Understanding Health Insurance Marketplace

Understanding the Health Insurance Marketplace

One of the features of the Affordable Care Act (ACA), aka ObamaCare, was the creation of an online marketplace where people shopping for health insurance could compare coverage plans and enroll in a plan.

All Americans can purchase a policy through the Health Insurance Marketplace, also referred to as the Health Insurance Exchange. Where you can access the marketplace will depend on the state you live in. Many marketplace sites are run by their respective states; those without state-run exchanges can use the federal government site at healthcare.gov.

In addition to allowing people to buy coverage, the Health Insurance Marketplace provides information on programs that help people with low to moderate income and resources pay for coverage. This includes ways to save on the monthly premiums and out-of-pocket costs of coverage available through the Marketplace, and information about other programs, including Medicaid and the Children’s Health Insurance Program (CHIP).

Nobody is required to use the Marketplace to buy health insurance. You can still use an employer-sponsored plan or buy a policy from a private provider. However, all Americans are required to have health insurance, per the ACA.

Advantages to using the Marketplace include:

Coverage purchased through the Marketplace cannot be denied to anybody for health reasons.
The only factors that affect premiums are income, age, tobacco use, family size, where you live and the type of plan you buy. Premiums will not be impacted by pre-existing conditions or other health factors, nor will your gender or occupation matter.
Individuals and families earning less than 400 percent of the Federal Poverty Level can get cost assistance through the marketplace.
Small businesses with under 50 full-time equivalent employees can use the Small Business Health Options Program, while those with under 25 FTEs earning an average of under $50,000 can receive tax credits to help pay employee premiums.

Marketplace insurance plans are separated into four levels: Bronze, Silver, Gold and Platinum. These levels are based on the amount of coverage you will pay, and the insurance company will pay.

During designated enrollment periods, individuals, families and small businesses can compare health insurance plans based on costs and benefits, choose a plan and enroll in coverage. Outside of an enrollment period, an individual or family can enroll in coverage under one of the following circumstances:

Change in income
Lost health coverage
You recently became a U.S. citizen
A change in marital status
A new member of the family was added
Moved to another zip code, county or state
You are no longer a dependent

If you enrolled in insurance coverage through the Marketplace, you should report any of these changes in your circumstances as soon as they happen. Visit the Marketplace at HealthCare.gov for more information about reporting changes in circumstances and special enrollment. The site also provides an estimate that changes in circumstances may have upon the amount of a premium tax credit you can claim. This is called the Premium Tax Credit Change Estimator and is located on the Estimator Tools page of the website.

The IRS will send a tax form, Form 1095-A, to people who purchase health insurance through the Marketplace. This form reports the total premiums paid to the insurance company as well as the amount of premiums assistance received. This information is necessary in order to complete tax returns because the amount of premium you pay and any credits you receive will need to be reported on your federal return.


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