Can you save on premiums with a Marketplace plan? Here’s what to expect when you enroll.
5 Things to Know About 2020 Health Insurance Open Enrollment
Each year, the Federal Health Insurance Exchange – also known as the Marketplace – allows American consumers to enroll or re-enroll in a health insurance plan through the marketplace during a specific “open enrollment” period.
This year, open enrollment for health insurance plans that start Jan. 1, 2021, is from Nov. 1 to Dec. 15. To check out plans and enroll, visit HealthCare.gov.
But first, click or swipe to learn what to expect when you enroll in a Marketplace plan.
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1. You must provide information before shopping
Since where you live and other factors matter when it comes to health insurance on the Marketplace, you can’t just go in and preview general rates for your age and household members. You must narrow your personal information down before you can see available plans and their monthly premiums.
To get an overview of available health insurance plans, click on the “Preview Health Plans and Prices” button on the Marketplace homepage.
Then you’ll need to input your zip code, city and state, a plan ID number if you’re already enrolled in a 2020 plan (you can skip this step and still continue the search process) and information about your household such as number of people and annual income.
Then you will have access to several plans available, along with their monthly premiums.
2. You may qualify for a lower premium
If your expected annual income qualifies, you may be able to get a “premium tax credit,” which is a government subsidy that could possibly lower your monthly insurance premium by hundreds of dollars. How many people are in your household is also considered when determining whether you qualify for a premium tax credit.
“In general, individuals and families may be eligible for the premium tax credit if their household income for the year is at least 100 percent but no more than 400 percent of the federal poverty line for their family size,” according to the IRS.
Curious about whether you can save money on monthly health insurance premiums with a premium tax credit? It’s easy to find out on the Marketplace income levels and savings page.
3. Missing open enrollment could leave you without health insurance
If you fail to enroll in a health insurance plan between November 1 and December 15, you won’t be allowed to sign up for a plan again until next year’s open enrollment in the fall unless you have a life event that qualifies you for a “special enrollment period.”
You may qualify for a special enrollment period if you got married, had a baby, adopted a baby or had a foster child or lost your health insurance due to divorce or legal separation. If someone on your Marketplace plan dies, causing you to no longer be eligible for your current health plan, you may also qualify for a special enrollment period.
4. You may also qualify for cost-sharing reductions
If you qualify for a premium tax credit, you may also be able to save even more money if you’re eligible for what’s known as “cost-sharing reductions.” A cost-sharing reduction is a discount that lowers the amount you must pay for deductibles, copayments, coinsurance and your out-of-pocket maximum.
These savings don’t apply to just any plan, however. If you qualify for cost-sharing reductions, you can only receive them when you’re enrolled in a silver plan.
5. The day of reckoning comes at tax time
If you receive a premium tax credit on a 2021 Marketplace plan, you must “reconcile” that amount when you file income taxes for 2021. What that means is you need to show whether you actually qualified for the premium tax credit based on your final income for the year.
If there’s a difference between the amount of the premium tax credit you received in advance to lower your monthly premiums and the amount you actually qualified to receive based on your final income at year’s end, that will affect either your refund amount or how much tax you’ll owe.
According to HealthCare.gov: “If you used more premium tax credit than you qualify for, you’ll pay the difference with your federal taxes. If you used less, you’ll get the difference as a credit.”
Published by Debt.com, LLC