. If I apply for marketplace subsidies, will we be considered a household of two?[1.4.32]

Yes, you will be considered as a household of two for both Medicaid and premium tax credits. However, your grandchild will be considered as her own household for Medicaid and CHIP and your income will not count in determining her eligibility for these programs. Assuming she does not have her own income she will likely be eligible for Medicaid or CHIP and not eligible for premium tax credits for coverage in the marketplace. You could of course purchase coverage for her in the marketplace but you would not be eligible for a premium tax credit to help pay for her plan if she is eligible for Medicaid or CHIP. Whether you could include her on your policy would depend on what insurers offer in your marketplace. (Center on Budget and Policy Priorities, The Health Care Assister's Guide to Tax Rules, updated Oct. 2014).

We are a married, same-sex couple. When we apply for marketplace subsidies, will the marketplace consider us a married household?[1.4.33]

The marketplaces in all states treat same-sex married couples the same as opposite-sex couples. Assuming you file or plan to file your federal income taxes as a married couple, you can apply for premium tax credits as a married couple. (Healthcare.gov, Same-sex married couples).

My partner and I are unmarried and we have two children. How do we count our household size and income when we apply for subsidies in the marketplace? Can we buy one policy to cover the whole family?[1.4.34]

Assuming you are eligible for premium tax credits, the amount of your credit will be calculated based on how you file your taxes. If, for example, you each claim one of your children, you each will be considered as a household of two. The income of each household would be evaluated separately to calculate eligibility for and the amount of premium tax credits and cost-sharing reductions. Using a different example, if you claim both children as dependents on your tax return, then you and your children will be considered a household of three, and your income will be the basis for determining subsidy eligibility for the three of you. Your partner will be a household of one and his/her eligibility for premium tax credits will be determined separately.

As for the type of coverage your family can purchase, that may vary based on the marketplace rules where you live. For example, some insurers may offer family coverage only to married couples. If you buy one policy for the entire family, all the tax credits you are eligible for can be used to reduce the premium for that policy. If you buy separate policies, you can allocate the premium tax credits across two plans. (Center on Budget and Policy Priorities, The Health Care Assister's Guide to Tax Rules, updated Oct. 2014).

My 20-year-old daughter has a son. She’s a full-time student and I support both of them financially. Which one of us – me or my daughter – should claim my grandson as our dependent?[1.4.35]

You should. Because you support both of them financially, you should claim them both as a dependent. Your daughter cannot claim her son as her dependent because she is a dependent herself. (26 CFR § 1.36B-1(f); 26 CFR § 1.152-1).

We claim my 22-year-old son, a full-time college student, as a dependent. He just got married. Can we continue to claim him as a dependent?[1.4.36]

Yes, assuming the other tests for claiming an adult child as a dependent are met. In the case of an adult, non-disabled child, he or she must be under 24, a student for at least 5 months of the year, and not provide more than half of his or her own support (i.e., rent, food, etc). (26 CFR § 1.36B-1(f); 26 CFR § 1.152-1).

My 23-year-old daughter lives with us but pays rent and helps buy groceries. Can we include her as a dependent?[1.4.37]

Possibly. To claim her as a dependent, she cannot provide more than half of her own support, which includes rent or the fair rental value of the home, food, utilities, and home repairs. Expenses related to your daughter’s clothes, education, medical, travel and other expenses are included. Support from your child can come from taxable and nontaxable income, such as wages and Social Security. It can also include student loans, but does not include any scholarships she receives. And only funds that contribute to your daughter’s support are included. If she puts all her wages into a savings account, that money would not be included as support paid by the child. (26 CFR § 1.36B-1(f); 26 CFR § 1.152-1).

My mother lives on her own. She earns about $3000 a year from Social Security and my husband and I pay her rent and help buy groceries. Can we claim her as a dependent?[1.4.38]

Possibly. If her gross income is less than $3,950 (in 2014) and you pay more than half of her support, then you may be able to claim her as a dependent. She does not need to live with you. (26 CFR § 1.36B-1(f); 26 CFR § 1.152-1; IRS, Publication 501 (2014), Exemptions, Standard Deduction, and Filing Information).

Cost-Sharing Subsidies
I can’t afford to pay much for deductibles and co-pays. Is there help for me in the marketplace for cost-sharing?[1.4.39]

Yes. If your income is between 100 percent and 250 percent of the federal poverty level, you can also qualify for cost-sharing reductions. These will reduce the deductibles, co-pays, and other cost-sharing that would otherwise apply to covered services.

The cost-sharing reductions will be available through modified versions of silver plans that are offered on the marketplace. These plans will have lower deductibles, co-pays, coinsurance and out-of-pocket limits compared to regular silver plans. Once the marketplace determines you are eligible for cost-sharing reductions, you will be able to select one of these modified silver plans, based on your income level. (Patient Protection and Affordable Care Act § 1402, 42 U.S.C. § 18071).

If I use my premium subsidy for a bronze plan, I can save even more money on the premium. Can I also get my cost-sharing reduction through a bronze plan?[1.4.40]

No, you can only get cost-sharing reductions by enrolling in a silver marketplace plan. You will not receive cost-sharing reductions if you enroll in a bronze, gold, or platinum plan. Note that this is different from the rule for premium tax credits. You can apply premium tax credits to all four types of plan. However, if you are eligible for both kinds of help (that is, if your income is between 100 percent and 250 percent of the federal poverty level), you can only receive both types of subsidies if you enroll in a silver plan. (CMS, Actuarial Value and Cost-Sharing Reductions Bulletin, Dec. 16, 2011).

Chapter 5: How Do Premium Tax Credits And Cost-Sharing Reductions Work?

Background

Frequently Asked Questions

Can I get premium tax credits for health plans sold outside of the marketplace?[1.5.1]

No. Premium tax credits are only available for coverage purchased in the marketplace. (26 C.F.R. § 1.36B-2).

Can I use the premium tax credit to reduce the cost of any marketplace health plan?[1.5.2]

You can apply the premium tax credit to any bronze, silver, gold, or platinum plan offered through the marketplace. Premium tax credits cannot be applied to Catastrophic plans. If you are also eligible for cost-sharing reductions, be aware that these can only be obtained through silver plans offered in the marketplace. (26 C.F.R. § 1.36B-2; 26 U.S.C. 5000A (f) and 42 U.S.C. § 18071).

Can I use a premium tax credit and cost-sharing reductions for a separate dental plan?[1.5.3]

Premium tax credits can be applied to a separate dental plan only when a consumer qualifies for a tax credit larger than the total cost of their health plan premium. In this case, any "leftover" tax credit amount may be applied to the part of the dental plan premium that covers essential health benefits (that is, dental benefits for children, but not for adults). However, because the tax credit is calculated based on the cost of the second-lowest-cost silver plan in a marketplace, consumers will likely find there is no “leftover” tax credit unless they purchase a very inexpensive Marketplace plan, such as a bronze plan with a very high deductible. Cost-sharing reductions are not available for stand-alone dental plans. (26 U.S.C. 36B(b)(3)(E); 45 C.F.R. § 156.440).

Should I claim a premium tax credit in advance or at the end of the year or some of both?[1.5.4]

That’s up to you. You can have 1/12 of your annual premium tax credit paid directly to your health plan each month to reduce your monthly premium right away. Or, if you can afford to, you can pay the entire health plan premium yourself up front and collect the premium tax credit in a lump sum next year when your file your tax return. Or you can have some of the tax credit paid directly to your insurer in advance but save some to be collected at year end.

Keep in mind that when you apply for the premium tax credit this fall, during open enrollment, you won’t necessarily know for sure what your income will be for the next year, so you will apply based on your best estimate of your income. Later, when you file your tax return, the IRS will compare your actual income to the amount of premium tax credit you claimed in advance. If you underestimated your income and claimed too much premium tax credit, you might have to pay back some or all of the difference. If you didn’t receive all of the premium tax credit you’re entitled to during the year, you can claim the difference when you file your tax return.

If you’re uncertain about your income, it’s also important to remember that you can modify the amount of premium tax credit during the year if your income changes. So, for example, if you are unemployed now, you can apply for a premium tax credit based on your current low income; then if you get a new job during the year, you must report this increase in income to the marketplace within 30 days, which may reduce the amount of premium tax credit you’re receiving at that time. (26 C.F.R. §1.36B-4; 77 Fed. Reg. 30377, May 23, 2012; 45 C.F.R. § 155.330).

How do I apply for premium tax credits?[1.5.5]

On the health insurance marketplace website, you will find an Application for Health Coverage and Help Paying Costs. You can apply online, submit a paper application, or call your marketplace call center and apply over the phone. The Application will ask you basic information about yourself (and any family members who are applying for coverage with you) including your Social Security number and information about your citizenship or immigration status. It will also ask employment and income information, including what’s on your most recent income tax return. Once you’ve submitted the application, the marketplace will let you know if you qualify for help paying for Qualified Health Plans it offers. It will also let you know if you (or any members of your family) may be eligible for coverage through Medicaid or the Children’s Health Insurance Program.

To complete the Application for Health Coverage and Help Paying Costs online, you will need to create a secure personal account with a login ID and password. (HealthCare.gov, How to apply for health coverage).

What happens if we have different plans for different family members? [1.5.6]

The members of your family can enroll in separate plans in a health insurance marketplace, for example, because a grown child lives in another part of the state or because your spouse needs a plan with a different provider network than the one you choose. The premium tax credit will be allocated to the plans in which different family members enroll. However, you may have higher out-of-pocket costs if you have separate plans (for example, with separate deductibles) as opposed to one family plan (with one deductible for the entire family). (76 Fed. Reg. 50931, Aug. 17, 2011).

I’ve picked the plan I want. Now do I send my premium to the marketplace?[1.5.7]

No, you will make your premium payments directly to the health insurance company. Once you’ve selected your plan, the marketplace will direct you to your insurance company’s website to make the initial premium payment. Insurance companies must accept different forms of payment and they cannot discriminate against consumers who do not have credit cards or bank accounts. The insurance company must receive and process your payment at least one day before coverage begins. Make sure you understand your insurance company’s payment requirements and deadlines and follow them so your coverage begins on time. Your enrollment in the health plan is not complete until the insurance company receives your first premium payment.

Note that if you have qualified to receive an advanced premium tax credit, the government will pay the credit directly to your insurer and you will pay the remainder of the premium directly to the insurer. (77 Fed. Reg. 30377, May 23, 2012).

I don’t have a checking account. Can the insurance company require that I get one and pay my premiums through automatic monthly withdrawals?[1.5.8]

No. Insurers offering coverage in the health insurance marketplace are required to provide a variety of payment methods and cannot require a consumer to pay by automatic bank withdrawals (sometimes called electronic funds transfers, or EFT.) Federal rules require the insurer to accept paper checks, cashier’s checks, money orders, and all general-purpose pre-paid debit cards, as well as EFT. These methods must be available to consumers for both the initial premium payment (at enrollment) and ongoing payments. (45 C.F.R. § 156.1240).

Can I pay my health insurance premium with a credit card, debit card, money order, or cash?[1.5.9]

At least within the health insurance marketplace, insurers are required to accept money orders and pre-paid debit cards. They do not have to accept credit card or debit card payments unless states make that a requirement, although many insurers currently accept all of these forms of payment. Therefore, it may vary from state to state and between insurers. (45 C.F.R. § 156.1240).

Can my brother (or my church) pay my portion of the monthly health insurance premium for me?[1.5.10]

Yes, your brother or your church can make a premium payment on your behalf. (79 Fed. Reg. 15240, March 19, 2014).

What happens if I’m late with a monthly health insurance premium payment?[1.5.11]

The answer depends on whether you are receiving advanced premium tax credits. For people receiving advanced premium tax credits, if a payment due date is missed, insurers must provide a 90-day grace period during which consumers can bring their premium payments up-to-date and avoid having their coverage terminated. However, the grace period only applies if an individual has paid at least one month’s premium.

If, by the end of the 90-day grace period, the amount owed for all outstanding premium payments is not paid in full, the insurer can terminate coverage dating back to the end of the first month of non-payment.

In addition, during the first 30 days of the grace period, the insurer must continue to pay claims. However, after the first 30 days of the grace period, the insurer can hold off paying any health care claims for care received during the grace period, which means the enrollee may be responsible to cover any health care services they receive during the second and third months if they fail to catch up on the amounts they owe before the end of the grace period. Insurers are supposed to inform health care providers when someone’s claims are being held. This could mean that providers may request that you pay out-of-pocket for care or may not provide care until the premiums are paid up so that they know they will be paid. Alternatively, providers may provide care and if your coverage is subsequently terminated, may bill you for the total cost of services. If you pay your premiums in full by the end of the 90 day grace period, your coverage will be reinstated and claims during that time will be paid.

People not receiving advanced premium tax credits are expected to get a much shorter grace period; currently, the general practice is 31 days but it may vary in each state. (45 C.F.R. § 156.270; CMS, FFM and FF-SHOP Enrollment Manual, Setion 6.5; 45 C.F.R. § 155.430(d)(5)).

I’m behind on my payments and trying to catch up, but meanwhile I got sick and so had to make more health care claims. Does my health plan have to pay them? [1.5.12]

If you are receiving advanced premium tax credits, the insurer is required to pay your claims during the first 30 days of the grace period. After that, during the second and third month of the grace period, the insurer is allowed to hold your claims and only pay them if and when you get caught up in your premium payments before the end of your 90-day grace period. (45 C.F.R. § 156.270(d)).

My income is very low, so I’m only required to pay about $30/month for my health insurance premium. The tax credit picks up the rest, which is more than 90 percent of the total premium. I’ve missed four premium payments in a row. Can the insurance company cancel my coverage even though they got 90 percent of the payment on time from the IRS?[1.5.13]

Yes. A person receiving an advanced premium tax credit has a 90-day grace period to pay all premiums that are owed. If the amount owed for all outstanding premium payments is not paid in full by the end of the grace period, the insurer can terminate coverage. The insurer would then have to return funds it received from the federal government for all but the first 30 days of the grace period. (45 C.F.R. § 156.270;CMS, FFM and FF-SHOP Enrollment Manual, Setion 6.5).

How do I project my household size/income for next year if I’m pregnant now? I’m married and this pregnancy will be our first child. We want to find subsidized coverage in the marketplace.[1.5.14]

This fall you and your husband will apply as a household of two. When the baby is born, you must update your family information with the marketplace within 30 days to reflect that you have become a household of three. At that point, you may qualify for a larger premium tax credit. (For example, in 2017, if you and your spouse together earned $30,000, as a household of two you would be required to contribute 6.43 percent of your household income toward the premium, or $193/month, for the benchmark plan in the marketplace. This is because your income falls within 200 percent of the federal poverty level. Once the baby is born and you are a household of three, you would only be required to contribute 4.08 percent of your income, or $122/month). With your income and the expansion of your household, your household will fall within 150 percent of the federal poverty level. When you report your new family status to the marketplace you will also have a 60-day special enrollment opportunity to add the baby to your plan, and you will be able to change health plans during that period if you want to do that. (26 C.F.R. § 1.36B-3; 45 C.F.R. § 155.330).

I’m married now but expect to get divorced this year. What should I indicate as my marital status when I apply for coverage? [1.5.15]

You should indicate that you are married when you apply for coverage, but plan to update your status once your divorce is finalized. While the IRS determines your marital status on the last day of the calendar year, applicants for premium tax credits should provide their current status on their application. (26 CFR §1.36B-4; 77 Fed Reg 30377, May 23, 2012).

Projecting Income for Calculating Advanced Premium Tax Credits
What if I don’t know what my income will be next year?[1.5.16]

When you apply for the premium tax credit, you will be asked to estimate your expected income for the upcoming year. Often a good place to start is to consider what your income is this year, or what income you reported on your tax return last year. However, if your circumstances have changed since then, for example, if you recently lost your job, you should make your best estimate of what your income will be next year. The health insurance marketplace will compare your income estimates against records at the Internal Revenue Service, Social Security Administration and other sources. If your estimate and official records don’t match, but you meet all other eligibility requirements, you will be asked to provide documentation to support your income projections.

If you don’t have that documentation handy, the marketplace will provide premium tax credits for up to 90 days while you gather and submit your documentation for verification.It is very important that you provide any documentation requested by the marketplace in a timely manner; if you don’t, your premium tax credits might be reduced or terminated.

Keep in mind that if you estimate your income incorrectly and end up claiming more help than you are eligible for, you may have to pay back some or all of the premium tax credit you received. If you over-estimate your income and end up claiming less help than you are entitled to, the difference will be refunded to you when you file your income taxes the following year. (45 C.F.R. § 155.320 (c); 45 C.F.R. § 155.310 (k); 45 C.F.R. § 155.320 (c); 26 C.F.R. § 1.36B-4).

My income is uneven during the year. Some months I earn very little, other months are much better. I think my annual income will be low enough to qualify for subsidies next year, but I’m not sure. What if I’m wrong?[1.5.17]

It’s common for income to fluctuate, particularly if you are self-employed, perform seasonal work, or have multiple jobs. To achieve the most accurate premium tax credit amount, you should report income changes to the health insurance marketplace within 30 days. Otherwise, if you claim a premium tax credit during the year and your actual 2015 income edges over 400 percent FPL, you will need to pay back the full credit amount. To avoid this result, if you estimate your income will be close to 400 percent FPL, you could also consider waiting until you file your taxes to take all or a portion of the premium tax credit on your tax return instead of receiving advance payments. (26 C.F.R. § 1.36B-4; 77 Fed. Reg. 30377, May 23, 2012).

What’s the most I would have to repay the IRS?[1.5.18]

That depends on what your actual income turns out to be. If your income goes over 400 percent FPL you will have to repay the full advance premium tax credit amount you received. If your actual modified adjusted gross income is higher than what you projected but less than 400 percent FPL, there are repayment limits based on income. On your tax return, you will compare the actual amount of advance premium tax credit you received during 2015 to the amount you should have received based on your modified adjusted gross income, and then pay back the excess up to the repayment limit. (26 C.F.R. § 1.36B-4; 77 Fed. Reg. 30377, May 23, 2012).

I estimate my income will be 140 percent of the federal poverty level, so I need a premium tax credit and I need to have it all paid in advance. If, by the end of the year, it turns out my annual income was even lower – 130 percent of the federal poverty level — so I could have enrolled in Medicaid, will I have to pay back the premium subsidy?[1.5.19]

No, your final premium credit amount will be determined based on your income for the year as reported on your tax return. The fact that it ended up being 130 percent of the poverty line does not mean you have to pay back the premium tax credit you received. In fact, your final credit amount will likely be larger than the amount you received in advance. (26 C.F.R. § 1.36B-4; 77 Fed. Reg. 30377, May 23, 2012).

How often during the year can I adjust my premium tax credit amount? What documentation is required to make an adjustment? How long after I request the adjustment will it take effect?[1.5.20]

There is no limit to the number of times a person may report income, family or insurance-eligibility changes to the marketplace. Changes that are reported by enrollees will be verified by the marketplace. Then the marketplace will send you a notice (called a redetermination notice) showing your revised eligibility for premium tax credits and cost-sharing reductions. In addition, people can always ask the marketplace to provide them with a monthly advance premium credit below the amount the marketplace determines based on the household’s income if they want to minimize the chance of needing to owe money at the end of the year.

The adjustment will take effect by the first day of the month following the date of the redetermination notice. For example, if an enrollee reports a change in income on June 25 and the marketplace verifies the change and sends a redetermination notice to the enrollee on July 3, the change will be implemented on August 1. (45 C.F.R. § 155.330).

If I request an adjustment in my marketplace premium subsidy, how long will it be before that takes effect?[1.5.21]

The adjustment will take effect by the first day of the month following the date of the redetermination notice. For example, if an enrollee reports a change in income on June 25 and the marketplace verifies the change and sends a redetermination notice to the enrollee on July 3, the change will be implemented on August 1. (45 C.F.R. § 155.330).

Non-Tax Filers and New Tax Filers
I never filed an income tax return before. Can I claim a premium tax credit?[1.5.22]

If this is your first time applying for the premium tax credit, then yes. There is no requirement to have filed a tax return for any prior year in order to qualify for a premium tax credit for the first time. However, there is a requirement to file a return in the year in which you receive a premium tax credit (e.g., if a premium credit is received in 2015, the taxpayer must file a 2015 tax return) and reconcile your premium tax credit. Otherwise, you will not be eligible for premium tax credit in the future. For example, if you received premium tax credits in 2015 and did not file a tax return and reconcile premium tax credits received, you will be not be eligible to receive premium tax credits to help pay for marketplace coverage in 2017. The marketplace will notify you if you are not eligible for premium tax credits because you received premium tax credits in the past and did not file a tax return when your coverage is renewed. The I.R.S. may also contact you to pay back some or all of the premium tax credits you received. (26 C.F.R. § 1.36B-2; CMS, Guidance on Reenrollments and Redetermination for Marketplace Coverage for 2016).

What happens to a young adult who applies for premium tax credits the first year he or she is independent, and so he or she hasn’t filed a return in prior years?[1.5.23]

The biggest challenge a young adult may face in his or her first year of independent tax filing is verifying income, since one of the prime sources of income data is a prior year tax return. However, other methods of verification are available; for instance, the marketplace will have access to monthly wage data that can verify current income. In the case of someone who is self-employed or who has fluctuating income, additional documentation of income may be accepted. The fact that a young adult has not filed in the past will not prevent him or her from receiving premium tax credits when applying for the first time. (45 C.F.R. § 155.320 (c)).

If I’ve not filed taxes in a prior year, how will the marketplace determine my income?[1.5.24]

If an applicant did not file taxes in a prior year, income will be verified by the marketplace through use of electronic wage data. If the information cannot be verified electronically, the applicant may be asked to submit additional paper documentation within 90 days, such as pay stubs, a work contract, or other verification of income. (45 C.F.R. § 155.320 (c)).

Cost-Sharing Subsidies
How much are the cost-sharing subsidies?[1.5.25]

That depends on your income and the plans available in your area. To give a general idea, a typical silver plan might have an annual deductible of $2,000 to $3,000 and an annual out-of-pocket limit on all cost-sharing of $6,500. But if your income is between 100 percent and 150 percent of the federal poverty level, the cost-sharing reductions will modify a silver plan so that the annual deductible might be closer to $0 and the annual out-of-pocket limit on all cost-sharing would be no more than $2,250.

If your income is between 150 percent and 200 percent of the federal poverty level, the cost-sharing reductions will modify the silver plan so that the annual deductible might be around $500 and the annual out-of-pocket limit would be no more than $2,350.

If your income is between 200 percent and 250 percent of the federal poverty level, the cost-sharing reductions will be more modest. At this income level, your annual out-of-pocket limit will be reduced to no more than $5,700.

Check the marketplace website for more information about cost-sharing reductions in silver plans in your area based on your level of income. (42 U.S.C. § 18071; 80 Fed. Reg. 10750, Feb. 27, 2015).

If I underestimate my income and end up earning more than 250 percent of the federal poverty level next year, will I have to pay back the cost-sharing subsidies?[1.5.26]

No. Unlike premium tax credits, which are reconciled each year based on the income you actually earned, cost-sharing reductions are not reconciled. (42 U.S.C. § 18071).

Chapter 6: Comparing Plans: Benefits and Costs

Background

Frequently Asked Questions

What health plans are offered through the marketplace?[1.6.1]

All health plans offered through the marketplace must meet the requirements of “qualified health plans.” This means they will cover essential health benefits, limit the amount of cost-sharing (such as deductibles and co-pays) for covered benefits and satisfy all other consumer protections required under the Affordable Care Act.

Health plans may vary somewhat in the benefits they cover. Health plans also will vary based on the level of cost-sharing required. Plans will be labeled bronze, silver, gold, and platinum to indicate the overall amount of cost-sharing they require. Bronze plans will have the highest deductibles and other cost-sharing, while platinum plans will have the lowest. Health plans will also vary based on the networks of hospitals and other health care providers they offer. Some plans will require you to get all non emergency care in-network, while others will provide some coverage when you receive out-of-network care.

Beginning in 2017, marketplaces will offer “Simple Choice Plans” at each metal level. Simple Choice Plans at each metal level will have standardized benefits with the same fixed deductible, out-of-pocket costs, and cost-sharing amounts. The purpose of these “Simple Choice Plans” is to simplify the consumer shopping experience since consumers will know that certain features like the deductible and cost-sharing amounts under such plans will be the same within a metal tier. Simple choice plans also cover some important services before the deductible, such as primary care, generic drugs, and some specialty services. (45 C.F.R. Part 156; 45 C.F.R. § 156.140; 45 C.F.R. §§ 156.130 and 156.230; 81 Fed. Reg. 12204, Mar. 8, 2016).

I heard marketplace plans have to cover certain health benefits referred to as essential. What are essential health benefits? [1.6.2]

All qualified health plans offered in the marketplace (as well as non-grandfathered individual plans sold outside the marketplace) will cover essential health benefits. Categories of essential health benefits include:

  • Ambulatory patient services (outpatient care you get without being admitted to a hospital)
  • Emergency services
  • Hospitalization
  • Maternity and newborn care (care before and after your baby is born)
  • Mental health and substance use disorder services, including behavioral health treatment
  • Prescription drugs
  • Rehabilitative and habilitative services and devices (services and devices to help people with injuries, disabilities, or chronic conditions gain or recover mental and physical skills)
  • Laboratory services
  • Preventive and wellness services and chronic disease management
  • Pediatric services, including dental and vision care

The precise details of what is covered within these categories may vary somewhat from plan to plan. (45 C.F.R. § 147.150).

Will my marketplace health plan cover dental benefits?[1.6.3]

Some marketplace health plans offer coverage of dental benefits and others do not. In addition, all marketplaces offer separate, stand-alone dental plans for children and often for adults, as well. Consumers who wish to have dental coverage should examine whether the plans they are comparing include coverage for dental benefits. Those who purchase a stand-alone dental plan should be aware that a separate plan means separate premiums, deductibles, co-pays, and a separate limit on total out-of-pocket costs. (45 C.F.R. § 155.1065).

Will covered benefits under all marketplace plans be the same? How can I compare?[1.6.4]

In general, marketplace health plans are required to cover the 10 categories of essential health benefits. However, insurers in many states will have flexibility to modify coverage for some of the specific services within each category. Any modifications must be approved by the marketplace before plans can be offered. All health plans must provide consumers with a Summary of Benefits and Coverage (SBC). This is a brief, understandable description of what a plan covers and how it works. The SBC will also be posted for each plan on the marketplace website. The SBC will make it easier for you to compare differences in health plan benefits and cost-sharing.

Plans might differ in other ways, too. For example, the network of health providers might be different from plan to plan.

In 2017, some insurers may offer “Simple Choice Plans” in some states. For these plans, the covered benefits will have the same fixed deductible, out-of-pocket costs and cost-sharing amounts for certain services. In particular, certain services, such as primary care, generic drugs, and some specialty care services may be covered under the deductible. (45 C.F.R. §§ 156.110, 156.115; 45 C.F.R. § 156.200; 45 C.F.R. § 147.200(a)(2)(i)(G); 45 C.F.R. § 156.230; 81 Fed. Reg. 12204, Mar. 8, 2016).

I notice marketplace plans are labeled “bronze,” “silver,” “gold,” and “platinum.” What does that mean?[1.6.5]

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 coinsurance. 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. (45 C.F.R. § 156.130; 45 C.F.R. § 147.130; 45 C.F.R. § 156.140).

How can I find out if my doctor is in a health plan’s network ?[1.6.6]

Each plan sold in the marketplace must provide a link on the marketplace website to its health provider directory so consumers can find out if their health providers are included. Health plans are also required to update their provider lists at least once a month. However, as an extra measure, you may want to confirm your provider is “in-network” if it matters to you or if the cost-sharing you’d be required to pay for “out-of-network” care is significant.

The provider network information from insurance companies must also tell you whether a provider is accepting new patients or whether a provider speaks your language. (45 C.F.R. § 156.230; 80 Fed. Reg. 10750, Feb. 27, 2015).

How can I find out if a health plan covers the prescription drugs that I take?[1.6.7]

Health plans in the marketplace must include a link to their prescription drug “formulary” (a list of covered drugs) with other on-line information about prescription drug coverage such as tiering structures and whether any restrictions exist to accessing covered drugs. The "formulary" should be easily accessible meaning that it can be viewed on the health plan's public web site through a clearly identifiable link or tab without creating an account or entering a policy number. The health plan must provide the "formulary" for the health plan and not a general list for the insurer. If you don’t find your drug on the formulary but your doctor says it’s medically necessary for you to take that specific drug, you can apply for an exception to the plan formulary. (45 C.F.R. § 156.122).

Is dental coverage an essential health benefit?[1.6.8]

Under the health care law, dental insurance is treated differently for adults and children 18 and under.Dental coverage for children is an essential health benefit. This means it must be available to you, either as a covered benefit under your health plan or as a free-standing plan. This is not the case for adults. Insurers don’t have to offer adult dental coverage. (45 C.F.R. § 156.110 and § 155.1065).

I’m buying coverage on the marketplace for my family. I notice many health plans don’t cover pediatric dental care, but there are also stand-alone dental plans for sale. Is that allowed?[1.6.9]

Each health insurance marketplace can decide whether to require all insurers to cover pediatric dental benefits or whether to allow the sale of stand-alone dental policies. When stand-alone dental policies are allowed, health insurers in the marketplace might not be required to cover pediatric dental benefits. If your health plan covers dental benefits, you will pay one premium for everything. If you get dental benefits through a stand-alone plan, you will have to pay a separate premium for the dental benefits. (45 C.F.R. § 155.1065).

It looks like pediatric dental benefits are only offered through stand-alone plans in my state marketplace. Will my tax credit premium cover the cost of the stand-alone dental plan?[1.6.10]

No, the premium tax credit will not be increased to also cover the cost of a stand-alone dental plan. (45 C.F.R. § 156.440).

I can’t afford the cost of a stand-alone dental plan in addition to buying major medical health insurance. Will I owe a penalty for not having minimum essential coverage if I don’t buy the separate dental plan?[1.6.11]

No. You do not need to have pediatric dental coverage to avoid the penalty. (See 78 Fed. Reg. 12834, Feb. 25, 2013).

Most of my doctors are in-network but not all. Can I get care out-of-network?[1.6.12]

If you see a provider that is not included in your plan’s contracted network of providers (i.e., “out-of-network”), depending on your plan, that care may or may not be covered. Either way, you are likely to pay more for that care. You may have a separate deductible to meet for out-of-network care, and/or be required to pay higher co-payments or coinsurance for the care you receive. It’s important to note that the limit on out-of-pocket costs that plans must meet applies only to services received in-network. Any care you get outside your plan’s network will not apply to the limit set in law (in 2017, $7,150 for individuals, $14,300 for families) and may not have any limit at all. (81 Fed. Reg. 12204, Mar. 8, 2016).

Catastrophic Plans
What is a Catastrophic Health Plan?[1.6.13]

A “Catastrophic Plan” is a qualified health plan offered through the marketplace that covers essential health benefits and requires the highest level of cost-sharing allowable for essential health benefits. In 2017, under a “catastrophic policy,” the annual deductible for covered services is $7,150 for an individual ($14,300 for a family policy.) After you have satisfied the deductible, the plan will pay 100 percent for covered essential health benefit services for the remainder of the year. “Catastrophic policies” may also be sold by insurers outside of the health insurance marketplace. Not everybody will be allowed to buy Catastrophic Plans. They are only for adults up to age 30, and for older people who can’t find any other marketplace policy that costs less than 8.13 percent of their projected income in 2016 (8.16 percent in 2017). (45 C.F.R. § 156.155; 81 Fed. Reg. 12204, Mar. 8, 2016).

Who can buy a Catastrophic Plan?[1.6.14]

In general, only young adults up to the age of 30 are eligible to buy a Catastrophic Plan. However, older adults can buy a Catastrophic Plan if no other qualified health plan offered through the marketplace would cost less than 8.13 percent of projected income (8.16 percent of income in 2017). This includes older adults whose health insurance policies have been cancelled because they are not compliant with the Affordable Care Act. (45 C.F.R. § 156.155).

If I qualify for a premium tax credit, can I use that to reduce my cost of a Catastrophic Plan?[1.6.15]

No. Catastrophic Health Plans are not eligible for premium tax credits or cost-sharing reductions. (45 C.F.R. § 155.305).

Multi-State Plans
What is a Multi-State Plan?[1.6.16]

The Multi-State Plan program was established under the Affordable Care Act to provide people with additional coverage options in the health insurance marketplace. A Multi-State Plan is one that has been approved to participate on the health insurance marketplace by a federal government agency, the U.S. Office of Personnel Management. This is the same agency that administers the health plan for federal government employees. (45 C.F.R. Pt 800).

Are Multi-State Plans available in every state?[1.6.17]

In 2015, there were Multi-State Plans in 35 states and the District of Columbia, but by 2017 the law requires that all 50 states have Multi-State Plans. (OPM, Multi-State Plan Program and the Health Insurance Marketplace).

Are Multi-State Plans available in and out of the Marketplace?[1.6.18]

No. Multi-State Plans may only be sold through the health insurance marketplace. (45 C.F.R. § 800.10).

If I sign up for a Multi-State Plan and then need to get care while I’m in a different state, can I count on being able to find in-network providers in another state?[1.6.19]

Not necessarily. In 2014, Multi-State Plans were offered through the Blue Cross Blue Shield Association. In 2015, some Health Cooperatives were also offering Multi-State Plans in addition to Blue Cross Blue Shield Association. Some Multi-State Plans will reimburse as “in-network” care rendered by providers in other state Blue Cross Blue Shield plan networks, but others may not. This information should be provided in the description of the Multi-State Plan’s features on your state’s health insurance marketplace. (45 C.F.R. § 800.109).

Marketplace Health Plan Premiums – General
Can I be charged more if I have a pre-existing condition?[1.6.20]

No. Starting in 2014, as insurance policies are sold or renewed, health plans are not allowed to charge you more based on your health status or pre-existing condition. (45 C.F.R. § 147.108).

Can I be charged more because of my age?[1.6.21]

Yes, in most states you can, within limits. Federal rules allow insurers to charge older adults (e.g., in their sixties) up to three times the premium they would charge younger adults (e.g., in their early twenties). (45 C.F.R. § 147.102(a)(1)(iii)).

I’m 59, my wife is 55, and our kids are 24, 17, 15, and 13. What age premium will we be charged for health insurance in the marketplace?[1.6.22]

Family premiums will reflect the composition of family members, their ages and their tobacco use. To compute a “family premium,” insurers will add together a separate premium for each adult age 21 and older. In addition, insurers can charge a separate premium for up to three children under age 21. In your example, your family premium will reflect three adult premiums and three child premiums. (45 C.F.R. § 147.102).

Premiums – the Tobacco Surcharge
What does it mean to “use tobacco?” I’m pretty sure my teenager has smoked at least a couple of times. Do I have to pay a higher rate because of her? [1.6.23]

“Tobacco use” means a person has used a tobacco product an average of four or more times per week for the past six months. A state can increase the number of times per week or reduce the “look-back” period to less than six months. Check with your state marketplace to learn more about tobacco surcharges and how they work.

The surcharge on tobacco users can only be applied to an individual who can legally purchase a tobacco product in the state. Thus, the surcharge does not generally apply to a person under age 18. (45 C.F.R. § 147.102(a)(1)(iv); 78 Fed. Reg. 13406, Feb. 27, 2013).

I smoke cigarettes and I buy my own health insurance. Can I be charged more because I smoke?[1.6.24]

Yes, in most states you can. Insurers are allowed to increase premiums by up to 50 percent more for people who use tobacco, although many insurers apply a lower surcharge for tobacco use. If you qualify for premium tax credits, this tobacco surcharge will not be covered by the tax credit. States are allowed to limit tobacco surcharges and a few have decided to prohibit tobacco rating by health insurers. (45 C.F.R. § 147.102(a)(1)(iv); 78 Fed. Reg. 13406, Feb. 27, 2013).

My income is less than 400 percent of the federal poverty level and I smoke. Will the tobacco surcharge to the premium be covered by my premium tax credit? [1.6.25]

No. A tobacco surcharge is not covered by the health insurance premium tax credits. The premium tax credit will reduce what you have to pay for the regular health insurance premium, but you will have to pay the entire additional tobacco surcharge. For example, if the regular premium for a policy is $200 per month and you qualify for a premium tax credit of $75 but you also use tobacco and so would be subject to a 50 percent tobacco use surcharge, you would have to pay $225 for that policy ($200 for the regular premium minus $75 for your premium tax credit plus $100 for the tobacco surcharge).

The tobacco surcharge makes my health insurance unaffordable so I can’t buy coverage. Even after taking into account the tax credit, my premium will cost more than 8 percent of my income. Will I owe a penalty?[1.6.26]

No. If the cost of health insurance, taking into account both your premium tax credit and the tobacco surcharge, exceeds 8.13 percent of your income (8.16 percent in 2017), you are not subject to the penalty for failure to obtain insurance. (26 U.S.C. § 5000A (e)(1)).

What happens if I don’t disclose to an insurance company that I use tobacco?[1.6.27]

If you report inaccurate or false information about your tobacco use on an application, an insurer is allowed to retroactively impose the tobacco surcharge to the beginning of the plan year. However, the insurer is not allowed to cancel your coverage because of the false or incorrect information. (78 Fed. Reg. 13406, Feb. 27, 2013; IRS, Proc. 2014-37, July 24, 2014).

What happens if I take up smoking after I bought the policy?[1.6.28]

You would be subject to the tobacco surcharge when you renew your plan the following year. (78 Fed. Reg. 13406, Feb. 27, 2013).

Chapter 7: Outside the Health Insurance Marketplace

Background

Frequently Asked Questions

Outside the Marketplaces: Buying Non-Group Health Insurance
If I buy an individual health plan outside the health insurance marketplace, is my coverage going to be the same as it would be inside the marketplace?[1.7.1]

For the most part, yes. Health plans inside and outside the health insurance marketplace must provide the same basic set of benefits, and they are no longer allowed to exclude coverage of a pre-existing condition. In addition, plans both inside and outside must provide a minimum level of financial protection to their policyholders. Specifically, plans must cover at least 60 percent of what the average person would spend on covered benefits and there is a cap on the maximum amount you will pay out of pocket ($7,150 for an individual and $14,300 for a family in 2017).

There are some key differences between plans sold inside and outside the health insurance marketplace. First, you may only obtain premium tax credits and cost-sharing reductions through the health insurance marketplace. Second, plans sold through the health insurance marketplace must be certified by the marketplace as meeting minimum coverage and quality standards. Plans sold outside the marketplace may not always meet those standards particularly if the plan is grandfathered or otherwise doesn't need to comply with ACA protections (i.e., grandmothered or transitional plans). See ACA Consumer Protections for Private Coverage in Other Resources for more information about grandfathered and grandmothered plans. (45 C.F.R. § 147; 26 U.S.C. § 36B; 45 C.F.R. § 156.130; 81 Fed. Reg. 12204, Mar. 8, 2016).

Why should I buy a plan on the health insurance marketplace?[1.7.2]

First, depending on your income, you may be eligible for premium tax credits or cost-sharing reductions to help lower the cost of coverage. You can only obtain those tax credits and cost-sharing reductions if you buy a plan through the health insurance marketplace.

Second, if you use the health insurance marketplace, you can compare plans and shop with confidence that all the plans displayed have been certified as meeting a minimum standard for coverage and quality. Plan comparison is also easier with "Simple Choice Plans" that are offered on the marketplaces. These plans have standardized benefits with set amounts for deductibles, cost-sharing and masximum out-of-pocket costs across each metal level. For more on "Simple Choice Plans," see FAQ 1.6.6.

Third, if you experience an income change during the year that makes you eligible for financial assistance, you will only be eligible to enroll in a plan with financial help if you are already enrolled in a marketplace plan. If you are uninsured or enrolled in an off-marketplace plan, an income change alone will not qualify you for a special enrollment period. (45 C.F.R. § 156.440; 45 C.F.R. §§ 156.200 to 298).

When can I buy coverage outside the health insurance marketplace?[1.7.3]

You will have an opportunity to enroll in a health plan during open enrollment period that for 2017 coverage runs from November 1, 2016 to January 31, 2017. You may also be eligible to enroll in a plan during a special enrollment period.

NOTE: Some states may allow for longer or additional open enrollment periods. (HealthCare.gov; Important Marketplace deadlines).

If I buy a plan outside the health insurance marketplace, how do I know it is minimum essential coverage so I don’t have to pay a tax penalty?[1.7.4]

To meet the coverage requirement, individuals must have “minimum essential coverage.” Most people that have health coverage today have a plan that will count as minimum essential coverage, and will not need to do anything more than continue the coverage that they have. If you have any of the following coverage, you likely have minimum essential coverage:

  • Employer sponsored coverage, including COBRA continuation coverage and retiree coverage
  • Coverage purchased in the individual market, including a plan purchased in a health insurance marketplace
  • Medicare Part A coverage and Medicare Advantage Plans
  • Most Medicaid coverage
  • Most Children’s Health Insurance Program coverage
  • Veteran’s health coverage administered by the Veterans Administration that are comprehensive
  • Most types of TRICARE (coverage for members of the military)
  • Self-funded student health coverage that began on or before Dec. 31, 2014 (for later plan or policy years, programs can apply to be recognized as minimum essential coverage)
  • State high-risk pool coverage established on or before Nov. 26, 2014 (for later plan or policy years, programs can apply to be recognized as minimum essential coverage)
  • Coverage for Peace Corps volunteers
  • Refugee Medical Assistance from the federal Administration for Children and Families
  • Department of Defense health benefit program for civilian employees known as “non-appropriated fund” personnel

If you don’t currently have coverage, will soon lose coverage, or are thinking of changing coverage, you can obtain minimum essential coverage by purchasing a plan on your state’s health insurance marketplace. You can also buy a traditional individual or family health insurance policy outside of the marketplace, but be aware that some types of coverage do not qualify as minimum essential coverage, such as discount plans, fixed indemnity plans , or plans that provide coverage only for a specific disease (i.e., cancer-only). Such plans are required to notify you if they don’t qualify as minimum essential coverage. If you receive such a notice, you may have to pay a tax penalty for not having adequate coverage.

If you are uncertain whether your plan qualifies as minimum essential coverage, contact your employer’s human resources department or your health insurer. (26 U.S.C. § 5000A (f)(1); 79 Fed. Reg. 4302, Jan. 27, 2014).

What are health care sharing ministries? What are the risks and benefits of signing up for one?[1.7.5]

It is important to understand that a health care sharing ministry is not health insurance, and may not provide the kind of financial protection you can obtain through a health plan on the health insurance marketplace. However, if you are a member of a health care sharing ministry, you are exempt from the tax penalty for failing to maintain minimum essential coverage.

Typically health sharing ministries operate by having all of their members pay a monthly “share” or fee. Those fees are then used to pay other members’ medical bills, if they qualify and if the reason for needing care was not due to “un-Christian” behavior. Names and the current needs of members are published in a monthly newsletter, and members are able to support each other financially and through prayer.

Health care sharing ministries do not have to comply with the consumer protections outlined in the Affordable Care Act, and many states have exempted them from the state’s insurance laws. As a result, consumers could be at greater financial risk in these programs than they would be in traditional insurance. In particular, if there’s a dispute between you and the heath care sharing ministry about covered benefits, or if you’re having trouble getting your medical bills paid, many state insurance regulators do not have jurisdiction to help you.

NOTE: Many states have exempted health care sharing ministries from state health insurance rules. (26 U.S.C. § 5000A (d)(2)(A) and (B); 78 Fed. Reg. 39494, July 1, 2013).

What is a discount medical plan? What are the risks and benefits of buying one?[1.7.6]

A discount medical plan is not health insurance, and will not provide the kind of financial protection that you can obtain through a health plan on the health insurance marketplace. Companies selling these plans are supposed to notify their policyholders that the plan does not qualify as minimum essential coverage under the Affordable Care Act, meaning the consumer could be required to pay a tax penalty if they do not obtain health insurance. However, consumers should be aware that some of these discount plans may use marketing materials that suggest they provide traditional insurance.

Generally, consumers who sign up for a discount plan must pay an upfront enrollment fee plus a monthly subscription. In exchange, the plan offers discounts on medical services from doctors, hospitals and dentists. However, a number of state insurance regulators have had to shut down these plans because of fraudulent activity, and often the discounts they provide are no better than what you could negotiate on your own. Consumers who suspect that a discount plan is falsely advertising itself as health insurance should report the company to the State Department of Insurance. (45 C.F.R. § 147.200(a)(2)(i)(G); 77 Fed. Reg. 8668, Feb. 14, 2012; National Conference of State Legislatures, Health Care Discount Plans: State Role and Regulation, material added Jan. 2012).

What is a mini-med (or limited benefit) plan? What are the risks and benefits of buying one?[1.7.7]

A mini-med plan is a type of health insurance, but it comes with a low annual or lifetime dollar limit on benefits. Its sale to individuals is banned under the Affordable Care Act. If you believe you are enrolled in or are sold a mini-med plan, contact your state insurance department. You can also call the federal toll free help line at 1-800-318-2596. (45 C.F.R. § 147; CMS, Annual Limits Policy, Protecting Consumers, Maintaining Options, and Building a Bridge to 2014.

An agent offered me a policy that pays $100 per day when I’m in the hospital. It’s called a “fixed indemnity plan.” What are the risks and benefits of buying one?[1.7.8]

A fixed indemnity plan is not traditional health insurance and enrollment in one does not constitute minimum essential coverage under the Affordable Care Act. These companies are supposed to provide policyholders with a notice that the coverage is not minimum essential coverage. If you have one of these plans and no other coverage, you will be subject to the law’s tax penalty for failing to have health insurance.

Historically, fixed indemnity policies have been income replacement policies, to help compensate people for time out of work. The plan will provide a fixed amount of money per day or over a set period while the policyholder is in the hospital or under medical care. The amount provided is often far below the patient’s actual costs. Thus, consumers can find that they pay more in premiums than they get in return. Consumers who suspect that a fixed indemnity plan is falsely advertising itself as health insurance should report the company to the state department of insurance. (See Other Resources for a list of state Departments of Insurance). (45 C.F.R. § 147.200(a)(2)(i)(G); 77 Fed. Reg. 8668, Feb. 14, 2012; 79 Fed. Reg. 30240, May 27, 2014; CMS, ACA Implementation FAQs-Set 11).

My insurance company is offering me a short-term policy (less than 365 days of coverage). The premiums are a lot lower than they would be for a 12-month policy. What are the risks and benefits of enrolling in a short term policy?[1.7.9]

A short-term insurance policy, which is defined as a policy that covers you for less than a 12-month period, is not considered traditional health insurance and does not constitute minimum essential coverage under the Affordable Care Act. If you are enrolled in one of these plans, even if it lasts 364 days, you will be subject to the law’s tax penalty for failing to have health insurance. In addition, short-term policies are exempt from many of the Affordable Care Act’s consumer protections, and as a result the policy may not provide the kind of access to health services and financial protection that you may need or want. You should carefully review the terms of the policy and any limits or exclusions before purchasing it. (45 C.F.R. § 144.103; 77 Fed. Reg. 16454, March 21, 2012; 26 U.S.C. § 5000A).

Section 2

Section 2 covers enrollment issues for individuals who have coverage or an offer of coverage—whether through an employer-sponsored plan, individual plan, high-risk pool, retiree plan, or student health plan—and want to understand their options, including eligibility for premium tax credits through the marketplace.

Chapter 1: Individual and Marketplace Health Coverage

Background

Frequently Asked Questions

I have my own health insurance. Why should I consider shopping for a new plan on the health insurance marketplace?[2.1.1]

If you use the health insurance marketplace, you can compare plans and shop with confidence that all the plans displayed have been certified as meeting a minimum standard for coverage and quality, and will qualify as “minimum essential coverage” to avoid the tax penalty. If you shop for a plan outside the health insurance marketplace, you will need to do your own research to determine whether the plan provides the kind of financial protection and access to providers that is right for you and your family.

Second, premium tax credits and cost-sharing reductions to help lower the cost of coverage are only available through plans purchased in a health insurance marketplace. In addition, even if you are not currently eligible for premium tax credits, if you have a change in household income that may make you eligible for premium tax credits and cost-sharing reductions later in the year, you can only enroll in the subsidies outside the annual open enrollment period if you already have coverage through a health insurance marketplace. (26 U.S.C. § 5000A; 45 C.F.R. § 156.200; 26 U.S.C. §36B; 42 U.S.C. § 18071).

Can I buy or change private health plan coverage outside of open enrollment?[2.1.2]

In general, you can only sign up for private, non-group coverage during an open enrollment period, unless you experience a life event that qualifies you for a special enrollment period.  Some events that trigger a special enrollment opportunity are:

  • Loss of other coverage (for example, if you lose your employer-sponsored coverage because you quit your job, were laid off, or if your hours were reduced, or if you lose student health coverage when you graduate). Note that loss of coverage because you didn’t pay premiums does not trigger a special enrollment opportunity.
  • Gaining a dependent (for example, if you get married or give birth to or adopt a child). Note that pregnancy does NOT trigger a special enrollment opportunity.
  • Marriage.
  • Loss of dependent status (for example, “aging off” a parent’s plan when you turn 26) or death of an enrollee or dependent.
  • Moving to another state or within a state and you gain access to new plans as long as you had qualifying health coverage for one or more days during the 60 days before the move (does not apply if moving from outside of the U.S.).
  • Exhaustion of COBRA coverage; voluntarily dropping COBRA coverage outside of open enrollment will not trigger a special enrollment period.
  • Losing eligibility for Medicaid or the Children’s Health Insurance Program.
  • For people enrolled in a marketplace plan, income increases or decreases sufficient to change eligibility for premium tax credits and/or cost-sharing reductions.
  • For people who live in a state that did not expand Medicaid, but would otherwise be eligible, income increases to change eligiblity for premium tax credits and/or cost-sharing reductions.
  • Change in immigration status from a non-eligible status to an eligible one.
  • Enrollment or eligibility error made by the marketplace or another government agency or somebody, such as an assister, acting on their behalf.

Note that some triggering events will only qualify you for a special enrollment opportunity in the health insurance marketplace; they do not apply in the outside market. For example, if you gain citizenship or lawfully present status, the marketplace must provide you with a special enrollment opportunity.When you experience a qualifying event, your special enrollment opportunity will last 60 days from the date of that triggering event. The marketplace will ask you to provide verifying documents for the following special enrollments: loss of minimum essential coverage, moving, marriage, birth, and adoption. You will have 30 days to submit the documentation or the marketplace may terminate your coverage. The list of verifying documents for each type of applicable special enrollment can be found here.

States have flexibility to expand special enrollment opportunities for consumers. For example, some state-based marketplaces allow a special enrollment in the case of divorce. Check with your marketplace for more information. (45 C.F.R. § 155.420; CMS Fact Sheet: Strengthening the Marketplace - Actions to Improve the Risk Pool, June 8, 2016).

An agent offered to sell me a policy that pays $100 per day when you’re in the hospital. Does that count as minimum essential coverage?[2.1.3]

No. Some types of coverage do not qualify as minimum essential coverage. These include hospital indemnity policies (that pay a fixed dollar amount per day when you are hospitalized), discount plans, short-term nonrenewable policies, or plans that provide coverage only for a specific disease (i.e., cancer-only policies). Companies that sell these products, also called “excepted benefits,” are required to notify you if they don’t qualify as minimum essential coverage. If you receive such a notice, and don’t obtain other coverage that is minimum essential coverage, you may have to pay a tax penalty. (26 U.S.C. § 5000A; 45 C.F.R. 147.200).

What is a grandfathered plan? How do I know if I have one?[2.1.4]

Grandfathered plans are those that were in existence on March 23, 2010 and have stayed basically the same in terms of benefits and cost-sharing. If you buy coverage on your own and you first purchased your policy prior to March 23, 2010, it may be a grandfathered plan. If you first purchased the policy after that date, it is not grandfathered. If your non-grandfathered policy came up for renewal in 2014, it would have had to change to follow all the new rules required of other health plans. However, some non-grandfathered plans renewed late in 2013 in order to avoid complying with the Affordable Care Act’s protections, so check your renewal date if you’re not sure. If you currently are covered under a non-group policy – whether it is grandfathered or not – starting November 15, 2014, you can also explore other qualified plans offered through the marketplace and, if you prefer, you can switch to one of the new plans during open enrollment. To be eligible for a tax credit to help pay your premium – which will be based on your income – you must enroll in a plan offered through the marketplace.

Some group plans offered by employers may also be grandfathered plans. A grandfathered group plan also must have been first established prior to March 23, 2010. To retain grandfather status, the group plan cannot be significantly changed (that is, the employer can’t significantly change covered benefits or cost-sharing, or the share of the plan premium that you are required to contribute). Meanwhile, however, grandfathered plans are not required to provide all of the benefits and consumer protections required of other health plans. For example, a grandfathered health plan might not cover preventive health services. Employers with grandfathered group health plans are allowed to enroll new employees in the grandfathered plan. So even if you first joined a group health plan after March 23, 2010, you should ask about its grandfathered status. Your employer or your insurer must let you know if your health plan is grandfathered.

Your employer may also have renewed its group health plan late in the fourth quarter of 2013 in order to avoid complying with the full range of Affordable Care Act consumer protections, which went into effect on January 1, 2014. If you wish to know whether your employer-based coverage meets the requirements under the Affordable Care Act, check with your human resources department. (75 Fed. Reg. 34538, June 17, 2010).

I have had the same insurance policy since 2013 because the premiums are lower than the new plans that must comply with the Affordable Care Act. Now my insurance company is offering me the option to renew my current policy again. What are the pros and cons of doing that?[2.1.5]

In most states you have the option to renew that policy (often referred to as "transitional" or "grandmothered" policy, see FAQ 3.1.7 for more information about this type of policy). However, your policy may be exempt from many of the Affordable Care Act’s market reforms, including the essential health benefits standard and the prohibition on health status discrimination. You also may be ineligible for the premium tax credits and cost-sharing reductions because those are only available through the health insurance marketplace. Before you renew your policy, you should check your eligibility for premium tax credits via the health insurance marketplace and compare your health plan options. Even without financial assistance, you may find a more affordable option that provides the full range of consumer protections granted under the Affordable Care Act.. Individuals should take the time to compare all of their options before making a decision.

NOTE: Some states have prohibited insurers from renewing policies that were renewed in 2013. If you’re not sure whether your insurer is complying with state law, check with your state’s Department of Insurance. States can allow these types of health plans to continue to be renewed until October 1, 2017; however, transitional policies cannot extend past December 31, 2017. (CMS, Insurance Standards Bulletin Series - Extension of Transitional Policy Through Calendar Year 2017).

What if I sign up for a plan and change my mind. Can I switch my plan during open enrollment?[2.1.6]

Yes, you can change plans for the 2017 benefit year anytime during Open Enrollment regardless of when coverage was effectuated. Open Enrollment is scheduled to end January 31, 2017. After open enrollment, you can only change plans once your coverage has taken effect if you have a change in circumstance qualifying you for a Special Enrollment Period. See this FAQ for more on events that trigger a special enrollment period. (45 C.F.R. § 155.420).

How do I know that the coverage I have counts for purposes of the individual responsibility requirement (individual mandate)? [2.1.7]

All health insurers and employer-sponsored group health plans must provide people with a Summary of Benefits and Coverage, which uses a standard format to outline the benefits, cost-sharing and coverage limits of plans. The Summary of Benefits and Coverage must also say whether the plan meets minimum value and counts as minimum essential coverage. (45 C.F.R. § 147.200).

I’m in a grandfathered plan that doesn’t cover prescription drugs. Does that count as minimum essential coverage?[2.1.8]

Yes, grandfathered plans count as minimum essential coverage. (26 U.S.C. § 5000A).

If I switch plans, how do I make sure I can keep my doctor?[2.1.9]

Health insurers participating on the health insurance marketplaces must provide consumers shopping for coverage with a directory of their in-network providers. However, these lists can quickly become out of date and may not contain the most current and accurate list of participating providers. Furthermore, you can incur significantly higher out-of-pocket costs if you obtain services outside your plan’s network. Therefore, if you have a provider that you really want to keep seeing, you should contact the provider and confirm that they participate in the plans you’re considering. (45 C.F.R. § 156.230(b)).

If I switch plans, how do I make sure the drug I am taking is covered under the new plan?[2.1.10]

All health insurers must make the formulary or list of covered drugs available to consumers on their websites. Consumers should be able to easily access a health plan’s formulary on an insurer’s website without creating an account or entering a policy number to access the information. In addition, the website link to the formulary should also be included in the Summary of Benefits and Coverage, which provides information on the covered benefits and applicable cost-sharing amounts, and on the marketplace website. (45 C.F.R. § 147.200; 80 Fed. Reg. 10750, Feb. 27, 2015).

When I graduated from college I bought a short-term policy that will help fill the gap until I get a job with health benefits. Does my short-term plan satisfy the individual responsibility requirement (individual mandate)?[2.1.11]

No, short term policies are not required to meet the Affordable Care Act consumer protections and do not count as minimum essential coverage. Therefore, if you remain enrolled in the short term policy, you may face a tax penalty. However, you can enroll in a plan on the health insurance marketplace during the open enrollment period and drop that plan if and when you become eligible for employer-sponsored coverage. Be aware that if you don’t enroll in a plan on the health insurance marketplace and wait until your short-term policy expires, you will not be entitled to a special enrollment opportunity and will have to wait until the next open enrollment period to enroll. (26 U.S.C. § 5000A).

I have health insurance through an association. How do I find out if my coverage qualifies as minimum essential coverage?[2.1.12]

It is likely you have minimum essential coverage, because association health plans should meet the same standards as those required of an individual health insurance policy. If you are not sure whether your association’s plan qualifies as minimum essential coverage, contact your plan administrator. (CMS, Insurance Standards Bulletin Series – Information, Application of Individual and Group Market Requirements under Title XXVII of the Public Health Services Act when Insurance Coverage is Sold to, or Through, Associations, Sept. 1, 2011).

I own my own business and have no employees, what are my options?[2.1.13]

While you are not eligible to purchase small group health insurance through the SHOP marketplace, you can purchase individual market coverage and may be able to qualify for financial assistance through the health insurance marketplace for individuals. (45 C.F.R. § 155.710).

I got a notice that my plan will be cancelled or terminated. What are my options? [2.1.14]

You can either purchase a plan through the Marketplace, which will have plans that provide coverage for ten categories of health services referred to as essential health benefits and other consumer protections. You may also be eligible for financial assistance when you purchase a plan through the Marketplace. See this FAQ on additional information about financial assistance. Another option is to purchase a plan outside of the Marketplace, although you won’t receive financial assistance. If your employer offers health insurance and you are eligible, you can get coverage through your employer; however, you will have to wait until your company’s open enrollment period.

I've been told I should look for a Health Savings Account (HSA) compatible plan on the health insurance Marketplace. What is an HSA-compatible plan and what are the pros and cons of enrolling in one? [2.1.15]

An HSA-compatible plan is a “High Deductible Health Plan” (HDHP) with an annual deductible that is not less than $1,300 for self-only coverage and $2,600 for family coverage in 2017. Maximum out-of-pocket expenditures cannot be more than $6,550 for an individual or $13,100 for a family. However with family coverage, current rules require that the maximum out-of-pocket expenditure for any individual family member cannot be more than $6,550.

The benefit of a HDHP is lower monthly premiums, but the disadvantage is that in the event that you become ill, this high deductible means that your health insurance does not kick in until you have paid that amount out-of-pocket. High deductible plans can be beneficial if you don’t anticipate incurring health expenditures regularly, but is risky if you or someone covered under your family plan becomes very ill. This type of plan is often recommended for younger and healthier individuals. (IRS, Rev. Proc. 2016-28; HHS, Labor, and Treasury Depts., FAQs on Implementation of ACA-Set 27).

I'm interested in enrolling in a Health Savings Account (HSA)-compatible plan and opening up an HSA. My income is less than 250% of the federal poverty level and I qualify for cost-sharing help through the Marketplace. Can I still have an HSA? [2.1.16]

Possibly. You must have an HSA-compatible health plan to have an HSA. However, because you are under 250 percent of the federal poverty level, you qualify for cost-sharing reductions that could make your plan incompatible with an HSA. Under IRS rules, for a health plan to qualify, the annual deductible must not be less than $1,300 for an individual or $2,600 for a family. These plans are referred to as a High Deductible Health Plans (HDHPs). But for individuals receiving cost-sharing reductions through the marketplace, many plans have low or even zero deductibles, or exempt certain services from your deductible to meet cost-sharing requirements. If your cost-sharing reductions bring your deductible below the deductible requirement under an HSA-compatible plan, then the plan will no longer qualify as HSA-compatible. In this circumstance you can choose whether or not to take the cost-sharing reductions or have a HSA, but not both. (IRS, Rev. Proc. 2016-28; CMS, Frequently Asked Questions on Health Insurance Marketplaces).

We have a family plan that includes me, my wife and our two kids. We also have an HSA. My son is 22 and just graduated from college. He doesn't have a job, so we'd like to keep him on our family plan. Can we still use our HSA to help pay for his medical expenses? [2.1.17]

No. Although the Affordable Care Act allows your children to remain on your health insurance plan until age 26, you are not allowed to use funds from your HSA to pay for children over the age of 19, or 24 if they are full-time students, because IRS rules apply with HSAs. Because your son has graduated from college and is over the age of 19, you cannot use your HSA to pay for his expenses. (26 U.S.C § 152).

Marketplace Plan Renewals and Eligibility Re-Determinations
I received a notice telling me it’s time to renew my marketplace plan. What do I need to do? [2.1.18]

If you want to keep your coverage and ensure you are getting the right amount of financial help to pay for the costs of your plan, you should return to the marketplace. In most states, the marketplace will pre-populate a renewal application for you with the most current data they have about you, your family, your household income, and your access to other forms of coverage. You must complete two processes in order to renew your coverage: (1) ensure the accuracy of your account information and input any changes and (2) select a plan (even if you want to stay in your current plan). If you switch to a plan with a different insurance company, you should contact your old insurer to ensure that you are dis-enrolled (and to stop any continuing premium charges). If you do nothing and are eligible, you will be automatically renewed. If you are eligible for premium tax credits, the marketplace will make a determination based on the latest household income data they have through their federal sources. (45 C.F.R. § 155.335; CMS, Guidance on Reenrollments and Redetermination for Marketplace Coverage 2017).

When should I return to the marketplace to renew my plan and update my eligibility for subsidies? [2.1.19]

There is a three month open enrollment period for enrollees to return to the marketplace and renew their coverage. For 2017 coverage, open enrollment is from from November 1, 2016 to January 31, 2017. However, if you want to ensure you are enrolled in a plan with the correct amount of financial assistance by January 1, 2017, you must return to the marketplace by December 15, 2016. (45 C.F.R. § 155.335; CMS,Guidance on Reenrollments and Redetermination for Marketplace Coverage 2017).

I signed up for a marketplace plan through a special enrollment period in July. Do I still have to renew my plan during the open enrollment period? [2.1.20]

Even if you signed up mid-year, you must renew your coverage during the open enrollment period. For 2017 coverage, open enrollment is November 1, 2016 to January 31, 2017 in most states. All marketplace plans are offered on a calendar year basis. If you are receiving premium tax credits and want to ensure that you continue to receive the correct amount starting January 1, 2017, you must return to the marketplace by December 15, 2016 to update your account information and select a plan. If you do nothing and are eligible, the marketplace will automatically renew you with premium tax credits (if eligible) based on the latest household income data they have through their federal sources. (45 C.F.R. § 155.335; CMS, Guidance on Reenrollments and Redetermination for Marketplace Coverage 2017).

I haven’t had any changes in my income or other family circumstances, and I want to keep my same plan. Why should I return to the marketplace? [2.1.21]

It is important that all enrollees return to the marketplace to update their account information and select a plan, even if they’ve had no life changes and want to keep their same plan. Even if your income and household size remain the same, other factors can impact the level of premium tax credit an enrollee receives. Federal rating rules permit insurers to increase premiums as people age, but because enrollees’ premium contributions are capped at a percentage of their income, their premium tax credit should increase to cover the higher age-adjusted premium. Moreover, the premium for the silver benchmark plan (second lowest cost silver plan) is used to determine the level of premium tax credit; if the premium goes up, then your premium tax credit also increases. If the premium for the silver benchmark plan goes down, then your premium tax credit goes down. You should return to the marketplace to update your account information and shop among your plan options to ensure you are getting the correct amount of subsidy and the best bang for your premium tax credit dollar. (45 C.F.R. § 155.335; CMSGuidance on Reenrollments and Redetermination for Marketplace Coverage 2017).

I like my health plan just the way it is. Will it stay the same in 2017? [2.1.22]

It depends. Insurers are allowed to make changes to your health plan each year. For most people, their premium will change, and many will see changes to their benefits, cost-sharing, or provider networks. Your insurer should have sent you a notice explaining any significant changes to your plan premium or benefits. You should review that notice. However, even if you still want to keep your same plan, it is important that you return to the marketplace, update your account information, and select a plan to ensure you receive the correct amount of subsidy. (45 C.F.R. § 155.335; CMS, Guidance on Reenrollments and Redetermination for Marketplace Coverage 2017).

I received a notice from the marketplace telling me I was not eligible for automatic renewal of my plan. What should I do? [2.1.23]

The federal and most state marketplaces are not able to automatically renew all enrollees. For example, if you did not authorize the marketplace to access your tax information in order to assess your eligibility for subsidies, you will have to return to update your information. The marketplace will ask you to project your income and household size and select a plan. You need to complete both steps in order to ensure you receive the correct amount of subsidy.

Additionally, if your most recent federal tax filing shows that your income is more than 500 percent of the federal poverty level, you likely received a notice that, unless you return to the marketplace to actively re-enroll, you will be re-enrolled into coverage without any financial assistance. If your projected income is between 100-400 percent of the federal poverty level, you will likely be eligible for subsidies and should return to the marketplace to ensure they have the most accurate, up-to-date information so you can receive subsidies. (45 C.F.R. § 155.335; CMS,Guidance on Reenrollments and Redetermination for Marketplace Coverage 2017.

The notice from my insurer says my plan won’t be offered again. Now what do I do? [2.1.24]

You should return to the marketplace to review your account information and select a new plan. In most states, if you do nothing, the marketplace will automatically renew you into a plan that is similar to what you had last year. However, depending on the marketplace plans available, you could end up in a plan that is in a different metal tier or is a different plan type than your old plan (for example, an HMO instead of a PPO). Your insurer should have sent you a notice describing the alternative plan and how it is different from your current plan. If you are eligible for financial assistance through the marketplace, you should return to your account, review and update the information, and actively select a new plan. This will ensure that you receive an accurate amount of any premium tax credits and cost-sharing support you are entitled to and are enrolled in the best plan for your health care needs. (CMS, Guidance on Reenrollments and Redetermination for Marketplace Coverage 2017).

What happens if I don’t return to the marketplace to update my application? [2.1.25]

In most states, the marketplace will automatically renew you into the same or a similar health plan with a determination of premium tax credit eligiblity based on the latest information they have throught their federal sources. However, the price of the benchmark plan may have changed, meaning that your premium tax credit amount has changed. If your premium tax credit amount turns out to be less than what you’re actually eligible for, you will have to pay more in premiums than you should have to. Conversely, if your premium tax credit turns out to be more than what you’re actually eligible for, you will have to repay all or part of the difference when you file your tax return. (CMS, Guidance on Reenrollments and Redetermination for Marketplace Coverage 2017).

I was automatically renewed by the marketplace and I just got my premium invoice for January. It’s way too high! What do I do? [2.1.26]

You should return to the marketplace as soon as possible, review and update your account information, and select a plan (even if you want to stay in your current plan). This will trigger the marketplace to re-determine your eligibility for premium tax credits and cost-sharing reductions and ensure you are receiving the correct amount of financial assistance to reduce the cost of your premium. Note that if you pick a new plan by January 15th, coverage under the new plan will take effect on February 1st. If you don’t pick a new plan until January 16 to January 31, your new plan won’t be effective until March 1st. You will be responsible for paying the January and February premiums for your current plan. Also note that any medical expenses you incur under your old plan won’t count towards the deductible or cost-sharing limits under your new plan. (CMS, Guidance on Reenrollments and Redetermination for Marketplace Coverage 2017).

I received premium tax credits to help pay for my coverage, but I didn't file a tax return. Will I still be able to get coverage next year and financial assistance? [2.1.27]

You can get coverage for next year, but you will not be eligible for premium tax credits and cost-sharing reductions unless you file your taxes now to reconcile the premium tax credits received. If you do not take any action, you will be automatically re-enrolled, if eligible, into coverage, but without premium tax credits or cost-sharing reductions. Be sure to file your taxes now to reconcile the previous tax credit so that you can be eligible for premium tax credits and cost-sharing reductions. You can attest that you filed your taxes with the marketplace applications. The I.R.S. will be verifying that you actually filed and reconciled your previous premium tax credit. (CMS, Guidance on Reenrollments and Redetermination for Marketplace Coverage 2017).

Chapter 2: Coverage for Employees of a Large Employer

Background

Frequently Asked Questions

I work full time for a large employer (more than 50 full time employees). Is my employer required to offer me health benefits? [2.2.1]

Your employer is not required to offer health benefits.  However, starting in 2015, employers with 100 or more employees that do not offer health benefits to their full-time employees could face a tax penalty. However, these employers will not face a penalty for failing to extend the offer of health benefits to employees’ dependents. The tax penalty will be applied if they do not offer coverage and an employee qualifies for premium tax credits in the marketplace. Beginning in 2016, employers with 50 or more employees that don’t offer health benefits to their full-time employees may also be liable for a tax penalty. Employers will also be required in 2016 to offer health benefits to dependent children; however, employers are not required to offer coverage to the spouses of employees.

If your employer doesn’t offer you health benefits, you can apply for coverage in the marketplace; if your income is between 100 percent and 400 percent of the federal poverty level, you may apply for a premium tax credit that may reduce the cost of coverage in the marketplace.

Note that a full-time employee is one who works, on average, at least 30 hours per week. If your hours vary during the year, your employer may have some options in determining your status as a full-time or part-time worker. Your employer can tell you whether you are a full or part-time worker. (26 U.S.C. § 4980H; 26 U.S.C. § 36B; 79 Fed. Reg. 8544, Feb. 12, 2014).

I work full time for a large employer (more than 50 full time employees) and I’m married and we have kids. Is my employer required to offer health benefits that cover my spouse and kids? [2.2.2]

Your employer is not required to offer health benefits. However, starting in 2015, employers with 100 or more employees that don’t offer health benefits to their full-time employees may be liable for a tax penalty. Beginning in 2016, employers with 50 or more employees that don’t offer health benefits to their full-time employees and to their dependent children (but not their spouse) may also be liable for a tax penalty. Large employers do not face a tax penalty if they don’t offer health benefits to the spouses of their workers. If your employer doesn’t offer coverage to your spouse or children, they can apply for coverage in the marketplace and, if your family income is between 100 percent and 400 percent of the federal poverty level, a premium tax credit that may reduce the cost of coverage in the marketplace. If your employer offers health benefits that are affordable to you and meet minimum value, you still may choose to purchase coverage through a marketplace, but your family will not be eligible for premium tax credits to help pay for the coverage. (26 U.S.C. § 4980H; 79 Fed. Reg. 8544, Feb. 12, 2014).

I work part-time for a large employer. Is my employer required to offer me health benefits? What about benefits for my spouse and kids? [2.2.3]

No, large employers are not required to offer health benefits to part-time employees and there is no penalty for large employers that don’t offer health benefits to part-time employees or their dependents. If you work part-time and you are not offered health benefits, you (and your family) can apply for coverage in the marketplace; and, if your income is between 100 percent and 400 percent of the federal poverty level, you can apply for a premium tax credit that may reduce the cost of coverage in the marketplace. Note that under federal rules, a part-time employee is one that works, on average, fewer than 30 hours per week. If your hours vary during the year, your employer may have some options in determining your status as a full-time or part-time worker. Your employer can tell you whether you are a full or part-time worker. (26 U.S.C. § 4980H; 79 Fed. Reg. 8544, Feb. 12, 2014).

I work for a large employer (more than 50 full time employees) but my hours vary during the year. I work full-time during the summer but part-time the rest of the year. Does my employer have to offer me health benefits? [2.2.4]

Beginning in 2015, employers with 100 or more employees must offer health benefits to employees who work, on average, at least 30 hours per week or they may be liable for a penalty. Beginning in 2016, employers with 50 or more employees must also offer health benefits to employees who work, on average, at least 30 hours per week or they may be liable for a penalty. Check with your employer/human resources department to find out if your hours worked over the year meet this threshold. If your hours vary during the year, your employer may have some options in determining your status as a full-time or part-time worker. Your employer can tell you whether you are a full or part-time worker. (26 U.S.C. § 4980H; 79 Fed. Reg. 8544, Feb. 12, 2014).

I have an offer of employer-sponsored coverage, but the premiums are too expensive and I have to pay a lot out-of-pocket. Can I get premium tax credits in the health insurance market place?[2.2.5]

If the lowest cost, self-only coverage in your employer’s plan is 9.69 percent or more of your household income in 2017, and your income is between 100 percent and 400 percent of the federal poverty level, you may be eligible for a premium tax credit for coverage in your state’s health insurance marketplace (See Other Resources for more information on the federal poverty level for individuals and families). The coverage must also provide minimum value (meaning it covers at least 60 percent of the average costs of covered services).

The application for coverage in a health insurance marketplace includes questions your employer can answer to help determine whether your health benefits qualify you for a premium tax credit. (26 U.S.C. § 36B; IRS Rev. Proc. 2014-62).

I want to add my spouse and/or children to my plan but I can’t afford the family premium. Can my spouse buy a more affordable plan on the health insurance marketplace?[2.2.6]

It depends. If the premium for self-only coverage in the lowest cost plan is less than 9.69 percent of your household income in 2017 (9.66 percent in 2016), no one in your family who is eligible to join your employer’s plan can qualify for a premium tax credit, no matter how expensive the premiums are for a family plan. However, if family members forgo coverage because the employer plan premiums are too expensive, they may not be subject to the requirement that individuals purchase health insurance (the individual responsibility requirement or mandate). Specifically, if the premiums for family coverage through your employer’s plan are more than 8.16 percent of your household income in 2017 (8.13 percent in 2016), your family members will not be subject to a penalty for not enrolling in coverage. Your children may also be eligible for your state’s Children’s Health Insurance Program, depending on your income and the eligibility rules of your state. (26 U.S.C. § 36B; IRS Rev. Proc. 2014-62; 26 U.S.C. § 5000A).

When can I enroll in my employer plan?[2.2.7]

Most employers have an annual open enrollment period, often in the fall of each year (for plan coverage that starts January 1st). In addition, there are special circumstances that trigger a “special enrollment period,” in which you can enroll in coverage outside the annual open enrollment period. These include loss of eligibility for coverage because of divorce or legal separation, loss of dependent status, or reduction in hours or loss of job, or certain life events such as gaining a dependent through marriage, birth or adoption. Be aware, your employer may require you to enroll within 30 days of your change in circumstances. (29 C.F.R. § 2590.701-6; see also 26 U.S.C. § 4980H requiring large employers to offer its employees the opportunity to enroll in its employer-sponsored plan or face a tax penalty).

We just had a baby. Can I add my baby to my family plan?[2.2.8]

Yes, having a baby is one of the special circumstances that allow you to add dependents outside the annual open enrollment period. You have 30 days from the date of your child’s birth to request enrollment in your employer-sponsored coverage. (29 C.F.R. § 2590.701-6).

We just had a baby. Before that my husband and I were each covered under our own health plans at our own jobs, but now we want the family covered under one policy. Can we all switch to my employer plan now?[2.2.9]

Yes. Having a baby is one of the special circumstances that allow you to add dependents to your health plan, even outside of the regular open season. You have 30 days from the date of your child’s birth to notify your employer and request that your husband and your baby be enrolled in your coverage. (29 C.F.R. § 2590.701-6).

Is my employer required to offer benefits to retirees?[2.2.10]

No, there is no requirement to offer retiree health benefits. Retirees not yet eligible for Medicare may be eligible for coverage in a health insurance marketplace, possibly with a premium tax credit, depending on income and other factors. For more information on this, see Section 2, Chapter 3, Retiree Coverage. (26 U.S.C. § 36B).

I will start a new job next month with benefits. Can I enroll right away in my employer plan?[2.2.11]

Maybe – ask your employer. Under federal law, employers can impose a waiting period for health benefits after you start your job, but the waiting period can be no more than 90 days. If you are concerned that your employer requires a waiting period longer than 90 days, you can contact the U.S. Department of Labor at 1-866-444-3272. (45 C.F.R. § 147.116).

I work and am eligible for health benefits. Do I have to sign up for my job-based plan or will my employer do that for me?[2.2.12]

You generally are responsible for enrolling in a health plan offered by an employer, so it’s up to you to sign up for coverage under the rules and procedures established by your employer health plan.

Some employers may use auto-enrollment, which means that your employer will enroll you in a plan and you must opt-out of the plan if you do not want to be covered. If your employer auto-enrolls you in the group health plan, you must be given the opportunity to disenroll if you want or to change plans if your employer offers more than one option. If you have concerns with the way auto-enrollment in health coverage is handled at your job, you can contact the U.S. Department of Labor at 1-866-444-3272. (29 U.S.C. § 218a; Dept. of Labor, Employee Benefit Security Administration, Technical Release No. 2012-01, FAQs from Employers Regarding Automatic Enrollment, Employer Shared Responsibility and Waiting Periods).

My employer offers a workplace wellness program that increases premiums for employees who don’t participate and/or can’t meet certain targets for healthy behavior. I don’t think I’ll be able to afford the premiums if I don’t participate or miss the mark. Can I leave my employer-sponsored plan and get one on the health insurance marketplace? [2.2.13]

It depends on how much your costs go up based on any premium increases you face due to the wellness program. If your premiums with the wellness penalty would be 9.66 percent of your income or more in 2016 (9.69 percent in 2017), or if your cost-sharing increases enough to lower the value of your plan below the minimum value standard (60 percent of average costs of covered services), then you may be eligible for premium tax credits. This test applies whether you are actually penalized or not, and in advance of the penalty being applied (for example, if your employer gives you time to try to meet the health standard that triggers a penalty or reward). (26 U.S.C. § 36B; IRS Rev. Proc. 2014-62).

I have COBRA and it’s too expensive. Can I drop it during open enrollment and enroll in a marketplace plan instead?[2.2.14]

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. (45 C.F.R. § 155.420; 77 Fed. Reg. 18310, March 27, 2012).

I have COBRA and am finding it difficult to afford, but open enrollment is over. Can I drop my COBRA and apply for non-group coverage outside of open enrollment?[2.2.15]

No, voluntarily dropping your COBRA coverage or ceasing to pay your COBRA premiums will not trigger a special enrollment opportunity. You will have to wait until you exhaust your COBRA coverage or until the next open enrollment (whichever comes first) to sign up for other non-group coverage. (45 C.F.R. § 155.420; 77 Fed. Reg. 18310, March 27, 2012).

I’m leaving my job and will be eligible for COBRA. Can I shop for coverage and subsidies on the marketplace instead?[2.2.16]

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. To avoid a gap in coverage between the date your employer plan ends and the start of your marketplace plan, you can enroll in COBRA coverage through your former employer, however, you will need to cancel your COBRA coverage once the marketplace plan takes effect.  (45 C.F.R. § 155.420; 77 Fed. Reg. 18310, March 27, 2012; 79 Fed. Reg. 30240, May 27, 2014).

My hours at work were cut back and I no longer qualify for my employer’s health. I’ve been offered COBRA but it’s too expensive. Can I shop for coverage and subsidies on the marketplace instead? [2.2.17]

Yes, losing your employer coverage triggers a special enrollment opportunity that lasts for 60 days.  You can apply for marketplace health plans and depending on your income and the cost of COBRA, you may qualify for premium tax credits and cost-sharing reductions. Since you’re still an employee, you’ll have to show that your COBRA is either unaffordable or fails to meet minimum value in order to qualify for financial help in the marketplace. To be unaffordable, your COBRA premium for self-only coverage will have to be more than 9.66% of your household income in 2016 and 9.69% in 2017. To meet minimum value, the COBRA plan must have an actuarial value of 60 percent or more. (45 C.F.R. § 155.420; 79 Fed. Reg. 30240, May 27, 2014; IRS Rev. Proc. 2014-62).

I thought there was supposed to be a cap on my out-of-pocket costs, but when I look at my plan options, it looks like there is more than one cap, depending on what health care I use. How can that be?[2.2.18]

All non-grandfathered group health plans must cap out-of-pocket costs at $7,150 for an individual plan and $14,300 for a family plan. The cap applies to essential health benefits obtained in-network.

Group health plans will be allowed to separate the total cap among benefits. For example, there can be a cap on medical benefits and a separate cap for prescription drugs, but combined, they cannot exceed the out of pocket spending cap of $7,150 for self-coverage or $14,300 for a family plan. (45 C.F.R. § 156.130; 81 Fed. Reg. 12204, Mar. 8, 2016; Dept. of Labor, FAQs About ACA Implementation (Part XVIII) and Mental Health Parity Implementation).

I thought my employer plan couldn’t have any annual or lifetime limits on benefits but I heard that there may still be some limits in our plan. Is that allowed? [2.2.19]

All non-grandfathered group health plans are prohibited from imposing annual or lifetime dollar limits on “essential health benefits”. There may be some benefits that your plan covers that aren’t considered “essential health benefits,” and for those services, your plan can include an annual or lifetime dollar limit. Plans can also include non-dollar limits on benefits, such as limits on the number of visits, or days in the hospital, even on “essential health benefits.”

Your Summary of Benefits and Coverage must include information on limitations and exceptions on services that are covered, as well as lists of excluded services and “other covered services,” which may include services that have greater restrictions and/or higher out-of-pocket costs than would apply to “essential health benefits.” (45 C.F.R. § 156.130; 79 Fed. Reg. 13744, March 11, 2014; 45 C.F.R. § 147.200).

I’m eligible for health benefits at work. My employer didn’t provide my enrollment materials on time and as a result, I missed the company’s open enrollment. Can I apply for coverage in the marketplace now? Or is my employer required to give me a second chance to enroll at work? [2.2.20]

If your employer failed to provide you enrollment materials on time and, as a result, you missed your opportunity to enroll in your employer’s plan, you can ask your employer for – and you must be offered – another opportunity to enroll.

My employer won’t fill out the form that asks about the affordability of our job-based health plan. I think my job-based plan is unaffordable and that’s why I’m not enrolled in it. Can I go ahead and apply for marketplace coverage and premium tax credits without that form?[2.2.21]

Your employer is not required to fill out the form that asks about affordability of your job-based health plan. If for any reason you cannot obtain this information from your employer, you should report to the marketplace what you know yourself about your eligibility for employer-sponsored coverage, the cost of that coverage, and whether it meets minimum value. The marketplace may try to follow up with your employer and collect or verify this information. The marketplace will determine your eligibility for premium tax credits based on the information you provided or based on any information the marketplace was able to obtain.

I’m eligible for health benefits at work. However, unfortunately, I didn’t turn in my enrollment papers on time during the company open season, so now I’m not covered. Can I get a policy in the marketplace instead? Can I apply for premium tax credits?[2.2.22]

If you missed your opportunity to enroll in your employer plan during the company’s open enrollment season, you can still apply for coverage in the marketplace during open enrollment, which runs from November 1, 2016 to January 31, 2017. You can also apply for premium tax credits but you will have to provide information on the health coverage you are eligible for at work, even if you’re not enrolled in the plan. If the plan offered meets standards for affordability and minimum value, you will not be eligible for premium tax credits or cost-sharing reductions.

My large employer offers health benefits to me. My wife works and has coverage through her job. To figure out whether my coverage is affordable, do I just count my income or do I count my wife’s salary, as well?[2.2.23]

If you are considering applying for premium tax credits for coverage in the marketplace, the test for whether your employer coverage is affordable is based on the cost of self-only coverage in the lowest cost plan your employer offers, compared to your household income (and not just your salary). (78 Fed. Reg. 25909, May 3, 2013).

My employer offers a “mini-med” plan. It only covers preventive services and a few doctor visits each year. I want better coverage. Can I apply for coverage and premium tax credits in the marketplace?[2.2.24]

You can apply for coverage in the marketplace and if your employer plan doesn’t meet the Affordable Care Act’s standard for minimum value, you may qualify for premium tax credits. To meet the minimum value standard, the plan must cover at least 60 percent of covered services for an average population. If your employer plan only covers preventive services and a few doctor visits, it is likely it doesn’t meet the minimum value standard (which means it would be considered inadequate and you could be eligible for premium tax credits to help buy a marketplace plan). However, if your employer offers another plan or plans, in addition to the mini-med plan, that is found to be adequate and the premiums for self-only coverage in that plan would be considered affordable for you, you will not qualify for premium tax credits in the marketplace. (78 Fed. Reg. 25909, May 3, 2013).

Chapter 3: Coverage for Employees of a Small Employer

Background

Frequently Asked Questions

I work full time for a small business (fewer than 50 employees). Does my employer have to offer me health benefits?[2.3.1]

No, small businesses are not required to offer health benefits to either full-time or part-time employees, or to their dependents. Small businesses are not subject to tax penalties when they don’t offer health benefits. If your small employer doesn’t offer health benefits, you (and your family) can apply for coverage in the marketplace; and, if your income is between 100 percent and 400 percent of the federal poverty level, you can apply for a premium tax credit that may reduce the cost of coverage in the marketplace.

I have an offer of coverage from my employer, but the premiums are too expensive and I have to pay a lot out-of-pocket. Can I get financial help in the health insurance marketplace?[2.3.2]

If your premiums for self-only coverage in your employer plan are 9.66 percent or more of your household income and your income is between 100 percent and 400 percent of poverty, you may be eligible for a premium tax credit for coverage in a health insurance marketplace (see Other Resources for more information on the federal poverty level for individuals and families). The coverage must also provide minimum value (at least 60 percent of average costs of covered services).

The application for coverage in a health insurance marketplace includes questions your employer can answer to help determine whether your health benefits qualify you for a premium tax credit.

My employer just told us we are enrolling in the “SHOP.” What is the SHOP?[2.3.3]

The SHOP, or Small Business Health Options Program, is a new marketplace in which small employers can go online to compare health plans on an “apples-to-apples” basis. Depending on the size of employer and average employee salaries, your employer may also qualify for federal premium tax credits to help pay for employees’ coverage.

All health plans offered on the SHOP have been certified to meet minimum standards for the adequacy and quality of coverage. All plans also must cover a similar set of benefits, and each plan will be assigned to a precious metal level of coverage – bronze, silver, gold, or platinum – that reflects how much protection against cost-sharing the plan provides to the average enrollee. Bronze plans expose the average consumer to the greatest amount of cost-sharing, while platinum plans provide the most protection. Bronze plans will tend to have lower monthly premiums, while the premiums for platinum plans will be more expensive.

On the SHOP website, depending on your state, you may be able to select and enroll in a health plan. Your employer may only provide one plan choice or your employer may be able to offer you a range of plans to choose from. Either way, you should be able to see standardized information about your plan options online so you can better understand the coverage you are purchasing. If you need additional assistance picking a plan or understanding how to enroll in coverage, in-person and telephone assistance should be available. (45 C.F.R. § 155.20; 45 C.F.R. § 155.710).

The company I work for is buying coverage through the SHOP. Can I choose any plan I want?[2.3.4]

If your employer elects to purchase coverage through the SHOP, your employer can either select your plan options for you or provide you with greater choice. In 2016, all SHOPs must allow (but not require) employers to let their employees pick any plan within a level of coverage. For example, your employer may allow employees to pick any plan at a given precious metal level of coverage (for example, any silver level of coverage plan). In some states, your employer may also allow employees to pick among multiple plans offered by a selected insurer (for example, any metal level of coverage offered by a particular insurer), or to pick from a wider selection of plans. Typically, if your employer chooses to provide greater choice to you and your co-workers, they will select a “reference plan” to calculate how much they will contribute to your premium. If you choose to purchase a more expensive plan than the “reference plan,” you may be responsible for the additional cost. If you choose to purchase a less expensive plan, you may be able to reduce your portion of premium expenses compared to what you would owe if you selected the reference plan.

My employer’s plan is changing and they’ll now pay a pre-set dollar amount toward my coverage. What does this mean for the coverage I buy?[2.3.5]

Your employer is shifting to a defined contribution plan, meaning that the employer defines in advance the dollar amount he or she is willing to contribute to employees’ premiums. This is different from the more traditional defined benefit approach to employer-sponsored coverage, in which the employer chooses the benefit package and agrees to pay a percentage of the premiums. With a defined benefit approach, if the plan’s premiums go up, so does the employer’s contribution.

If your employer is shifting to a defined contribution approach, and offers only one plan option, your coverage may not look very different to you in the first year. However, over time, your employer’s level of contribution may not keep pace with increases in the cost of health insurance – leaving you to make up the difference.

If your employer is offering more than one plan option, your employer may peg the amount of their contribution to one of the options – often referred to as a “benchmark” or “reference plan.” If you choose to purchase a more expensive plan than the “reference plan,” you may be responsible for the additional cost. If you choose to purchase a less expensive plan, you may be able to reduce your portion of premium expenses compared to what you would owe if you selected the reference plan. However, if your employer’s level of contribution does not increase at the same rate as premiums, over time, you will be responsible for a greater portion of costs regardless of your plan selection.

I’ve heard there is a tax credit if my employer buys through the SHOP. Can I get it?[2.3.6]

Since 2010, certain small businesses – specifically, those that cover at least 50 percent of premiums for their employees (not including dependents) and have fewer than 25 full-time employees whose average annual wages are less than $50,000 – have been able to receive a small business health care tax credit. Beginning January 1, 2014, the maximum value of this sliding scale tax credit will increase significantly – from 35 percent to 50 percent of premiums paid by small businesses. To qualify, they must purchase coverage through the SHOP. The amount of the tax credit is only based on your employer’s contribution to premiums, and it is up to your employer to determine how to use the money. However, if your offer of employer-sponsored health insurance is unaffordable or does not provide adequate protection against cost-sharing, you may be eligible for premium tax credits and cost-sharing reductions if you purchase coverage in the health insurance marketplace. For more information, see this FAQ. (78 Fed. Reg. 25909, May 3, 2013).

Does my employer have to offer these essential health benefits or other consumer protections in the Affordable Care Act?[2.3.7]

That depends. Some employer-sponsored plans may be exempt from many of the Affordable Care Act’s requirements, including the essential health benefit rules. If your plan is “grandfathered,” for example, your employer does not have to comply with the essential health benefits standard. For more on grandfathered plans, see ACA Consumer Protections for Private Coverage.

In addition, if you are covered by a “self-insured” or “self-funded” plan, your employer is exempt from many of the Affordable Care Act’s rules, including the requirement to cover the essential health benefits. Under such an arrangement, your employer acts as the insurer, rather than purchasing a plan from a health insurance company. Sometimes these plans can look very similar to traditional health insurance – for example, your employer may still pay an insurance company to administer your benefits. Self-funded plans must comply with certain federal rules, including bans on annual and lifetime limits and rescissions, and requirements to cover recommended preventive health services without cost-sharing and extend dependent coverage to age 26. (45 C.F.R. § 147.100 to 200).

It is also possible that your group plan was renewed in 2013, before it was required to come into compliance with many of the consumer protections required under the Affordable Care Act. In most states, your employer may have the option to renew that same plan again, avoiding compliance with most of the Affordable Care Act reforms for an additional year.

When can I enroll in my small employer plan?[2.3.8]

Your employer can choose to begin offering coverage at any point during the year. If your employer is purchasing coverage through the SHOP, you will have an annual open enrollment period lasting no less than 30 days during which you can compare your options and enroll in coverage. If you are a new employee, the SHOP must provide you an enrollment period to seek coverage beginning on the first day of your eligibility for coverage.

Outside of your employer’s annual open enrollment period, there may be changes in your coverage or circumstances, known as “triggering events,” that allow you or your dependent to enroll in or change a plan during a special enrollment period. Special enrollment periods will be provided if you or a dependent (if your employer covers dependents):

  • Lose minimum essential coverage (for example, if you or your dependent were previously covered by your spouse’s health plan, but are dropped from that coverage; or if the insurer providing the plan you were enrolled in through your employer discontinues the plan)
  • Gain a dependent or become a dependent through marriage, birth, adoption or placement for adoption
  • Were erroneously enrolled in the wrong health plan or not enrolled in a health plan due to administrative error by the SHOP
  • Demonstrate that the health plan you or your dependent are enrolled in violated its contract with you
  • Gained access to new health plans as a result of a permanent move
  • Lose eligibility for coverage under Medicaid or Children’s Health Insurance Program coverage
  • Become eligible for assistance with your employer-sponsored plan through Medicaid or Children’s Health Insurance Program coverage
  • Meet other exceptional circumstances as the SHOP may provide

In most instances, you will have 30 days from the triggering event to select and enroll in a plan through the SHOP. However, if your special enrollment period relates to the gain or loss of Medicaid or Children’s Health Insurance Program eligibility, you will have 60 days to select and enroll in a health plan. Your coverage will become effective on the first day of the following month if you make your selection between the first and fifteenth day of the month. If you make your selection later in the month, your coverage will typically not become effective until the first day of the second following month. However, exceptions are provided in certain circumstances. First, coverage is effective on the date of birth, adoption, or placement for adoption. Second, if you get married or lose minimum essential coverage, the SHOP must ensure your coverage is effective on the first day of the following month. In addition, if you are an American Indian/Alaska Native, you may enroll in a health plan or change from one health plan to another one time per month.

When it’s time to renew your coverage, you will remain in the health plan you selected the previous year, unless you choose to terminate your coverage in that plan, you enroll in another health plan through the health insurance marketplace, or the plan is no longer available to you. (45 C.F.R. § 155.725)

I work for a small business and I smoke.  Will my company be charged more because of me? [2.3.9]

Yes, assuming your coverage is purchased in a state that allows the tobacco surcharge. An insurer can adjust the premiums of health plans sold to small businesses based on the number of workers who use tobacco, unless your employer offers tobacco users services to quit. (45 C.F.R. § 147.102(a)(1)(iv); 78 Fed. Reg. 33158, June 3, 2013).

Chapter 4. Retiree Coverage

Background

Frequently Asked Questions

I have retiree coverage from my former employer, but the premiums are too expensive and I have to pay a lot out-of-pocket. Can I drop my retiree plan and get financial help in the health insurance marketplace?[2.4.1]

Yes, as long as you drop your retiree health plan, you may be eligible for coverage in a health insurance marketplace, and depending on your income, for premium tax credits. There are a few important considerations to keep in mind:

  • You must apply for coverage during the annual open enrollment period. If you drop your plan expecting to enroll at another time, you will have to wait.
  • In order to avoid a gap in coverage, be sure to coordinate the date your retiree coverage will end with the date your health insurance marketplace coverage will begin.
  • If you are eligible for premium tax credits, you will be able to shop for coverage and see the premiums you would pay, taking into account the tax credit.
  • If you want to compare benefits and cost-sharing under your retiree plan to those you would get in a plan in a health insurance marketplace, keep in mind that plans that cover only retirees (and not active workers as well) don’t have to comply with the same consumer protections as plans in a health insurance marketplace. (26 U.S.C. § 36B; 45 C.F.R. § 155.420; 78 Fed. Reg. 25909, May 3, 2013; HealthCare.gov, Health Coverage for Retirees Without Medicare).
I’m 62 and already collecting Social Security. Are my Social Security benefits counted in determining my eligibility for subsidies in the marketplace?[2.4.2]

Yes, Social Security benefits are counted as income in determining eligibility for premium tax credits in the marketplace. (26 U.S.C. § 36B (d)(2)(B)(iii)).

I’m a retired veteran collecting VA pension benefits. Are those benefits counted in determining my eligibility for subsidies in the marketplace? [2.4.3]

Yes, VA pension benefits, like Social Security benefits, are counted as income in determining eligibility. (26 U.S.C. § 36B; Center on Budget and Policy Priorities, The Health Care Assister’s Guide to Tax Rules).

Does my retiree health coverage count for the individual responsibility requirement (individual mandate), or will I have to change my coverage? [2.4.4]

Yes, retiree health coverage counts as minimum essential coverage, so you won’t have to pay a tax penalty or change plans. (26 U.S.C. § 5000A).

Does my retiree coverage have to comply with the Affordable Care Act? [2.4.5]

It depends. If the plan in which the retirees are enrolled also covers active workers, the consumer protections will apply, including limits on out-of-pocket costs and coverage of recommended preventive services without cost-sharing. However, if the plan only covers retirees, as is more often the case, the coverage does not have to comply with the Affordable Care Act consumer protections. Your former employer can tell you which type of plan you have.

My spouse is covered under my plan at work. If I retire and sign up for my retiree plan, will my husband be eligible to buy a plan on the marketplace?[2.4.6]

Probably. Most people are eligible to buy a plan on the health insurance marketplace. However, depending on your household income and his access to other coverage options, he may not be eligible for premium tax credits to lower the cost of a marketplace plan. For example, if he is eligible for Medicare and doesn’t sign up for your retiree plan, he would not be eligible for premium tax credits. However, if he’s not eligible for Medicare and doesn’t enroll in your retiree health plan, he could be eligible for premium tax credits, assuming your household income is less than 400 percent of the federal poverty level. (78 Fed. Reg. 25909, May 3, 2013).

I’m 63 and about to retire. I’ll be offered a retiree health plan. Can I look for better coverage and subsidies in the marketplace instead?[2.4.7]

Yes. Most early retiree health plans are considered minimum essential coverage, and thus meet an individual’s requirement for coverage. However, if you want to obtain coverage through the marketplace, you may do so, and if your income is at or below 400 percent of the federal poverty level, you are eligible for premium tax credits. Eligibility for retiree coverage will not affect your eligibility for marketplace coverage and subsidies. See Other Resources for more information on the federal poverty level for individuals and families. (26 U.S.C. § 5000A; 26 U.S.C. § 36B-2; 78 Fed. Reg. 25909, May 3, 2013).

My spouse is an early retiree with affordable retiree health benefits from his former employer, but I’m not eligible to be on his plan. Can I apply for coverage and subsidies in the marketplace? [2.4.8]

Yes, assuming you meet the other requirements, you can apply for health plans and premium tax credits in the marketplace. Your spouse’s eligibility for early retiree coverage will not affect your ability to seek coverage and financial help in the marketplace. (26 U.S.C. § 36B-2, 78 Fed. Reg. 25909, May 3, 2013).

I’m 63 and my husband is 65 and on Medicare. Our income is less than 400 percent of the federal poverty level so I need help affording the premium in the marketplace. Can we count what my husband has to pay for his Medicare premiums and supplemental and Part D premiums against what I will be required to contribute toward coverage in the marketplace?[2.4.9]

No. Your eligibility for premium tax credit subsidies and the amount of your premium tax credit will be based on your family income. The amount your husband pays for his Medicare, Part D and supplemental insurance premium costs will not be taken into account. (26 U.S.C. § 36B-2).

Chapter 5: Issues For Young Adults: Student Health Plans and Coverage on Parent’s Health Plans

Background

Frequently Asked Questions

Student Health Plans
What is a student health plan?[2.5.1]

“Student health plan” refers to a special policy of health coverage that colleges and universities make available to their enrolled students. Typically the student health plan is different from the employer-sponsored group coverage that colleges and universities offer their faculty and staff. (77 Fed. Reg. 16453, March 21, 2012; CMS, Student Health Plans and the Affordable Care Act).

Does a student health plan count as minimum essential coverage?[2.5.2]

Yes. A student health plan counts as minimum essential coverage. (45 C.F.R. § 156.602).

Does a student health plan have to cover essential health benefits?[2.5.3]

It does if it is a “fully insured” student health plan. A fully insured plan is one that your college or university purchases from a health insurance company. If your student health plan is fully insured, it must cover essential health benefits, which include:

  • Ambulatory patient services
  • Emergency services
  • Hospitalization
  • Maternity and newborn care
  • Mental health and substance use disorder services, including behavioral health treatment
  • Prescription drugs
  • Rehabilitative and habilitative services and devices
  • Laboratory services
  • Preventive and wellness services and chronic disease management
  • Pediatric services including oral and vision care

However, if the student health plan is “self-insured,” it might not be required to cover essential health benefits. It’s up to states to regulate self-insured student health plans. Check with your college or university to find out what type of student health plan they offer, or check with your state insurance regulator to find out what rules apply to your student health coverage. (77 Fed. Reg. 16453, March 21, 2012).

Does my student health plan have to cover contraceptives?[2.5.4]

In general, yes. Non-profit religious universities can object to cover contraceptives on religious or moral grounds under federal law, however, their insurer or third-party administrator must still accommodate contraceptive coverage and cover contraceptives at no cost to you. (45 C.F.R. § 147.130; 78 Fed. Reg. 39870, July 2, 2013).

I’m a part-time student. Does my college have to let me enroll in the student health plan?[2.5.5]

It is up to the college or university to establish eligibility rules for student health plans. (77 Fed. Reg. 16453, March 21, 2012).

I’m eligible for the student health plan but haven’t signed up yet. Do I have to enroll in that plan or can I apply for coverage and subsidies in the marketplace?[2.5.6]

Eligibility for a student health plan does not make you ineligible for marketplace coverage and subsidies. Even if you are eligible for student health coverage, you can get coverage through the marketplace. In addition, if your income is between 100 percent and 400 percent of the federal poverty level and you meet other requirements, you can qualify for premium tax credits; if your income is between 100 percent and 250 percent of the federal poverty level, you can also qualify for cost-sharing reductions. See Other Resources for more information on the federal poverty level for individuals and families.

In addition, eligibility for a student health plan does not make you ineligible for Medicaid. Check with your state to find out if you meet the income and other eligibility standards to enroll in Medicaid coverage. (26 U.S.C. § 36B; 42 U.S.C. § 18071; Medicaid.gov, Eligibility).

I’m enrolled in student health coverage now, but I think I can get a better deal in the marketplace. Can I drop student health plan coverage and go to the marketplace instead?[2.5.7]

If you are currently enrolled in a student health plan, you can still qualify for marketplace policies and subsidies if you apply during open enrollment. During open enrollment, you can sign up for a marketplace plan and, if your income is between 100 percent and 400 percent of the poverty level you can also apply for premium tax credits . You will have to drop your student health coverage before your marketplace plan becomes effective in order to be eligible for premium tax credits.

Outside of open enrollment, you cannot voluntarily drop your student health plan coverage in order to qualify for coverage and premium tax credits. However, if you involuntarily lose eligibility for student health plan coverage mid-year – for example, if you drop out of school and so lose eligibility for the student health plan – you will qualify for a special enrollment opportunity and be able to apply for marketplace coverage and premium tax credits. The special enrollment opportunity will last 60 days, so be sure to contact the marketplace promptly to notify them of your qualifying event. (45 C.F.R. §§ 155.410, 155.420).

I’m a foreign student studying in the U.S. Does the requirement to have health coverage apply to me?[2.5.8]

It depends on whether or not you are required to file a U.S. tax return. In general, under IRS rules, foreign students who are in the U.S. temporarily to study under certain types of visas are exempt from filing taxes. If you are required to file taxes in the U.S., however, you are required to maintain health coverage. However, you might qualify for another exemption to the requirement. (26 U.S.C. 5000A).

I’m an American college student and I plan to study abroad next semester. Am I required to have U.S. health insurance while I’m living in another country?[2.5.9]

Yes, unless you qualify for another exemption. In general, U.S. citizens with a tax home outside the U.S. and who are residents of a foreign country for the entire taxable year are exempt from the requirement to have health insurance in the U.S. But if you are a student temporarily living abroad for part of the year, and don’t qualify for any other exemptions, you would be required to have health insurance or else pay a penalty.

Coverage on a Parent’s Health Plan
I’m about to turn 19 and I’m covered under my parent’s health plan as a dependent. How long can I stay covered as a dependent?[2.5.10]

Health plans that offer dependent coverage must cover dependents up to their 26th birthday. (45 C.F.R. § 147.120; CMS, Young Adults and the Affordable Care Act: Protecting Young Adults and Eliminating Burdens on Businesses and Families).

I’m going to a college that offers a student health plan. Can I stay covered as a dependent on my parent’s policy or do I have to take the student health coverage?[2.5.11]

Yes. Eligibility for student health coverage does not make you ineligible to be covered as a dependent on your parent’s policy up to the age of 26. (45 C.F.R. § 147.120).

I just got a job that offers health benefits, but my parent’s policy is better and less expensive to me. Can I stay on my parent’s policy?[2.5.12]

Generally, yes. Eligibility for group health benefits through your own job does not make you ineligible to be covered as a dependent on your parent’s policy up to the age of 26. One exception to this rule applies to grandfathered group health plans. These are plans offered by employers that were established prior to March 23, 2010 and that have not significantly changed since that date. If your parent’s policy is a grandfathered group health plan, it can refuse to cover you as a dependent if you are eligible for health benefits through your own job. However, if your parent’s plan renewed after January 1, 2014, even if grandfathered, then this exception no longer applies. You will have to ask your parent’s health benefits administrator to find out about the status of the plan. (45 C.F.R. § 147.120; 75 Fed. Reg. 34538, June 17, 2010).

I’m 24 and I used to be covered as a dependent on my parent’s policy. I dropped off last year when I found other coverage, but now I’ve lost that other coverage and want to get back on my parent’s policy. Can I do that?[2.5.13]

Yes. You are still eligible to be covered as a dependent. Your parent’s plan must offer you a special opportunity to re-enroll because you lost other coverage. That special enrollment opportunity must last at least 30 days from the date you lost other coverage. (45 C.F.R. § 147.120; 45 C.F.R. § 146.117).

Do my parents have to claim me as a tax dependent for me to be on their health plan to age 26?[2.5.14]

No. You do not need to be a tax dependent of your parents to continue to be covered as a dependent on their health plan. (75 Fed. Reg. 34538, June 17, 2010).

I’m 25 years old and eligible for coverage as a dependent under my parent’s employer plan. If I apply for my own marketplace plan with premium tax credits, will the marketplace consider the coverage available to me under my parent’s plan?[2.5.15]

It depends. If your parent claims you as a dependent when he or she files taxes, you will be considered part of your parent’s household when applying for premium tax credits and the marketplace will consider whether the employer plan available to you is affordable and meets minimum value. However, if you are not claimed as a dependent on your parent’s tax filings and instead file your own taxes, you have the choice to enroll in your parent’s employer plan or apply on your own for coverage in the marketplace with premium tax credits. If this is the case, you should compare your costs under the employer plan to those under a marketplace plan (potentially with premium tax credits, if you qualify) to determine which plan is better for you.

Do I have to live in my parent’s home to be covered as a dependent under their policy?[2.5.16]

No, living in your parent’s home is not a requirement for eligibility to be covered as a dependent under their policy. (75 Fed. Reg. 34538, June 17, 2010).

I’m covered under my parent’s policy but I’m moving to another state. Can I remain covered as a dependent?[2.5.17]

Yes, you are eligible to be covered as a dependent up to age 26 regardless of where you actually live. However, your parent’s health plan probably has a network of participating providers and it may be difficult for you to find in-network care when you are living in another state. If you find that your parent’s plan doesn’t cover health providers in the state where you live, you can also explore the option of signing up for coverage on your own. Moving will qualify you for a special enrollment opportunity to enroll in other coverage. Check the marketplace website in your state for more information about qualified health plan options and your eligibility for premium tax credits. (75 Fed. Reg. 34538, June 17, 2010).

My wife and I want to cover our 25-year-old son as a dependent on our health insurance policy. We have no other children. We don’t claim him as a dependent for tax purposes, he doesn’t live with us, and he has a job. We also have modest income and hope we can qualify for premium tax credits in the marketplace. Do we have to count our son as a member of our household when we apply? Do we have to count his income when we apply? [2.5.18]

No. You and your husband will be counted as a household of two and the income you and he report on your joint tax return will be counted for purposes of determining your eligibility. Your son will be counted separately as a household of one, and his income will be counted separately to determine his eligibility. Although your son is legally entitled to be on the same policy as you because he's under age 26, the IT functionality available through the federally facilitated marketplaces cannot currently accommodate a family plan in which there are two separate tax credits allocated to two separate tax households (yours and your son's). If you and your son are applying separately for premium tax credits, you cannot currently be on the same plan. Note that this means your son will have his own separate deductible and maximum out-of-pocket cap under his policy. Alternatively, your son could choose not to apply for premium tax credits, so that you are submitting only one application as a family. In such a case, you can add him to your plan. (26 U.S.C. § 36B-3(h); 77 Fed. Reg. 30377, May 23, 2012).

Can I be covered under my parent’s plan if I’m married?[2.5.19]

Yes, as long as you are younger than 26. Being married does not affect your eligibility to be covered as a dependent under your parent’s plan. (C.F.R. § 147.120; CMS, Young Adults and the Affordable Care Act: Protecting Young Adults and Eliminating Burdens on Businesses and Families).

I’m under age 26, covered on my parent’s plan as a dependent, and I’m getting married. Does my parent’s plan have to cover my spouse?[2.5.20]

No. Your parent’s plan is not required to cover your spouse. (45 C.F.R. § 147.120).

I’m covered as a dependent under my parent’s plan and I’m pregnant. Will my parent’s plan cover my prenatal care and delivery? Will my parent’s plan cover my baby after he’s born?[2.5.21]

Your parent’s plan is probably required to cover your maternity care and delivery. (There are a few exceptions to this, see “grandfathered and transitional plans” in the ACA Consumer Protections for Private Coverage section under Other Resources). However, after that, the plan is not required to cover your child as a dependent. You will be responsible for obtaining coverage for your baby. Depending on your income, your child may be eligible for coverage under the Medicaid/CHIP program in your state. Or, you can buy a child-only policy through the marketplace and, depending on your income, you may be eligible for a premium tax credit to reduce your cost of that coverage. (45 C.F.R. § 147.120; 45 C.F.R. § 146.130; 26 U.S.C. § 36B).

I’m covered as a young adult dependent on my parent’ s policy now, but my 26th birthday is next summer, at which point I won’t be eligible for dependent coverage any longer. Should I apply for marketplace health plans and subsidies now, during open enrollment?[2.5.22]

You can remain covered as a dependent on your parent’s policy until you turn 26. Once you lose eligibility as a dependent, you will qualify for a special enrollment opportunity to apply for health coverage and financial assistance through the health insurance marketplace. This special enrollment opportunity will be in place 60 days before you lose eligibility for your parent’s plan and for 60 days after. (45 C.F.R. § 147.120; 45 C.F.R. § 155.420).

My parents are self-employed and buy coverage through the marketplace. They earn too much to qualify for subsidies. I’m 24 and only earn $30,000 a year (about 260 percent of the federal poverty level). My parents don’t claim me as a tax dependent, I file my own return. Can I be covered as a dependent under their marketplace policy? If so, can I qualify for a premium tax credit and apply that to their premium?[2.5.23]

Yes, you can be covered as a dependent up to age 26 on your parent’s marketplace policy. If your parents don’t claim you as a tax dependent (and you file independently), then your eligibility for premium tax credits will be based on your income alone. With your income at 260 percent of the poverty level, you will qualify for a premium tax credit. Once you know the amount, you can decide to sign up for a marketplace policy on your own, or be covered as a dependent on your parent’s policy until you are 26. If you enroll in your parent’s plan, you can elect to have your premium tax credit paid directly to your parent’s insurer each month, or you can claim it on your tax return later when you file. (45 C.F.R. § 147.120; 26 U.S.C. § 36B).

My son goes to college in another state but we want him on our family plan in the health insurance marketplace. Can we do that?[2.5.24]

Yes. If your son or daughter is a member of your tax household, they can join your family plan on the health insurance marketplace, even if they live out of state. However, your child may need to return home in order to access care within your plan’s network. If he or she gets health care services in another state, the providers may be outside your plan’s network and you may have to pay high co-payments or coinsurance. Your son or daughter is also likely eligible to buy coverage in the state where they attend school. If they do so, they would have a greater choice of in-network providers. (45 C.F.R. § 155.305 (a)(3)).

Section 3

This section covers enrollment issues for small employers who want to understand and compare their coverage options for their employees.

Background:

Frequently Asked Questions

I own my own business and have no employees, what are my options?[3.1.1]

While you are not eligible to purchase small group health insurance through the SHOP marketplace, you can purchase individual market coverage and may be able to qualify for financial assistance through the health insurance marketplace for individuals. (45 C.F.R. § 155.710; 77 Fed. Reg. 18310, March 27, 2012).

I’m self-employed and the only employee I have is my spouse or child. What are my options?[3.1.2]

While you are ineligible to purchase small group health insurance through the SHOP exchange, you can purchase individual market coverage and may be able to qualify for financial assistance through the health insurance marketplace. (45 C.F.R. § 155.710; 77 Fed. Reg. 18310, March 27, 2012; 29 C.F.R. § 2510.3).

I have 47 employees and I’m trying to decide if I should hire more. What are the implications if I have more than 50 employees? [3.1.3]

With fewer than 50 employees you can purchase coverage either directly from an insurance company or through the SHOP. If you choose to purchase through the SHOP now, you will be able to continue in your SHOP plan even if you go over 50 employees, so long as you meet all other eligibility rules (for example, you must offer coverage to all full-time employees).

The Affordable Care Act also applies “shared responsibility” requirements to employers with more than 50 full-time or full-time equivalent employees. While it does not directly require such employers to offer health insurance, it imposes financial penalties if their employees qualify for premium tax credits for individual coverage, either because the employer did not offer coverage or offered coverage that was deemed unaffordable or to not provide adequate protection against cost-sharing. These rules will take effect in January 2016 for employers with between 50 and 99 employees. (77 Fed. Reg. 18310, March 27, 2012; 26 U.S.C. § 4980H).

Currently, groups with more than 50 employees are subject to different rules than groups with 50 or fewer employees. For example, insurers offering coverage to large groups do not need to provide the essential health benefits package, while they are required to offer such coverage to small groups. They also cannot charge a small employer higher premiums based on employees’ health status or gender, while they can do so for groups with more than 50 employees. Under the ACA, these protections will extend to employer groups of up to 100 employees beginning in 2016, although in many states this requirement has been delayed until 2017.

I’m a small business owner. Can I qualify for a tax credit to buy insurance?[3.1.4]

Beginning in 2014, the small business tax credit is only available for coverage bought through the SHOP. To qualify for a small business health insurance tax credit, you must cover at least 50 percent of premiums for your employees (not including dependents) and have fewer than 25 full-time employees whose average annual wages are less than $50,000.

The number of full-time employees is calculated based on the total number of hours of service for which you pay wages to employees during the year, up to 2,080 hours per employee. This number is then divided by 2,080 and rounded down to the next lowest whole number to determine your number of full-time employees (or full-time equivalent employees). Seasonal workers are not included unless they work for more than 120 days during the tax year. Business owners and their family members generally are not included either. For more information, see this reference.

Average wages are determined by adding up the total amount of wages you paid during the tax year, and dividing by your number of full-time employees for the year. You may round down to the nearest $1,000.

The amount of the tax credit is set on a sliding scale based on the number of employees and average wages, with the maximum credit going to firms with 10 or fewer full-time employees and average wages equal to or less than $25,000. Employers who are not tax-exempt are eligible for a higher tax credit than employers who are tax-exempt.

Beginning in January 1, 2014, the maximum value of this sliding scale tax credit is 50 percent of premiums paid by small businesses. Small businesses can claim the credit on your annual income tax return, using Form 8941. Tax-exempt employers can claim the tax credit as a refundable credit by filing Form 990-T with an attached Form 8491. (IRS, What You Need to Know About the Small Business Health Care Tax Credit).

If I offer coverage to my employees, is there a minimum requirement for what I must contribute to the cost of my employees’ premiums? [3.1.5]

Minimum contribution requirements will vary based on where you purchase your coverage. For example, insurers offering coverage through the federally facilitated SHOP are prohibited from requiring employers to make a minimum contribution. However, outside of the federally facilitated SHOP and in some states operating their own SHOPs, minimum contribution rules may still apply. However, minimum contribution requirements must be waived between November 15 and December 15 of each year, allowing employers that do not meet the minimum contribution requirements to still access coverage. In addition, states may independently require employers offering coverage to make a minimum contribution to the cost of their employees’ premiums. (45 C.F.R. § 155.705(b)(11)(C) and (D); 45 C.F.R. § 147.104).

If I offer coverage, is there a minimum threshold for the number of employees that must enroll?[3.1.6]

In most, but not all, states, if you purchase coverage through the SHOP, 70 percent of eligible employees must enroll in coverage. SHOPs in some states may have slightly higher or lower thresholds, while only a few have prohibited such rules. Outside of the SHOP, minimum thresholds may vary across insurers. However, all insurers are required to waive this requirement between November 15 and December 15 of each year, allowing employers that do not meet the minimum participation requirements to still access coverage. (45 C.F.R. § 155.705(b)(10)(i); 45 C.F.R. § 147.104).

I got this notice that says I can renew in my insurance plan, but it has all this language on what my plan doesn’t cover. Should I renew? What are the benefits and disadvantages of doing that?[3.1.7]

Your notice likely relates to the renewal of a transitional or grandmothered policy, which can be either an individual or small group health plan. Under current federal policy, these plans, which existed prior to the Affordable Care Act (ACA), do not have to meet certain provisions of the ACA. States can allow these types of health plans to continue to be renewed until October 1, 2017; however, transitional policies cannot extend past December 31, 2017. Insurers that offer these plans must provide the following information in their renewal notices

  1. Any changes in the plan options that are available to you;
  2. Which of the ACA consumer protections are not included in any coverage that continues;
  3. Your potential right to enroll in a qualified health plan offered through a Health Insurance Marketplace, possibly including financial assistance;
  4. How to access such coverage through a Marketplace; and
  5. Your right to enroll in health insurance coverage outside of a Marketplace that complies with the ACA consumer protections.

The advantage of renewing is that you can continue in your health plan if you like it and you believe it provides coverage of the services and providers you need. The disadvantage is that these plans don’t have to comply with ACA consumer protections like providing coverage of ten categories of health services referred to as essential health benefits, limiting out-of-pocket costs, and not discriminating based on health or gender when setting premium rates. Also, you may be eligible for financial assistance that is only available when you buy a health plan through the marketplace. See this FAQ on additional information about financial assistance. (CMS, Insurance Standards Bulletin Series - Extension of Transitional Policy Through Calendar Year 2017).

I’m going to buy a plan through the SHOP. When can I enroll in coverage?[3.1.8]

Small employers can generally enroll in coverage at any time during the year, either through the SHOP or in the outside market. During most of the year, insurers may condition enrollment on meeting minimum participation rules and/or contribution requirements. (While insurers participating in the federally run SHOP cannot apply minimum contribution requirements, insurers in the outside market and some state-based health insurance marketplaces may apply such rules.) However, insurers must waive these rules from November 15 to December 15 each year and allow groups that don’t meet these rules to enroll in coverage. (45 C.F.R. § 155.725; 45 C.F.R. § 147.104; 79 Fed. Reg. 30240, May 27, 2014).

I want to buy coverage through the SHOP. Can my employees pick their own plan?[3.1.9]

In 2016, employee choice is expected to be available in all states. This means employees can pick any plan at a given metal level, such as silver, or to pick between multiple plans offered by a selected insurer. Typically, if an employer chooses to provide greater choice to their employees, the employer will select a “reference plan” to calculate how much the employer will contribute to their employees’ premiums. If employees choose to purchase a more expensive plan than the “reference plan,” they may be responsible for the additional cost. If they choose to purchase a less expensive plan, they may be able to reduce their portion of premium expenses compared to what they would owe if they selected the reference plan. Check with your health insurance marketplace to determine what plan choice options your employees may have. (79 Fed. Reg. 30240, May 27, 2014).

Does SHOP allow me to buy a pre-established level of coverage and let my employees buy a higher level of coverage if they make up the difference?[3.1.10]

In some states, the SHOPs currently only offer a traditional shopping approach. You will be able to pick one plan for your employees and determine what percentage you want to contribute. However, in other states, you will be able to choose a benchmark plan on which you base your contribution level, and your employees can choose that plan or more or less expensive plans. If they buy a more expensive plan, they would make up the difference, while they could reduce their premium if they purchase a less expensive plan. This option, often referred to as “employee choice,” is expected to be available in the SHOP in all states by 2016.

I’m interested in the SHOP but there aren’t any participating insurers in my area (or there’s only one insurer participating but I don’t like them). Can I still get coverage through the SHOP, and can I still get the tax credit?[3.1.11]

In most states, you can purchase coverage outside the SHOP. However, beginning with your first plan year starting in 2014, you will not be eligible for the small business health insurance tax credit if you choose to purchase coverage outside of the SHOP.

The District of Columbia and Vermont allow individuals and small groups to purchase coverage only through their state-based health insurance marketplace. (IRS, What You Need to Know About the Small Business Health Care Tax Credit).

I run a small business (less than 50 employees) with a mix of full-time and part-time workers. Am I required to offer coverage?[3.1.12]

No, there is no requirement for small employers to offer health benefits to their workers. (26 U.S.C. § 4980H).

Section 4

This section covers post-enrollment issues, including questions that may arise as individual use their coverage.

Chapter 1: Individual Health Insurance

Background

I was denied coverage for a service my doctor said I need. How can I appeal the decision?[4.1.1]

If your plan denied you coverage for a service your doctor said you need, you can appeal the decision and ask the plan to reconsider their denial. This is known as an internal appeal. If the plan still denies you coverage for the service and it is not a grandfathered plan, you can take your appeal to an independent third party to review the plan’s decision. This is known as an external review.

You will have 6 months from the time you received notice that your claim was denied to file an internal appeal. The Explanation of Benefits you get from your plan must provide you with information on how to file an internal appeal and request an external review. Your state may have a program specifically to help with appeals. If there is none listed for your state on this list, ask your Department of Insurance if there is one in your state.

For more information about the appeals process, including how quickly you can expect a decision from your plan when you file an internal appeal, go to healthcare.gov at https://www.healthcare.gov/how-do-i-appeal-a-health-insurance-companys-decision/. (45 C.F.R. § 147.136).

My individual plan was retroactively cancelled even though I’ve been paying my premiums. I think it might be because I was recently diagnosed with a serious health condition. Can they do this?[4.1.2]

No. Under the Affordable Care Act, insurers are not allowed to cancel (or rescind) an individual’s coverage unless that individual commits fraud or intentionally lies on his or her application for insurance. Further, insurers are no longer allowed to discriminate against any individual because of his or her health status. However, insurers may cancel coverage if a policyholder fails to pay premiums. If you believe your insurer has cancelled your coverage because of a recent diagnosis or your need for health care services, contact your state Department of Insurance. (45 C.F.R. § 147.106).

My plan sent me a notice that they didn’t meet the medical loss ratio (MLR). Will I get rebate?[4.1.3]

Yes, you will get a rebate check or the equivalent value of a rebate. The Affordable Care Act requires health insurers to meet a minimum medical loss ratio (MLR) standard. The MLR, also called the 80/20 rule, is a limit on how much premium revenue an insurer can devote to profits and administrative costs (20 percent in the individual market) compared to what they spend on patient care. If an insurance company does not meet this standard, they are required to return the difference to the policyholder. If this happens with your health plan, you will receive a notice from your insurer, including the amount you are owed. Your insurance company can provide that rebate to you in the form of a reduced premium, a lump-sum check, or, if you paid by credit or debit card, by a lump-sum reimbursement to that account. (45 C.F.R. §§ 158.101, 158.140).

I heard experts now say some women should take tamoxifen to prevent breast cancer. Does that mean it will be covered without co-pays?[4.1.4]

For some women, yes, tamoxifen must be available without co-pays. If tamoxifen is recommended for you and your plan is not grandfathered, your doctor may prescribe tamoxifen or another drug that experts say may reduce the risk of breast cancer, and your plan must cover it without any cost-sharing. This update to the preventive services benefit takes effect with plans that start after September 24, 2014. (CMS, ACA Implementation FAQs-Set 18, Jan. 9, 2014).

I thought I was entitled to maternity coverage. Why isn’t it covered?[4.1.5]

All new plans sold to individuals must offer essential health benefits, which includes maternity coverage. However, it’s possible your plan is a grandfathered plan and doesn’t have to meet this requirement, or doesn’t yet have to meet this requirement. Your insurer must tell you if your plan is grandfathered. Alternatively, you may have purchased an insurance product that is not subject to the Affordable Care Act’s requirements because it is not traditional health insurance. For example, medical discount plans, short-term insurance, and cancer-only policies are not considered health insurance and therefore not subject to the requirement to cover maternity care. If you believe you purchased one of these policies – and thought you were purchasing health insurance – you should notify your state Department of Insurance. (45 C.F.R. § 147.150).

I qualified for the cost-sharing reduction when I signed up for coverage in the marketplace. But now I’m getting more hours at work and I might not qualify anymore. Will I have to change plans now and start all over with a new deductible and out-of-pocket cap?[4.1.6]

No one is forced to change plans. However, if your income changed and you now earn more than 250 percent of poverty (which is the income limit to qualify for cost-sharing reductions), you are entitled to a special enrollment period, which gives you an opportunity to see if there is a better option based on your new circumstances. Once your insurer is notified by the marketplace about such a change in eligibility, the insurer is required to change your plan to the correct standard silver plan or plan variation, if you are enrolled in a silver plan. If your income drops and you become eligible for a cost-sharing reduction, you would be able to use a special enrollment period to move from, for example, a bronze plan to a silver plan that allows you to receive the cost-sharing reduction.

If you stay in the same silver plan (but with different cost-sharing, appropriate to your income), then cost-sharing charges already paid during that year must be counted against the cost-sharing required under the new version of the plan. However, if you move from a silver plan to a bronze plan (even with the same insurer), your new plan isn’t required to count the cost-sharing you already paid, although the insurer could choose to do that. (45 C.F.R. § 155.420).

What happens if I end up needing care from a doctor who isn’t in my plan’s network?[4.1.7]

Plans are not required to cover any care received from a non-network provider, though many plans today do, at least to some extent. If you do receive care out-of-network, it could be costly to you. Generally, plans that provide an out-of-network option cover such care at a lower rate (eg, 80 percent of in-network costs might be reimbursed but only 60 percent of non-network care.) In addition, when you get care out-of-network, insurers may apply a separate deductible and are not required to apply your costs to the annual out-of-pocket limit on cost-sharing. Non-network providers also are not contracted to limit their charges to an amount the insurer says is reasonable, so you might also owe “balance billing” expenses.

If you went out-of-network because you felt it was medically necessary to receive care from a specific professional or facility – for example, if you felt your plan’s network didn’t include providers able to provide the care you need – or if you inadvertently got non-network care while hospitalized if the anesthesiologist or other physicians working in the hospital don’t participate in your plan network – you can appeal the insurer’s decision. If there is a Consumer Assistance Program in your state, staff in this program can help you file your appeal. (45 C.F.R. § 156.130; 45 C.F.R. § 147.136).

I was in the hospital on January 1, 2017, when my coverage changed from my old plan to my new, marketplace plan. My provider during that episode of treatment is no longer in my plan’s network and I’m worried I’ll face higher cost-sharing as a result. Is this allowed?[4.1.8]

Yes, plans can charge you more for your providers who are out-of-network, but you may be able to get a break on your costs because you were in the middle of a hospital stay when your plan changed. Marketplace plans are encouraged – though not required – to adopt policies to prevent disruptions in treatment of episodes of care, and some states require insurers to guarantee the continuity of care. Insurers can do this by considering a provider as being in the plan’s network when there is an acute episode of care, such as your hospital stay, at the start of the plan year. However, insurers that choose to adopt a policy like this to help patients transition to new coverage can make the policies apply only temporarily.

My doctor says I need a prescription drug, but it’s not in my health plan’s formulary. I didn’t realize that when I enrolled in the plan. Shouldn’t my plan be required to cover a drug that my doctor says I need?[4.1.9]

All new plans sold to individuals and small employers must have procedures in place to allow enrollees to request and gain access to clinically appropriate drugs even if they are not on the formulary. However, that process may take time, and you may need immediate access to drugs your doctor prescribed. Therefore, marketplace insurers are encouraged to temporarily cover non-formulary drugs (including drugs that are on the plan’s formulary but require prior authorization or step therapy) as if they were on the formulary. This policy would apply for a limited time – for example, during the first 30 days of coverage – and is not required of insurers. But hopefully it will give you enough time to request an exception to the formulary so you can get your prescription covered. (45 C.F.R. § 156.122; 81 Fed. Reg. 12204, Mar. 8, 2016)

What should I do if my plan doesn’t adopt these policies and I have to pay out-of-network charges or can’t get the drug that I need?[4.1.10]

As with any coverage denial, you can appeal the health plan’s decision, first for a review by the plan (known as an internal appeal) and then by an independent third party (known as an external appeal). The plan must notify you of their decision regarding your internal appeal within specific timeframes: with 72 hours for urgent cases, 15 days for prior authorization, within 30 days for services have received. If you require urgent care, you can request an internal and external review at the same time, and you must receive a decision as soon as is required by your condition and at least within 72 hours of your request. Note that appeals must be made within 180 days of a denied claim for an internal review and within 60 days of the date that an insurer sent you an internal appeal decision. You should also report the issue to your state insurance regulator. (45 C.F.R. § 147.136).

I pay more for my plan because I’m a smoker. If I stop smoking after I sign up, will my rates go down?[4.1.11]

Your insurer doesn’t have to lower your rates to reflect your new non-smoker status until you renew your coverage. (45 C.F.R. § 147.102)

Are annual physicals for adults and children available without cost-sharing as part of the preventive service requirements?[4.1.12]

Yes, routine physicals are covered as part of the preventive service requirements. This means that insurers must provide coverage for preventive health services currently recommended by the United States Preventive Services Task Force (USPSTF) and federal guidance, which currently includes the following:

  • Evidence-based services that the United States Preventive Services Task Force (USPSTF) has currently rated as an “A” or “B”
  • Immunizations for routine use recommended by the Centers for Disease Control and Prevention
  • Evidence-informed preventive care and screening for infants, children, and adolescents provided for in comprehensive guidelines supported by the Health Services and Resources Administration
  • Evidence-informed preventive care and screening for women provided for in the comprehensive guidelines supported by the Health Services and Resources Administration to the extent they are not included in the USPSTF recommendations.

Some plans will also cover some limited services prior to meeting a deductible such as primary care visits, some urgent care, or a limited number of prescription drug refills. Check your Summary of Benefits and Coverage for information on what services are covered before the deductible is met.

Under federal rules, insurers must provide coverage for preventive health services that the USPSTF recommends at an A or B rating without any cost-sharing requirements such as a copayment, coinsurance, or deductible. For example, if you are man 35 and older and go to the doctor’s office for an annual physical, and are screened for cholesterol abnormalities as part of your annual physical, the insurance company cannot impose cost-sharing for either the physical or the cholesterol abnormalities screening. Note, however, that the law covers preventive care and if there is a medical reason for a service other than prevention, then you may have some cost-sharing requirements. Take the previous example with the man 35 and older, if he goes into his annual physical to discuss reoccurring stomach pain and the doctor bills separately for an office visit for any services to address the abdominal pain, these services will likely not be included as preventive care. You can find a list of USPSTF recommended preventive services here. (45 CFR § 147.130(a)(2)).

I thought a colonscopy screening was a free preventive service. When I went in for my screening, an abnormal growth or polyp was found and removed. I just received a bill for the removal of the growth. What can I do?[4.1.13]

Yes, this is considered a recommended preventive service and must be covered without any cost-sharing to you. You can appeal this claim starting with the internal appeals procedure your insurer must provide you. See FAQ 4.1.1 about appeals. Federal guidance currently requires insurers to cover any growths or polyps removed during a colonoscopy performed as a screening procedure. (CMS, Affordable Care Act Implementation FAQs – Set 12).

I went for a preventative screening colonoscopy and received a bill for the anesthesia used during my procedure as well as for the pathology exam to examine the polyp that the doctor found. Is this allowed?[4.1.14]

No. Anesthesia must be covered without cost-sharing if your doctor determines that anesthesia services are medically appropriate for you. The pathology exam for the polyp biopsy must also be covered without cost-sharing because this is an integral part of the colonoscopy preventative screening to determine whether a polyp is malignant. Additionally, if your doctor determines that you need a pre-colonoscopy consultation to determine whether or not you are healthy enough to undergo the preventive colonoscopy, the consultation must be covered as well without cost-sharing. (CMS, Affordable Care Act Implementation FAQs – Set 26 and Set 29).

I need a hip replacement and when I asked my insurer about coverage, I was told that my plan uses reference pricing. What is that?[4.1.15]

Reference pricing is when an insurer or health plan will pay a set amount (a “reference price”) toward a particular procedure. The consumer can go to a provider who has negotiated a price with the insurer that is equal to or less than the set amount the plan will pay and have the whole service covered. If a consumer goes to a provider that charges more than the reference price, he or she must pay the difference between the reference price and the price charged. It’s up to the insurer to decide whether or not the difference a consumer pays between the reference price and the price of their own care can count toward the plan’s annual limit on out-of-pocket cost sharing.

Although guidance on this topic is limited, federal policy allows both insured and self-insured large employer plans to use reference pricing, as long as the insurer has a reasonable method to provide adequate access to quality providers. Insurers must have an easily accessible process for exceptions to reference pricing when there is no provider accepting the reference price available or when the quality of service could be compromised by using a provider charging the reference price. For example, an exception may be granted if your hip replacement cannot be obtained within a reasonable wait time or travel distance or your medical condition is such that a specialist who does not take reference pricing is needed to ensure a safe operation. Additionally, your insurer must automatically provide you with a list of services subject to reference pricing and information about the exceptions process without charge. Also, upon request, your insurer must provide you with the following information:

  • List of providers accepting reference prices for each service
  • List of providers that will only accept a negotiated price above the reference price for each service
  • Information on the insurer’s process to ensure that there is an adequate number of providers accepting reference prices that meet reasonable quality standards

There is no federal guidance at this time on how reference pricing may apply to new (non-grandfathered) plans in the individual and small-group market, but there may be federal guidance in the future, particularly as it relates to essential health benefits. (CMS, Facts about ACA Implementation (Part XXI); Dept. of Labor, FAQs about ACA Implementation (Part XIX)).

I went to my doctor’s office for a flu shot, but was charged for an office visit. I thought preventive services were covered without co-pays. How can that be?[4.1.16]

Influenza or flu shots are one of the recommended preventive services that insurers must cover without cost-sharing as long as the shot is provided by an in-network provider. Whether the insurer has to cover the office visit, however, depends on whether there was a medical reason other than prevention for your doctor’s visit. So if your flu shot wasn’t part of your annual physical, the office visit is not a preventive service. See FAQ 4.1.12 for more on preventive services. (45 CFR § 147.130(a)(2)).

One of my prescription drugs isn’t covered under my health plan and the other prescription drug is in a really high cost specialty tier, making it really expensive. What are my options?[4.1.17]

For your non-covered drug, under federal rules, a health plan must make available an “exceptions process” that allows an enrollee to request coverage for a clinically appropriate prescription drug not covered under the health plan’s formulary. The exceptions process must also include a process for requests during an emergency or exigent circumstance when not getting the drug would endanger the enrollee’s health or life or when an enrollee is already taking the drug not covered under the health plan (i.e., is undergoing a course of treatment). In an exigent circumstance, the health plan must make its determination no later than 24 hours after receiving the request and if granted, must provide coverage of the drug throughout the exigent circumstance or course of treatment. Federal rules also strongly encourage health plans to provide the drug during the exceptions process and, if coverage is granted, in future coverage if an enrollee decides to continue with the health plan. Federal policy also encourages health plans to cover a transitional fill of non-formulary drugs to new enrollees. If your health plan denies coverage after you go through the “exceptions process,” you can go through the appeals process. You can learn more about the appeals process at FAQ 4.1.1. For the high cost specialty tier drug, health plans cannot impose out of pocket costs that exceed $7,150 under an individual plan and $14,300 under a family plan for covered benefits in 2017. (45 CFR §156.22; 81 Fed. Reg. 12204, Mar. 8, 2016).

There’s a co-pay for my heartburn medicine, but not for the generic brand. It that allowed?[4.1.18]

Yes, if a generic drug is medically appropriate, then an insurer can impose a cost-sharing requirement on the brand drug. However, if your doctor determines that there is a medical reason for you to have a brand drug rather than the generic drug, your insurer must have a process to waive the cost-sharing for the brand drug. Note that an insurer can impose a separate cost-sharing limit for prescription drugs versus medical services, but the total combined limit cannot exceed $7,150 for self coverage and $14,300 for family coverage in 2017. (81 Fed. Reg. 12204, Mar. 8, 2016)

I just found out that my provider is no longer in my network and I’ve been seeing him for years. What are my options?[4.1.19]

If it’s still during open enrollment, for 2017 coverage: November 1, 2016 to January 31, 2017, you can switch into another health plan that has your provider in the network even after your coverage start date. Information on how to make sure your provider is in a plan’s network can be found here. Unfortunately, if it’s past open enrollment, you can’t switch plans, but there are a few options. First, depending on the plan rules, you may be able to see your provider, but at higher cost-sharing amounts. But note that the provider may be able to bill you the amount the insurer does not cover. The insurer is not required to count your out-of-network costs or provider charges for remaining amounts toward your plan’s annual out-of-pocket cost-sharing limit. Your plan’s Summary of Benefits and Coverage should include this information about out-of-network costs and an insurer must provide this document to you when you enroll, renew, upon request, or whenever there are any significant changes to your plan. Second, you can file an appeal with the insurer to see if you can obtain care from your out-of-network provider at in-network cost-sharing. See FAQ 4.1.1 about how to make an appeal. Finally, some states have “continuity of care” laws that require insurers to pay for services from a provider who leaves the network for a set period of time. These laws vary by state, but if you live in a state with such a law, you may be able to get coverage for services from your provider for a set period of time. (45 C.F.R. § 147.200; 81 Fed. Reg. 12204, Mar. 8, 2016).

One of the reasons I chose my health plan was because my prescription drugs are covered. Can my health plan make changes to what it will cover once I’ve enrolled, and how will I know ahead of time? [4.1.20]

Yes, in nearly every state plans can make mid-year changes to the formulary. Some states limit the circumstances under which a drug may be removed from a formulary; for example, some states require plans to continue to cover drugs for consumers who have already been approved to take them. Other states require prior notice of formulary changes. You may want to contact your state Department of Insurance to find out what protections apply to you. See Other Resources for a list of state Departments of Insurance.

Marketplace insurers must make the formulary or list of covered drugs available to consumers on their websites. Consumers should be able to easily access a health plan’s formulary on an insurer’s website without creating an account or entering a policy number to access the information. In addition, the website link to the formulary should also be included in the Summary of Benefits and Coverage, which provides information on the covered benefits and applicable cost-sharing amounts, and on the marketplace website. ). (45 C.F.R. § 147.200; 80 Fed. Reg. 10750, Feb. 27, 2015).

I have a $2,000 deductible but I don’t understand how it works. Can I not get any care covered until I meet that amount?[4.1.21]

A deductible is the amount you have to pay for services out-of-pocket before your health insurance kicks in and starts paying for covered services. Under the ACA, preventive services must be provided without cost-sharing requirements, like meeting a deductible, so you can still get preventive health care that is recommended for you. See this FAQ on preventative services. (45 C.F.R. § 147.130).

I received a Form 1095-A called the “Health Insurance Marketplace Statement” in the mail.  What is it and what do I do with it?[4.1.22]

Form 1095-A is the form that the health insurance marketplace uses to report information about your marketplace coverage to the IRS.  The marketplace is required to send all consumers with marketplace coverage this form with information about your coverage and if applicable, any premium tax credits you received in prior years or will claim. If you received premium tax credits in advance, you’ll need this form to complete IRS Form 8962, which is the form you will use to reconcile the amount of any advance premium tax credits you received based on your projected income with what you should have received based on your actual income. (Healthcare.gov, How to Use Form 1095-A).

What if there's a mistake on my Form 1095-A? [4.1.23]

You should contact the Marketplace and tell them about the error so they can resolve the issue or send a corrected Form 1095-A. (Healthcare.gov, How to Use Form 1095-A).

How do I show that I got an exemption?[4.1.24]

If you received an exemption from the Marketplace or are claiming an exemption while filing your taxes, you should complete and return IRS Form 8965 with your tax return. Note that if you received a Marketplace exemption, you will need to note the Exception Certificate Number (ECN) you received from the Marketplace on Form 8965. (IRS, Form 8965, Health Care Exemptions).

Chapter 2: Employer-Sponsored Coverage

Frequently Asked Questions

I was denied coverage for a service my doctor said I need. How can I appeal the decision?[4.2.1]

You will have 6 months from the time you received notice that your claim was denied to file an internal appeal. The Explanation of Benefits form that you get from your plan must provide you with information on how to file an internal appeal and request an external review. If your plan is fully insured, you can get help filing an appeal from your state Department of Insurance. Your state may have a program specifically to help with appeals. If there is none listed for your state on this list, ask your Department of Insurance if there is one in your state. If you have a self-funded plan and have questions or need help, contact the Department of Labor.

For more information about the appeals process, including how quickly you can expect a decision from your plan when you file an internal appeal, go to healthcare.gov at https://www.healthcare.gov/how-do-i-appeal-a-health-insurance-companys-decision/. (45 C.F.R. § 147.136).

I got a letter saying my employer plan didn’t meet the medical loss ratio requirement (MLR). Will I get a rebate?[4.2.2]

Yes, you will get a rebate check or the equivalent value of a rebate. The Affordable Care Act requires health insurers, including those providing employer group plans, to meet a minimum medical loss ratio (MLR) standard. The MLR, also called the 80/20 rule, is a limit on how much premium revenue an insurer can devote to profits and administrative costs (20 percent in the individual and small employer markets and 15 percent in the large employer market) compared to what they spend on patient care. In the employer group market, if an insurance company does not meet this standard, they are required to return the difference to the policyholder (usually the employer) or directly to subscribers (employees) in the form of a rebate or reduction on future premiums. If the rebate goes to the employer, it must be used for “the benefit of subscribers,” i.e., in the form of a cash check or a discounted employee premium. ((45 C.F.R. § § 158.101 and 158.140).

I heard not all plans have to meet all rules. How do I know if my plan has to comply?[4.2.3]

That’s right. Plans that were in existence on March 23, 2010 are known as “grandfathered” plans and don’t have to meet all the rules. See this FAQ for more on what a grandfathered plan is. Grandfathered plans are exempt from many of the Affordable Care Act rules for plans, including the requirement to cover preventive services without cost-sharing and to limit out-of-pocket costs. Your plan must tell you if it is grandfathered in any plan documents they send you. Over time, all plans will lose their grandfathered status and have to comply with rules that only apply to new plans. Note, however, that some rules don’t apply to self-insured plans, even if they are new (non-grandfathered).

It is also possible that your employer renewed your current plan in 2013, before it was required to come into compliance with most of the Affordable Care Act’s consumer protections. Referred to as transitional or “grandmothered” policies, most states allow small employers to keep these noncompliant policies if they were in effect on October 1, 2013 and renewed before January 1, 2014, and also meet certain notice requirements.

See Other Resources tab for more information on how the Affordable Care Act’s insurance rules apply to different plans. (45 C.F.R. § 147.200; 45 C.F.R. § 147.140).

My employer plan still has an annual limit. Is that still allowed?[4.2.4]

Plans can no longer have annual or lifetime limits on benefits that are considered essential health benefits. However, plans can apply annual limits to services that are not part of the essential health benefits, even if they are covered services. Plans are also allowed to impose non-dollar limits on benefits, such as visit limits. Check the details of your plan to see how the annual limit is applied in your coverage. Your Summary of Benefits and Coverage will provide that information. (45 C.F.R. § 147.126; 45 C.F.R. § 147.200).

I thought there was a cap on my out-of-pocket costs, but I’m getting billed for something that puts me well above the limit. How can that be?[4.2.5]

All new (non-grandfathered) plans must limit out-of-pocket costs to $7,150 for individuals and $14,300 for a family in 2017 for services that are considered part of the essential health benefits and that are obtained in-network. There are a few possible explanations for why you are getting billed for something that puts you above the limit. First, if you obtained an item or service not considered part of the essential health benefits, or received care out-of-network, your health plan is not required to apply those costs towards the limit on your out-of-pocket costs. Plans can also exclude non-covered services. Second, it’s possible that your plan is grandfathered and doesn’t have to comply with this rule. Finally, if your plan has separately administered benefits, for example, for prescription drug coverage, it can have separate out-of-pocket limits, but the total of all caps combined cannot be more than $7,150 for an individual or $14,300 for a family. Check the details of your plan to see how the out-of-pocket limit is applied in your coverage. Your Summary of Benefits and Coverage will provide that information. (; 45 C.F.R. § 147.140; 81 Fed. Reg. 12204, Mar. 8, 2016).

My plan wants me to participate in a health risk assessment in order to get a discount on my premium. What are my rights?[4.2.6]

Your employer can offer rewards or penalties to encourage employees to take a health risk assessment. As long as your employer doesn't require you to meet a health standard that the assessment will reveal, such as a target body mass index (BMI) or cholesterol level, then your employer is not limited in the rewards or penalities imposed for participation in a health risk assessment. (45 C.F.R. § 146.121).

I had to complete a health risk assessment and now my employer is offering me a discount on my health insurance premiums if I will lose weight, stop smoking, and lower my blood pressure. What are my rights?[4.2.7]

Your employer can offer rewards or penalties to encourage employees to take a health risk assessment, and there are no limits on employers that do just that. If, however, you must also meet a health standard, like losing weight or lowering your blood pressure, your employer must meet additional requirements. Those requirements are:

  • Every individual must be given an opportunity to qualify for the reward (or avoid the penalty) once a year;
  • The rewards or penalties can total no more than 30 percent of the cost of coverage (including both your share and your employer’s share of the premium) or 50 percent of your premiums for programs to reduce tobacco use; this can be in the form of lower (or higher) premiums, deductibles or co-pays (but the limit applies to the total value of all penalties/rewards);
  • The workplace wellness program must have a reasonable chance of improving health or preventing disease and not just be a way to discriminate against workers based on their health; and
  • Those individuals who can’t meet the health standard must be given a reasonable alternative standard to meet. Where the program focuses on activities related to a health condition – such as weight loss programs for people with high body mass indices (BMIs) – an individual may be required to show proof that their doctor has advised against the program. But programs that require individuals to meet the standard (for example, a BMI of 29) or pay more must make a reasonable alternative standard available to anyone who can’t meet the health target. Any plan materials that describe the program must also give you information on how to request an alternative standard.

If you have concerns about the program your employer is offering, you can contact the Department of Labor at https://www.dol.gov/agencies/ebsa/about-ebsa/about-us/regional-offices or call 1-866-444-3272. (45 C.F.R. § 146.121).

My employer offers a smoking cessation program for smokers like me but I didn’t join it when I had the opportunity to do so in January and now I have to pay more for my premiums. Can I join the program now, in the middle of the year, and get my premiums lowered?[4.2.8]

Probably not. If you were given a reasonable opportunity to enroll in a smoking cessation program when your coverage started and you turned it down, your plan isn’t required to lower your premiums for the rest of the year if you join the program now. However, your plan can choose to do that, or give you other rewards, if you join late. (45 C.F.R. § 146.121).

When can I add family members to my employer plan?[4.2.9]

You can add family members during your employer's open enrollment period. If it is outside the open enrollment period, you may only add family members under certain qualifying circumstances, such as marriage, birth, or adoption of a child, or if your spouse loses coverage through his or her employer or another plan. In cases like these, you are eligible for a special enrollment opportunity to add a family member. If you want to enroll your family member in your employer plan, you have 30 days from the date of the triggering event to do so. (45 C.F.R. § 146.117).

I’m leaving employment and have been given the option to sign up for COBRA. What are the pros and cons of doing that? [4.2.10]

COBRA – a coverage program named after the Consolidated Omnibus Budget Reconciliation Act, a law enacted in 1986 - is considered minimum essential coverage, so if you sign up for COBRA you will meet the requirement to have coverage.

When you leave your job, your insurer must provide you (and spouse if he or she is covered) an election notice informing you of your rights to continue coverage within 14 days of when you notified the plan administrator or human resources that you were leaving your job. Your plan can require you to pay the full cost of your COBRA premiums – what you were paying before as well as s the amount your employer paid on your behalf, plus a 2% administration fee. If you are in the middle of a course of treatment, you may want use COBRA to maintain the plan that has provided you with coverage for the care you are receiving, regardless of the cost. But if that is not the case, or when your treatment ends, you may find coverage in the marketplace to be more affordable, especially if you qualify for premium tax credits. Keep in mind that having an opportunity to sign up for COBRA doesn’t prevent you from qualifying for premium tax credits. But if you enroll in COBRA, you will not be able to qualify for premium tax credits through the health insurance marketplace at the same time. If you have COBRA, you generally would have to wait until the next marketplace Open Enrollment period to enroll in a marketplace plan and receive premium tax credits, unless you exhaust your COBRA coverage. Dropping COBRA outside of Open Enrollment will not qualify you for a special enrollment opportunity to sign up for coverage in the marketplace.

If you enroll in marketplace coverage, you may need to plan carefully to avoid a gap in coverage from the time your employer plan ends to the date your marketplace coverage takes effect. For example, if you sign up for a marketplace plan on the 15th of the month or later, your coverage won’t begin until the first day of the second following month. To avoid a gap in coverage, you can elect COBRA to begin once your employer plan ends and cancel your COBRA coverage once the marketplace plan is scheduled to take effect. However, you will still need to apply for your marketplace plan within 60 days of the loss of your employer plan. (79 Fed. Reg. 30240, May 27, 2014).

I thought there was a cap on out-of-pocket costs but my prescription drug benefit requires me to pay co-pays even after I’ve met the out-of-pocket limit for other medical benefits. Is that allowed? [4.2.11]

No, in 2017, employer plans must ensure that each separately administered benefit has an out-of-pocket cap and the total of all caps combined cannot be more than $7,150 for an individual or $14,300 for a family. (81 Fed. Reg. 12204, Mar. 8, 2016)

I heard experts now say some women should take tamoxifen to prevent breast cancer. Does that mean it will be covered without co-pays?[4.2.12]

For some women, yes, tamoxifen must be available without co-pays. If tamoxifen is recommended for you and your plan is not grandfathered, your doctor may prescribe tamoxifen or another drug that experts say may reduce the risk of breast cancer, and your plan must cover it without any cost-sharing. This update to the preventive services benefit takes effect with plans that start after September 24, 2014. (CMS, ACA Implementation FAQs-Set 18, Jan. 9, 2014).

I thought that contraception was covered now covered, but I heard on the news that some employers don’t have to cover it. Is that true? [4.2.13]

Generally, all employer-sponsored health insurance must provide contraceptive coverage without cost-sharing unless your plan is a grandfathered plan. See ACA Consumer Protections for Private Coverage in Other Resources for information about grandfathered plans. There is a narrow exception for employers that are also houses of worship like a church, which may object to providing coverage based on religious reasons. Under current law, house of worship are exempt from the requirement to provide coverage for contraception.

There have been many legal challenges to the requirement to provide coverage for contraceptives and this is an area that is constantly evolving. If you have a question, you should ask your insurer what is covered. (80 Fed. Reg. 41318, July 14, 2015).

When I went to the pharmacy to get fill my birth control, I had a co-pay. I thought all contraceptive coverage had to be free? [4.2.14]

In general, health plans must cover all 18 methods of contraceptive coverage that the FDA has currently approved unless the health plan is grandfathered. The list of approved contraceptive methods is available here. While health plans must cover all 18 methods, they are not obligated to cover each form of contraception under each method. For example, if a health plan covers both a generic and brand name birth control pill, it can impose cost-sharing on the brand name over the generic as part of its medical management. However, if your doctor determines you should take the name brand birth control because it’s medically appropriate, the health plan must cover the brand name birth control without cost sharing. (CMS, ACA Implementation FAQs-Set 26, May 11, 2015).

I was denied coverage for my substance abuse treatment with my insurer saying it is not medically necessary. When I asked for the criteria to determine whether a treatment is medically necessary, I was told that this information is proprietary. Is this allowed? [4.2.15]

No, this is not allowed and your insurer must provide criteria for making medical necessity determinations, as well as any processes, strategies, evidentiary standards, or other factors used in developing any underlying nonquantitative treatment limitation (NQTL) such as medical management or prior authorization. If your insurer is not providing this information upon request, contact your local office of the Employee Benefits Security Administration, U.S. Department of Labor at https://www.dol.gov/agencies/ebsa/about-ebsa/about-us/regional-offices. (CMS, ACA Implementation FAQs-Set 29, Oct. 23, 2015).

I had coverage through my employer last year. The IRS tax filing instructions say my employer was supposed to provide me with a Form 1095-B or 1095-C to demonstrate proof of coverage. But I've never received either of those forms. What should I do? [4.2.16]

You can file your tax return without these forms because they are not required to be filed with your taxes. These forms provide information about you, and if applicable, your family about health coverage for the tax filing year. Your employer or health insurers must provide you with a Form 1095-B or 1095-C (depending on how your receive your health insurance coverage) to be kept with your tax records. For the 2015 tax filing season, large employers and health insurers are not required to provide you with the applicable Form 1095-B or 1095-C until March 31, 2016. (IRS, Questions and Answers About Health Care Information Forms for Individuals (Forms 1095-A, 1095-B, 1095-C)).

Coverage for Employees of Small Businesses
I thought all plans had to get rid of their annual limit but my plan has said I’ve met mine. How can that be?[4.2.17]

Plans can no longer have annual or lifetime limits on benefits that are considered essential health benefits. However, plans can apply annual limits to services that are not part of the essential health benefits, even if they are covered services. Plans are also allowed to impose non-dollar limits on benefits, such as visit limits. Check the details of your plan to see how the annual limit is applied in your coverage. Your Summary of Benefits and Coverage will provide that information. (45 C.F.R. § 146.126; 45 C.F.R. § 147.200).

I thought there was a cap on my out-of-pocket expenses but I’m getting charged for services that go well beyond that. How can that be?[4.2.18]

All new plans must limit out-of-pocket costs to $7,150 for individuals and $14,300 for a family in 2017 for services that are considered part of the essential health benefits and for care obtained in-network. Plans can – but aren’t required – to apply the out-of-pocket limit to services that are not part of the essential health benefits (even if they are covered services) or for care that is obtained out-of-network. Plans can also exclude non-covered services. It’s also possible that your plan is grandfathered and doesn’t have to comply with this rule, or that this requirement has not yet taken effect for this plan. Check the details of your plan to see how the out-of-pocket limit is applied in your coverage. Your Summary of Benefits and Coverage will provide that information. (81 Fed. Reg. 12204, Mar. 8, 2016; 45 C.F.R. § 147.200).

I thought prescription drugs were supposed to be covered in all plans, but my plan doesn’t include them. Is that allowed?[4.2.19]

All new plans sold to small employers must offer essential health benefits, which includes prescription drugs. However, it’s possible your plan is a grandfathered, self-insured, or grandmothered plan and doesn’t have to meet this requirement. See Other Resources tab for more information on how the Affordable Care Act's insurance rules apply to different plans. (45 C.F.R. § 156.155; 45 C.F.R. § 156.122).