Monday Mondays: Obamacare Deadline Approaching

Mellody is President of Ariel investments, a Chicago-based money management firm that serves individual investors and retirement plans through its no-load mutual funds and separate accounts.  Additionally, she is a regular financial contributor and analyst for CBS News.

Tom: Good morning, Mellody!  

Mellody:  Good morning, Tom!

TOM: Today you have a reminder for us about the Affordable Care Act?

Mellody: I do! The Affordable Care Act’s open enrollment period ending in just under two weeks – February 15 to be exact. As you know, this is the second open enrollment under the act, with enrollment having been open since mid-November. By the end of the open enrollment last year, over 15 million Americans who didn’t have health insurance before the law came into force were able to get insurance! Overall the uninsured rate dropped from 18% to under 14%.

That is a big improvement, but it means there are still more than 30 million Americans that are not covered! So today i want to talk about the enrollment process and remind people to sign up if they haven’t already, not only because your health is so important, but also because it is very much tied to your finances.

Tom: You said we have until February 15. What do we do to sign up?

Mellody: That’s correct, enrollment does concludes February 15, 2015. To sign up for insurance, go to healthcare.gov or locate your state’s health insurance marketplace. There are a number of sites where you can find your state’s marketplace if you live in a state that has set up its own exchange.

Once there, you enter basic information, compare coverage, find a plan you like, and then enroll. All of the sites have information and contacts for assistance in the event that you have questions about subsidies, fees, or exemptions. If you don’t sign up by February 15, you generally can’t buy health coverage through the marketplace until the next open enrollment period begins in November.

One thing to keep in mind: if you signed up for coverage for 2014, your coverage should have automatically reenrolled you through passive enrollment. However, please take the time to make sure, while the enrollment period is still open. Again, the open enrollment runs until February 15!

Tom: How many people have signed up thus far?

Mellody: So far, we know that 7.1 million (as of Jan 16, 2015) have enrolled in a plan on the federal marketplace healthcare.gov. That includes about 4.5 million auto-renews and renewals, plus new enrollments. The above is only in respect to federal marketplace enrollments, so it doesn’t count the estimated at 2.4 million people who had signed up in the 14 states that have their own marketplace.

Add to that the fact that the large employer mandate kicks in this year – meaning companies with 100 or more employees – have to provide coverage to 70% of their full time workers this year, and 95% next year or pay a fee. Taken together, we could see another big drop in the uninsured rate this year.

Mellody: First of all, the websites and portals for the healthcare marketplaces are much smoother, both in the case of the federal site and in the case of most of the state websites. This has been very helpful in encouraging people to sign up. Also, there is a significant change this year for employees of small businesses, or owners of small businesses.

This coverage year saw the introduction of the small business health options program, which opened in November in conjunction with the small business tax credits. This means that small businesses with fewer than 50 employees will get tax incentives to cover their workers, which will hopefully expand the number of Americans with access to employer coverage. Again, between this and the mandate for larger businesses, healthcare options for workers continue to improve.

Tom: Anything to keep in mind when we are signing up?

Mellody: Absolutely. When you are looking for coverage, take your time to know your options and understand the costs associated with them. For example, there might be new plans that offer better coverage, or ones that are more affordable. The monthly premium is important, but you really want to check out a policy’s out-of-pocket costs – including copays, co-insurance and deductibles. Secondly, check to see if you qualify for subsidies.

If you go to your exchange site, you can enter your income information to see if you are eligible to receive a tax credit toward the cost of your health insurance. Even if you received support last year, you need to enter your current information to make sure you get the correct amount next year. This is important because if you get too much of a subsidy, you’ll have to repay it when you file your taxes the following year.

Finally, you have to remember that this year when you file your 2014 taxes, if you went for 3 months without healthcare coverage, you are going to have to pay a fee. The payment for 2014 is $95 per adult and $47.50 per child (up to $285 for a family); or 1% of your household income above the tax return filing threshold for your filing status, whichever is greater. This is an annual fee, so they will charge you 1/12 of that number depending on how long you went without coverage.

For 2015, that number jumps to $325 per adult and $162.50 per child (up to $975 for a family); or 2% of your household income, whichever is greater. Finally, if you do not pay, the IRS will withhold money from your tax refund.

Tom: This is a lot of information. What if we need assistance?

Mellody: Great question! Thankfully, they have this covered too! If you need help, you can work with a local insurance agent or broker, you can go to localhelp.healthcare.gov, or you can call the federal consumer assistance center at 800-318-2596.

Tom: Fantastic! Thanks, Mellody!

Mellody: Have a great day, Tom!

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