From where I’m sitting, it’s looks like Obamacare could have another rough rollout come November 15, when open enrollment begins for 2015. One of the main questions I’ve been getting is, “do I have to renew my plan and reapply for my premium tax credit?” This is definitely a valid question – one that has even the White House up in arms.
The government originally planned on having less traffic to their website during open enrollment this coming year due to millions of Americans auto-renewing their policy. But there’s a catch – by auto-renewing your policy you could be subjecting yourself to higher premiums and inaccurate premium tax credits.
How Auto-Renewal Works
If you purchased a plan through the federal exchange or state marketplace and take no action to your health plan this year, your health plan should automatically renew; however, your advanced premium tax for 2015 will remain the same as it was in 2014.
Here’s the catch – if the rate for a benchmark Silver plan in your area changes, so will premium subsidies. So if the rate goes up, not only will you have to pay the difference in premium, you would also have to pay the difference if your subsidies decrease.
For example, let’s say for 2014 you have a Silver plan that costs $482 a month with a subsidy of $367 a month, leaving you with a premium of $115 per month. If your premium increases 7 percent for 2015, your new premium would be $515.74. By auto-renewing, your advance subsidy will remain the same – $367 per month. This leaves you with a new premium of $148.74 out of your own pocket – a whopping 29% increase!.
How to Avoid Overpaying for Your Health Plan
Now that insurance companies have survived the first year of Obamacare, many have chosen to expand their coverage to a wider demographic area and new insurance companies have decided to come on board for 2015. This means more competition and more choices for you – and we can only hope lower rates!
To ensure you remain in the best value health plan and continue receiving the appropriate premium tax credit, HSA for America offers an Annual Comprehensive Policy Review. You can set this up by using your Personal Advisor’s online appointment calendar or by calling 866-749-2039. Because we expect a rush of interest when open enrollment begins in November, I highly encourage you to go ahead and set up your appointment now – September and October would be best.
Your advisor will review the plans available in your area, including your current plan and new plans on the market, and can re-calculate your premium tax credit based on your 2014 tax return. This will guarantee that the premium tax credit you receive is accurate and applied to your health plan accordingly.
What are your thoughts on auto-renewing? Do you plan to auto-renew or explore your options? Do you have other questions I can answer for you?
Wiley Long is President of HSA for America, and a passionate advocate for consumer-based solutions that will improve price transparency and lower health insurance and medical costs for people purchasing individual and family health insurance plans.