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Open enrollment: What you need to know

By Beth Orenstein Posted : 09/29/2014

Currency Under the new healthcare law, the Affordable Care Act, nearly everyone must have health insurance. However, you can't just go out and buy health insurance whenever you want. Unless you qualify for a special exception, you can sign up only during open enrollment.

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Open enrollment for health plans for coverage that starts in 2015 is not far away. Here's what you need to know about open enrollment for coverage in 2015.

Know these dates

Open enrollment starts Nov. 15 and goes through Feb. 15, 2015.

When you sign up will determine when your coverage starts.

  • Sign up starting Nov. 14 and by Dec. 15, and your coverage will be in effect beginning Jan. 1.
  • Sign up between Dec. 16 and Jan. 15, and your coverage will kick in on Feb. 1.
  • Sign up between Jan. 16 and Feb. 15, and your coverage will start March 1.

One exception: You can enroll in Medicaid or the Children's Health Insurance Program (CHIP) any time of the year. If you are eligible for these programs for low-income families, you can enroll immediately.

Also, your health insurance coverage will start only after you have made your first premium payment.

Who needs to sign up

You need to buy health insurance if you don't have coverage through your employer or your spouse's employer.

You are older than 26 and can't be on your parents' health insurance anymore.

You may have coverage elsewhere if you're a veteran or are eligible for Medicare or Medicaid. If you do, you do not need to sign up.

What your options are

Renew your current policy: During open enrollment, you can renew your current health insurance. You may not have to do anything if you want to keep what you have. But your current plan may be changing. Watch the mail for a letter about any changes your plan intends to make in 2015.

If the changes aren't acceptable to you (your doctor is leaving the network, for example, or your drugs won't be part of its list of covered medications) you will want to look for a plan that better suits your needs. If you need to switch, open enrollment is the time.

Buy an individual policy through a marketplace or directly from an insurance provider: You want to sign up on the marketplace exchange in your state if you qualify for tax subsidies to help you pay your premiums. Qualifying depends on your family size and income. Otherwise, if you want, you can sign up for health insurance directly through a provider during open enrollment.

Make changes to your employer-based group health insurance: If you get your health insurance through your employer, the fall open enrollment period for the government-run marketplaces won't affect you. You need to sign up for coverage during your employer's open enrollment period. Some employers will automatically renew the plan you had this year. Others require that you sign up each year during its open enrollment. Ask your employer its rules so you know what you have to do. The same advice to watch for changes applies.

Change your Medicare plan: If you are enrolled in Medicare and want to make a change in your plan – such as switching to Medicare Advantage (Part C) or adding prescription drug coverage (Part D) – you must sign up during its fall open enrollment period. Medicare open enrollment is Oct. 15 to Dec. 7, and coverage starts Jan. 1. Again, open enrollment for the government-run marketplaces would not affect you.

How to select a plan

You have a choice of four metal levels: bronze, silver, gold and platinum. The amount of money that you must pay out of pocket when you use health services goes down with the metal level. Bronze plans will have the highest deductibles and copays while platinum will have the lowest. However, the premiums for the bronze plans will be the lowest and premiums will be the highest for platinum.

You have to look at your health and your usage. Do you see a doctor or other health-care provider regularly to help you manage a chronic disease or condition? Do you take costly medications? You may want a health plan that has lower copays and deductibles if you are a frequent user of services. If you are young and healthy and use few medical services, you may want a plan that costs less in premiums. Of course, you never know what can happen. And you can't change your plan outside open enrollment just because something happened to you.

Look at the out-of-pocket-maximums for the plans you're considering. Could you afford that amount should the unexpected happen? Check out the doctors and hospitals in the plan's network. Are the doctors and hospitals you prefer part of it? Some plans will only pay for those providers in their networks. Some plans will pay if you go to providers who are out-of-network, but at a lower rate than for in-network.

The plans are required to provide a list of drugs that they cover. The list is available on their websites. Check it out if you take medications to manage any conditions. See what you would pay in the different plans you are thinking of enrolling in. It may help you to compare if you make a spreadsheet.

What the plan will cover

Under the Affordable Care Act, all plans that you sign up for during open enrollment must provide at least 10 essential benefits:

  1. Outpatient care and chronic disease management (doctors' offices and clinics)
  2. Emergency room care
  3. Care if you go to a hospital and are admitted or require surgery
  4. Care if you are pregnant and after your child is born
  5. Services for mental health and substance abuse (this includes counseling and psychotherapy)
  6. Medications (though it may be limited and only certain medications)
  7. Rehab services and devices to help with injuries, disabilities and chronic conditions or to recover your physical and mental skills
  8. Blood, urine and other lab tests
  9. Preventive and wellness care
  10. And dental and vision care for children (but not adults)

Insurance plans can offer benefits in addition to the required benefits. The best way to find out what benefits each plan covers is to go to its website and compare.

What if you do nothing?

If you don't sign up for health insurance during the open enrollment period, you may have to wait an entire year to sign up. If you don't have health insurance, you could be subject to penalties at tax time.

For 2016, open enrollment will be from Oct. 15 to Dec. 7, 2015. (That's the same period it is every year for Medicare.) Starting in 2016, any coverage you elect during the open enrollment period will start Jan. 1.

You don't want to have to pay penalties. Penalties for not having insurance in 2015 will be higher than they were for 2014.

Penalties are based on your family size and income. Starting in 2015, you may have to pay up to 2 percent of your household income or $325 per adult. You will pay whichever is higher. Penalties for children without coverage are half of what you pay as a parent. So it can be up to $162.50 per child.

The penalties would be subtracted from any income tax refund you were due. You pay your income taxes for 2015 by April 15, 2016.

Other times you may be eligible to enroll

If you don't enroll during open enrollment, you must qualify for a special exception to be able to buy health insurance. You are eligible for a special exception enrollment period if:

  • You get married
  • You get divorced and were getting your health insurance through your spouse's employer
  • You have a baby or adopt a baby or place a child for adoption or foster care
  • Your spouse or partner dies and that leaves you without health insurance
  • Your spouse or partner loses a job and you had coverage through his or her work
  • You lose your job and had coverage through your work
  • Your hours are cut and you are no longer a full-time employee eligible for workplace coverage
  • You are in an HMO and move outside its coverage area
  • You leave jail or gain citizenship

If you voluntarily drop your coverage, you won't qualify for a special enrollment period. The only time you can re-enroll is during open enrollment.

If you apply for a special exception and are rejected, you can appeal the decision to the Health Insurance Marketplace.

Know these exceptions, too

You can ignore the open enrollment period if you suffered a hardship. Hardships that make it unnecessary to enroll in a health insurance plan include:

  • Being the victim of domestic violence
  • Suffering from a natural or human-caused disaster that damages your home such as a fire or flood
  • Suffering the death of a close family member or have unexpected expenses related to caring for an elderly or disabled family member
  • Being evicted from your home
  • Declaring bankruptcy
  • Being in the U.S. illegally
  • Being incarcerated

If you experience system errors when signing up, you may be able to work with a caseworker to resolve your issues and have the deadlines extended.

You also may not be required to buy health insurance if you apply for Medicaid and are rejected because your state did not expand eligibility. Also, members of recognized religious sects that have religious objections to medical insurance may be excused.

If you live abroad for most of the year (330 days), you are not required to buy insurance during open enrollment either.

Where can you learn more?

HealthCare.gov has a list of important marketplace deadlines and information about eligibility. You also can sign up to get emails about new health insurance options and benefits.

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