Anyone who listens to the news knows that the open enrollment period for the Affordable Care Act (Obamacare) is approaching rapidly. The media has been playing it up, creating a sense of urgency that may have you feeling panicked. At HSA for America, we want you to know that while you do have to make sure you have an ACA compliant plan, you do not need to panic. You have time to do the research and make an informed decision regarding your health care plan. We are here to help you make that decision.
Although the Open Enrollment does, in fact, open on October 1st, this does not mean you have to decide on a plan immediately. In fact, the first year of the Affordable Care Act offers a considerable amount of flexibility. Although Open Enrollment begins in October, you have until March 31st 2014 to purchase a plan. When you choose to purchase a plan depends on when you would like to have the plan go into effect. For example, if you currently have a health insurance policy that does not expire until March, you do not have to make any changes until the anniversary date.
Deadlines for Effective Dates
All health plans purchased from October 1-December 15 will have an effective date of January 1, 2014. This deadline is, generally speaking, designed for those people who currently do not have insurance, or whose current policy expires January 1. If you fall under this category, you can make the decision about your policy at any time during this period.
If you are currently insured and your policy expires after January 1, 2014, here are the deadlines you need to keep in mind:
• January 15 for an effective date of February 1.
• February 15 for an effective date of March 1.
• March 15 for an effective date of April 1.
• March 31 for an effective date of May 1.
After March 31, the period of Open Enrollment ends and you cannot purchase an insurance policy unless you experience a qualifying event.
What is a Qualifying Event?
A qualifying event can be several things. For example, if you get married or divorced, or if you have a baby, these are qualifying events. Also, if there are substantial changes in your family income, they may be considered qualifying events. The only time you do not need one of these events is if you qualify for Medicaid or the Children’s Health Insurance Program. These are federally funded insurance programs that are income-based, and you can apply for these at any time if you meet certain income requirements.
What About HSA Insurance Plans?
The most important date to remember if you are considering switching from a more traditional health plan to a Health Savings Account plan, or if you would like to purchase an HSA for with an effective date of January 1, is December 1. As long as the plan is purchased by December 1, you will have until April 15 to fully fund your plan.
When you fully fund your plan, it means that you contribute the maximum allowed amount to your HSA. For single people under the age of 55, the amount is $3,250. For a family, that amount increases to $6,450. If you are over age 55, you are allowed an additional $1,000 contribution per year.
The Benefits to An HSA Plan
The benefits to an HSA-qualified health are many. Until now, the biggest benefit to an HSA qualified health plan has been the fact that your contribution amount is tax deductible. Also, HSA plans cost less in monthly premiums. These two factors are still important reasons to choose an HSA plan.
However, now that the Affordable Care Act is in place, there is an additional benefit. When you have an HSA and contribute the maximum amount, your Adjusted Gross Income is lowered by that amount. This can actually lower your income enough to allow you to qualify for a tax credit and lower premiums when you purchase an ACA compliant plan. For many people, this can make a huge difference in how much the insurance and out-of-pocket expenses are.
The Bottom Line
I believe that a high-deductible HSA health plan is the best one for many reasons, not the least of which is your ability to keep more of your money instead of handing it over to the insurance companies. However, there are other plans to choose from that are compliant with the ACA.
No matter which plan you decide on, do not let the media send you into a panicked frenzy as they rev up their efforts to scare you into signing up for a health plan immediately. Remember that you have the time to do the research and explore your options before you make such an important decision about how to spend your healthcare dollars.
If you have any questions about the deadlines for Open Enrollment or the different plans you can choose from, please contact one of our Personal Advisors at 866-749-2039. With years of expertise behind them, they can help you navigate the changes in the health care industry.
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.