Now that Obamacare open enrollment is here, I’m getting lots of questions as to whether someone should apply for a plan ON THE EXCHANGE as opposed to one that is OFF THE EXCHANGE (exchange and marketplace mean the same thing. It seems the media can’t decide which of the two terms it prefers). It seems what confuses most people is simply the difference between the two.
So here’s the difference: whether you buy a plan On-Exchange or Off-Exchange, what you’re buying is still a health insurance policy. On-Exchange simply refers to plans that are eligible for financial assistance. Off-Exchange no such considerations exist. But it’s still health insurance. So keep that tucked away for future reference.
Here’s what I’m telling my customers. It’ll work for you too.
Whether you choose an Obamacare plan On-Exchange or Off-Exchange depends on timing as well as income considerations
So, like most things in life, it all comes down to time and money 😉
When to consider an Obamacare plan On-Exchange
When you are eligible for and would like to receive financial assistance for paying premiums and/or reducing out of pocket amounts
The amount of financial assistance is determined by family size and income as a percentage of the Federal Poverty Level (FPL). If you’re at 100%-400% of the FPL for your income level and family size, you’ll get some sort of premium assistance. If you’re over 400%, you get nothing.
You can get an estimate of the amount of help you could receive by visiting the Henry J. Kaiser Family Foundation Subsidy Estimator at http://kff.org/interactive/subsidy-calculator/.
I actually just created several charts so I can take one glance and tell them if they qualify. Actually much faster than the calculator.
If you’re age 30 or younger and need health insurance to meet the individual requirement, but have a financial hardship
Catastrophic plans are available for people age 30 and younger with financial hardship situations as defined by the Federal Government. These are very high deductible plans designed for catastrophic situations. They meet the individual mandate requirements. If you’ll remember the law requires everyone to have health insurance- called the “individual mandate.”
When it’s Open Enrollment or Annual Enrollment time
Initial Open Enrollment is October 1, 2013- March 31, 2014. If you miss this deadline, you have to wait until the Annual Enrollment period.
The Annual Enrollment Period is October 15- December 7, 2014, with coverage beginning January 1, 2015.
There is an exception- coverage in the exchange is available at other times if you have a qualifying event such as:
- Moving to a new state
- Certain changes in your income
- Changes in family (such as marriage, divorce, birth or adoption of child)
- Loss of job-based coverage
- Existing insurance is being discontinued
I’m sure there are a few other situations being discussed, but these are the major ones.
When to consider an Obamacare plan Off-Exchange
When you don’t qualify for any sort of financial assistance
The Application for Health Coverage & Help Paying Costs is 9 pages long. It requires a tremendous amount of financial information, most of which you would gather from your tax return and is estimated to take 30-90 minutes for completion. I’m confident the online application is probably an equal number of screens.
I don’t know about you, but I would rather walk on my lips than tackle this application IF I don’t have to.
Plus, the government’s already heavily involved in health insurance and knows more about you than you’d like. Do you really want to give them MORE information? (Sorry, I may sound paranoid, but there it is….) So there are valid privacy concerns as well.
When you’re outside of the initial open enrollment period or Annual Enrollment Period
If you don’t enroll by March 31, 2014 and it’s not the next annual enrollment period, and don’t have access to any other coverage (employer-based, Medicaid, etc.), you will have to purchase a plan Off-Exchange. Remember, you’ll get the health insurance since it’s now guaranteed. You just won’t get any help paying your premium or reducing your out-of-pocket.
This is a quick, down-and-dirty list. Is there a situation I missed or anything you want to add? Any questions?
My agency, Alan Galvez Insurance, is certified to assist Ohio residents with health insurance both On-Exchange and Off-Exchange. We’ve specialized in health insurance for over 25 years. We can guide you through all the red tape, pre-qualify you for premium credits and subsidies, help you select the right plan and answer your questions. You can visit our Ohio health insurance resources and request a quote. You can also contact me directly at firstname.lastname@example.org or call (800) 375-8406.