Steve Hamblin/Fuse/Thinkstock(NEW YORK) — Whether choosing employer-sponsored plans or health exchange coverage, the financial stakes of choosing the right health care plan have been raised even higher this year.
An individual must have some kind of coverage or pay a penalty. For 2016, that’s $695 per adult, which will have to be paid the following tax year — more than double the previous penalty of $325.
With children under the age of 18, who are on the hook for half as much as adults, fees can come to a maximum of $2,085 per household (from $975 previously), or 2.5 percent of taxable income, whichever is greater.
“There’s a danger that people are not going to realize when they start working on their taxes in February, March or April,” said Timothy Jost, a professor emeritus at Washington and Lee University School of Law.
Jost urges everyone to get some kind of coverage and offered some tips about what you should know when choosing health care:
Know your employer’s open enrollment period.
“The basic message is open enrollment is opening soon and people who are not enrolled need to enroll to avoid the much larger penalties for 2016 because it may be too late when they realize,” Jost said.
Open enrollment for all healthcare exchanges is earlier for 2016: Nov. 1 to Jan. 31, compared to Nov. 15 to Feb. 15 last year. Individuals may qualify for special enrollment periods beyond this time frame if they have a life event such as getting married, certain changes to your income, having a baby or moving to a new state.
If you want coverage to start right on Jan. 1, you must sign up no later than Dec. 15, said Karen Pollitz, senior fellow at the Kaiser Family Foundation. If you wait to the end of open enrollment, your new coverage won’t take effect until March 1.
2. Employer-sponsored vs. exchange coverage?
Some employees can decline employer-sponsored insurance and purchase coverage through the exchange if it meets the law’s definition of “unaffordable.” If the employee’s contribution toward a plan is less than 9.5 percent of the employee’s individual adjusted gross income, then it is deemed affordable.
An employee with low enough wages may also be eligible for Medicaid, Jost said.
3. Research a plan’s total cost
Don’t just price shop, Pollitz said. Some employers offer very minimal benefits, Jost said. What’s the out-of-pocket limit? Does your employer offer a Health Savings Account (HSA), which can roll over and is yours to keep?
“When you’re considering different plan deductibles, ask yourself if you could really afford to pay that much in medical bills,” Pollitz said. “Often it’s best to pick the most comprehensive plan coverage you can afford.”
4. Vocabulary and mechanics
Healthy people who need less care should be more comfortable paying lower premiums (the amount paid for your health plan by you and/or your employer) with less coverage.
“Plans with cheaper premiums tend to have higher deductibles and co-pays, which means if you get sick and need care, you might end up spending more out of pocket for doctor and hospital bills than you saved on your monthly premium,” Pollitz said. “So look at both the cost of coverage and the content.”
Without appropriate health literacy, Americans may find it more difficult to navigate the health care system, including choosing a health plan or filling out complex forms, said Kinte Ibbott, vice president of health communications at Maximus Center for Health Literacy.
5. Don’t forget about providers and drugs
Make sure any doctors and specialists key to you are in a plan’s network, that there are enough providers near your home or work and that your prescribed drugs are covered.
Pollitz advises people look at health plan formularies, or the list of prescription drugs a plan will cover. This year the federal marketplace will have a tool to help you search plans that cover drugs you take regularly. In addition to online tools, all plan “Summary of Benefits and Coverage” (including for plans your employer may offer) must include a link to their provider network directory and their drug formulary, Pollitz said.
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