2016 Changes for Individual Health Insurance Marketplace

Below are the 2016 Changes for Individual Health Insurance Marketplace.

2016 Changes for Individual Health Insurance Marketplace: Individual Mandate

The individual mandate asked everyone to either have health insurance or pay a penalty.

In 2015 the fee for uninsured adult is $325 and for uninsured children is $162.50, or 2% – whatever is greater. The most a family would have to pay in 2015 is $975 – three time adult’s penalty. Those amounts go up in 2016.  In 2016 the fee for uninsured adult is $695 and for uninsured children is $347.50, or 2.5% – whatever is greater. The most a family would have to pay in 2016 is $2,085 – three time adult’s penalty.  Remember that someone who pays the fee WILL NOT get any health insurance coverage.

You pay the fee for 2015 when you file your 2015 Federal Income Tax return in 2016; you pay the fee for 2016 when you file your 2016 Federal Income Tax return in 2017.

2016 Changes for Individual Health Insurance Marketplace: Annual Open Enrollment Period

The annual open enrollment period for the year 2016 will begin November 1, 2015 and will run through January 31, 2016. The Marketplace will provide advance written notice to all enrollees during the fall of 2015 to inform them on the upcoming open enrollment period.

Applications completed and received by the Federally-facilitated Marketplace from November 1 to December 15, 2015 can become effective on January 1, 2016. Applications completed and received by the Federally-facilitated Marketplace from December 16, 2015 to January 15, 2016 can become effective on February 1, 2016.  Applications completed and received by the Federally-facilitated Marketplace from January 16 to January 31, 2016 can become effective on March 1, 2016.

During the Open Enrollment period, current enrollees should contact the Marketplace and update their eligibility information to ensure they receive the accurate amount of financial assistance and either select the same Qualified Health Plans (QHPs) (if available) or select a new plan. Enrollees who proactively update their application information will receive an updated eligibility determination. In order for this updated eligibility determination to be sent to the issuer for the enrollee’s selected QHP, the enrollee MUST confirm plan selection in either the same plan or a new plan.

Consumers who DO NOT contact the Marketplace to update their eligibility information and select a plan by the deadline to select coverage effective January 1 of the following year are automatically re-enrolled into coverage for the following year.

2016 Changes for Individual Health Insurance Marketplace: Out-of-pocket Limits

Out-of-pocket limits for most health plans are capped at the health savings accounts (HSA) limit. For the year 2015, the limits are $6,600 for individual and $13,200 for a family.  For 2016, the limits are $6,850 for an individual and $13,700 for families enrolled in individual market plans.

2016 Changes for Individual Health Insurance Marketplace: Premium Tax Credit

Premium Tax Credit is one of two affordable health insurance options provided by the federal government (the other is Cost-Sharing Reductions). It will help low and moderate income families who are not eligible for other programs to reduce the cost of premiums; assuming they are enrolled in one of the metal level QHP.

One of the requirements for the Premium tax Credit is to have an annual household income that is between 100% and 400% of the Federal Poverty Level (FPL).
Annual household income is based on FPL figures for the previous year.

For the year 2016, it will be based on 2015 FPL figures: $24,250-$97,000 for a family of four. Compare it with year 2015, based on 2014 FPL figures: $23,850-$95,400 for a family of four.

2016 Changes for Individual Health Insurance Marketplace: Cost-Sharing Reductions

Cost-Sharing Reductions is one of two affordable health insurance options provided by the federal government (the other is Premium-Tax Credit). This option will help low and moderate income families who are not eligible for other programs to limit out-of-pocket costs, such as deductibles or coinsurance under their QHP coverage.  In order to be eligible for cost-sharing reductions, the following conditions should be met

  • Be eligible to enroll in a Qualified Health Plan (QHP)
  • Meet the criteria for eligibility for a Premium Credit Tax
  • Have an annual household income at or below 250% of the Federal Poverty Level (FPL). For the family of four it corresponds to $60,625 for the year 2016 ($59,625 for the year 2015)
  • Be enrolled in a Silver-level QHP

Below are the Out-of-pocket Maximum and “Increased” Actuarial Value for 2016 for the Silver plan for the individual and family of three depending on the percentage of the FPL.

For any household income equal or above 250%  FPL, the Out-of-Pocket Maximum is the same as Standard Out-of-Pocket Maximum, and Actuarial Value is 70% – the Standard Silver plan AV.

Table 1. Out-of-pocket Maximum and “Increased” Actuarial Value of the Individual (2016)

Percent of Federal Poverty Level (FPL) Household Income Out-of-Pocket Maximum Standard Out-of-Pocket Maximum Actuarial Value (AV) for Silver Plan
400% $47,080 $6,850 $6,850 70%
250% $29,425 $5,200 $6,850 73%
200% $23,540 $2,250 $6,850 87%
150% $17,655 $2,250 $6,850 94%
100% $11,770 $2,250 $6,850 94%

 

 

Table 2. Out-of-pocket Maximum and “Increased” Actuarial Value for Family of three (2016)

Percent of Federal Poverty Level (FPL) Household Income Out-of-Pocket Maximum Standard Out-of-Pocket Maximum Actuarial Value (AV) for Silver Plan
400% $80,360 $13,700 $13,700 70%
250% $50,225 $10,400 $13,700 73%
200% $40,180 $4,500 $13,700 87%
150% $30,135 $4,500 $13,700 94%
100% $20,090 $4,500 $13,700 94%

 

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