NOTE: All information herein is still current, just note that as of the tax year beginning January 2019 individuals will no longer incur a penalty for not having health insurance.
As you know, the Affordable Care Act requires everyone to have health insurance or a compliant health coverage option. Also known as Obamacare, the ACA was signed into law on March 23, 2010 and enforcement began in January of 2014. The amount of the fine (assessed when you file your annual Federal taxes) is determined by when a person’s work-provided insurance is lost, one’s household income, and one’s amount of time without coverage. But just to give you an idea, by 2016, the fine will be up to $695 per adult and $347 per child!
There are exemptions to the individual mandate, but for most folks, those who are eligible for affordable health insurance but don’t enroll or go without health insurance for more than 3 months (in a calendar year) may be subject to the fine. So staying compliant should be of interest to you if you don’t want your tax return eaten into or to be required to make a payment at tax time. So how does this work if you’ve lost your job after the open enrollment period for ACA health insurance?
First, let’s start with a few definitions/acronyms:
ACA – Affordable (health) Care Act
ESI – Employer sponsored insurance
MEC – Minimum essential coverage • (See what counts as MEC.)
SEP – Special enrollment period
1. Do I qualify? If you’ve lost your job involuntarily (eg. not quit) and that company was the source of your healthcare insurance, then yes. Know that your ESI must terminate before a subsidized ACA Marketplace plan’s coverage can begin. Anyone who is lawfully present in the US can enroll in a Marketplace plan, but not everyone can receive the tax credits. Even if you don’t receive tax credits, or if you have Medicare but you want a secondary plan, you can enroll in a Marketplace plan.
2. What happens if you lost your job before the ACA open enrollment period for this year begins–or after it has closed? Call the Marketplace at 800-318-2596. Explain that you’ve lost (or will lose because of your forthcoming layoff) your health insurance due to an involuntary loss of work, and ask for an SEP. That will give you 60 days to apply for a Marketplace plan. The 60 days begins the day of your qualifying life event (for example the date you lost your job.) Then go to healthcare.gov to choose a plan, having coverage begin the day after your ESI ends.
3. What is the deadline/timeframe? You’ll want to get on top of this quickly after your job loss in order to avoid going the aforementioned 3 months without health insurance. This will help you avoid the fine and also having to wait all the way until the next year’s open enrollment period. Now let’s say that you know the date of your last day of work at your job in advance, it is recommended that you go ahead and apply for a Marketplace plan. Time is also of the essence since, as mentioned above, your SEP begins the day of your qualifying life event—not necessarily the day you call to request your SEP.
4. Are there other ACA compliant options besides Obamacare or a costly independent policy? Yes. If you’re not already covered by your spouse’s health insurance, you could try to be added to that plan. Medicaid and Medicare, if you qualify. Christian Healthcare Ministries has a cost sharing plan that can help offset the cost of your healthcare. Here’s more information on how it works. Medi-Share is another similar option.
More information on this topic can be found here and at NHeLP, Kaiser Family Health, Center for Budget and Public Policy, Community Catalyst, Families USA, and Enroll America.
If you miss the December 15th deadline for ACA Marketplace enrollment, you still have a couple of options: Farm Bureau Health Plans and short-term coverage. Be aware the latter is less comprehensive than other types of insurance, and that both can potentially deny consumers with pre-existing conditions. (The Tennesseean p. 5D, 2 Dec. 2018)
My condolences on your job loss and best wishes on your choice of health coverage. For an Action Plan to help you get started on your job search, see this earlier article here at my blog. Thanks to Rachel Clifton at the Tennessee Justice Center for her help with the information in this article. Please comment if you have any additional helpful information to add. For a video presentation of this post, click the image below. And if this information has been helpful to you, please share it with your social network.
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