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Small Business Employee Benefits and HR Blog

Personal Health Insurance in 2014 - Four Things to Know Before You Buy

Whether you are shopping for a personal health insurance plan for the first time, renewing your health plan, or exploring options, it's important to know how personal health insurance has changed in 2014. 4_things_to_know_personal_health_insurance

These changes are part of healthcare reform ("ObamaCare"), and impact how you purchase a plan, how much you pay, and what is covered.

Here are the four ways personal health insurance has changed in 2014:

  1. Pre-Existing Conditions No Longer Matter 

  2. New Premium Discounts via "Tax Credits"

  3. Plans Now Cover "Essential Health Benefits"

  4. You Can't Enroll at Any Time During the Year

1. Pre-Existing Conditions No Longer Matter 

As of January 1, 2014, pre-existing medical conditions no longer matter. That's because all plans are "guaranteed-issue". This means that anyone is accepted regardless of health status, and will not pay more because of health status. The only uprating (charging more) allowed is for tobacco use, age, and location. And, health reform puts limits on the amount an insurance company can up-rate for these factors.

Prior to 2014, in most states, insurers could charge more based on health conditions, or deny applicants all together. As such, there were many people who "worked for health benefits" because they would not qualify for personal health insurance on the individual market, or if they did it would be in an expensive high-risk pool. Guaranteed-issue levels the playing field between group health plans and personal health insurance plans.

2. New Premium Discounts via the Tax Credits

Significant premium tax credits are available to eligible individuals and families, for plans purchased through the individual health insurance marketplaces. Households with income up to 400% of FPL who purchase coverage through their state's health insurance exchange are eligible for a premium tax credit to reduce the cost paid for the premium. That translates to an individual earning up to $45,960 in 2013 or a family of four earning up to $94,200 in 2013 (see these 2013 FPL charts).

To be eligible, you cannot be offered affordable, qualified health insurance through an employer. However, being offered a defined contribution healthcare allowance does not disqualify you from tax credits (e.g. if you receive a health insurance allowance).

Lower income households may also be eligible for additional cost-sharing subsidies or Medicaid, which is expanding eligibility in some states.

3. Plans Now Cover Essential Health Benefits

As of 2014, all personal health insurance plans will be required to include 10 essential health benefits, a core package of covered medical services. The ten essential health benefits are:

  1. Ambulatory patient services

  2. Emergency services

  3. Hospitalization

  4. Maternity and newborn care

  5. Mental health and substance use disorder services, including behavioral health treatment

  6. Prescription drugs

  7. Rehabilitative and habilitative services and devices

  8. Laboratory services

  9. Preventive and wellness services and chronic disease management

  10. Pediatric services, including oral and vision care

Previously there was no standard or requirement for what individual health insurance covered. For example, some medical services such as maternity were almost never covered by a standard plan (instead offered as an optional rider you were required to pay more for).

4. You Can't Enroll at Any Time During the Year

If you're planning on signing up for coverage, it is important to know you cannot just sign up for coverage at any time. There are set open enrollment periods when you can enroll in personal health insurance. The first open enrollment period started October 1, 2013 and goes through March 31, 2014. The marketplace open enrollment periods ensure that you don’t wait until you get sick to enroll in coverage, or switch to more comprehensive coverage when you are about to have an expensive medical procedure.

Here's a summary of key dates for enrolling in individual health insurance for 2014 and beyond:

  • October 1, 2013: Online health insurance exchanges opened for plan shopping and enrollment.

  • January 1, 2014: Earliest coverage date for new qualified health plans.

  • March 31, 2014: Open enrollment for qualified health plans ends. March 31 is the last day to sign up for a qualified health plan. If you miss this date, you will have to wait until fall 2014 to enroll, unless you have a qualifying event. Then you can enroll in a special enrollment period

  • November 15, 2014 - February 15, 2014: Open enrollment period for 2015 coverage. 

Questions about how individual health insurance has changed? Leave a comment below.

 

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