Health Care Exchanges Are Coming!

Health care exchanges, also known as marketplaces are due to become operational in each state on Jan. 1st 2014. Open enrollment for the exchanges is set to begin Oct. 1st 2014. Anticipation has been building towards these events ever since the health care bill was originally signed into law. There has always been opposition to the law for various reasons. And there are still those who doubt the readiness or the ability of the exchanges to meet this timetable. They point to delays and changes in the law as evidence of this. However, the reality as we know it today is that these milestones will be met.

For now there are a number of things that everyone should know about the exchanges.

1. There are three different types of exchanges: state run, federally run and joint exchanges. The assumption is that to the buying public the structure of the exchange should be fairly transparent. In other words, it shouldn’t make any difference. They all are required to be run similarly.

2. Premium subsidies will be available for individuals who purchase coverage through the exchange. The subsidies will be base on income and will be applied to immediately offset the cost of coverage. All recipients of a subsidy will be required to reconcile when they file their tax return. So depending on what their actual income was for the year, they may receive additional subsidy or they may owe an amount if they actually earned more income than estimated.

3. The coverage plans available will be similar to plans you can purchase outside the exchange. All health insurance will be required to have certain mandated coverages after Jan. 1, 2014.

4. If you have health insurance now and like that coverage you will be able to keep what you have, if and only if, your current plan complies with all of the ACA coverage requirements. If it doesn’t you may be required to purchase a new plan with your insurance company that does meet all the new standards. Although the requirement for large employers to have coverage is delayed until 2015, the individual mandate to have coverage effective Jan 1st 2014 has not been delayed. The first year penalty for not doing so is 1% of AGI or $95.00 assessed at tax time. It increases after that.

5. Small employers will be able to purchase group health insurance in an exchange called Small Business Health Options Programs (SHOP).

6. Most underwriting will be eliminated and there will be no waiting periods for pre existing conditions; however, enrollment will only be able to take place during open enrollment and if certain life events cause changes in your status.

7. Brokers and agents will be able to sell insurance policies inside the exchange, but only those who have completed the training and certification to do so.

There are many other details that need to be considered when shopping for health insurance inside or outside the exchanges. It is a very important decision. You need to seek the advice and guidance of a qualified benefit consultant to guide you through the process. At least that much will not change.

This information has been provided by Mark E. VonMoss, Manager Financial Services Div. of The Insurancenter.