Do you have health insurance through work?
For you, the question might be: Do I need to use the healthcare marketplaces that are part of the Affordable Care Act, sometimes called Obamacare?
The simple answer is: No, you probably don’t need to. It’s possible, however, that you might want to.
A Job-Based Plan
If you are employed and have health insurance through your employer, you are most likely considered covered and will not need to change to a Marketplace plan. If you are covered, you will not need to pay a tax penalty for the 2014 tax year.
The exceptions to this are if your employer’s health plan does not offer minimum essential coverage or if the lowest cost self-only coverage meeting minimal standards is more than 9.5% of your family’s income (coverage must be “affordable”).
For example, if your family earns $30,000 a year, and your job-based plan that covers only you (just you, not your spouse or family), costs less than $2,850 annually, then it is considered affordable.
To help determine if your job-based plan meets the minimum value, HealthCare.gov has an Employer Coverage Tool that you and/or your employer can fill out. It can be found here.
Health plans that meet the minimum value standard are designed to pay at least 60% of the total cost of medical services for a typical population. That is to say, the individual being covered—you—is expected to pay no more than 40% of covered medical costs.
If you’re interested in different and/or better health insurance coverage. Perhaps you pay high premiums or your job-based plan does not provide everything you need.
The first thing you may want to do is evaluate your current health insurance policy so you can compare.
Typically employers pay part of your premiums. If you decide to opt out of a job-based insurance plan and purchase your own via the Marketplace (healthcare.gov), your employer won’t contribute to your premiums.
The second thing to do is compare similar health insurance plans in your area on the Marketplace. To view and compare plans, go to HealthCare.gov and click on “See plans before I apply.”
Remember, if your job-based plan is considered “affordable” and meets the minimum value, then you are unlikely to be eligible for lower-cost plans based on your income.
There have been some misleading stories in the press recently about how Obamacare is canceling some insurance plans. Here’s what you need to know – every insurance plan in the Marketplace must meet 10 eligibility requirements; in other words, it must offer a specific minimum level of coverage in 10 different areas.
The confusion comes from the fact that not all plans in effect prior to the implementation of the healthcare laws met all of the 10 eligibility requirements. Most of these were health insurance policies individuals had purchased themselves rather than through an employer.
When the healthcare law went into effect in March 2010, it allowed insurance companies to continue offering plans which didn’t meet the new requirements to people who had already signed up for them. They were dubbed “grandfathered plans.”
The tricky part is that insurance companies do change their plans, and often. So part of what happened was insurance companies offering these “grandfathered plans” wanted to change those plans either to remain profitable or to fit more appropriately into the Marketplace.
Insurance companies have little incentive to continue offering insurance nobody was allowed to buy. So in many cases, the insurance companies canceled the “grandfathered plans.”
If your employer is offering a health insurance plan through your job that meets the 10 basic standards as well as the minimum value standard, you probably won’t find a better deal on the Marketplace. After all, your employer is paying at least 60% of the costs.