Navigating the Health Insurance Marketplace for 2015

Fraser Trebilcock Employee Benefits Attorney Health Care Law HIPAAIt is never too soon to begin planning for 2015. This is especially true for Michiganders planning to purchase health insurance for 2015 through the federally-facilitated Health Insurance Marketplace (“Marketplace”). Starting on November 15, 2014, individuals and small businesses will have the opportunity to purchase health insurance through the Marketplace. However, the open enrollment period for the Marketplace is only three months this year, half of what it was last year. Open enrollment ends on February 15, 2015. Once open enrollment ends, individuals will only be permitted to purchase a Marketplace insurance plan if they qualify for a Special Enrollment Period due to a qualifying life event.

New to the Marketplace

If you are shopping for health insurance on the Marketplace for the first time, there are some key things that you should consider. First, in order to have health insurance coverage in place for January 1, 2015, you will need to enroll in a health plan by December 15, 2014. Second, you may be eligible for tax credits and subsidies when purchasing insurance through the Marketplace. Your eligibility for tax credits and subsidies will depend on your household size and income. As such, you should have this information available when purchasing a plan through the Marketplace. Third, if you elect not to purchase health insurance for 2015, whether through the Marketplace, from an independent insurance agent or through an insurance carrier directly, you will be required to pay a penalty. For 2015, the penalty for not having minimal essential coverage is $325 per adult and $162.50 per child (up to $975 for a family) or 2% of family income, whichever is greater. These penalties will increase for 2016.

Individuals who are shopping for insurance on the Marketplace for the first time should explore the options that are available. All plans sold through the Marketplace will provide coverage for a number of important essential health benefits. Some plans may offer more coverage. Health plans will be categorized by “metal levels”. The metal levels represent the percentage of the total average costs that the insurance plan will pay for the plan’s covered benefits. For example, a bronze insurance plan will provide coverage for 58% to 62% of the costs associated with plan’s covered benefits. A platinum plan will provide coverage for 88% to 92% of applicable costs. If you have questions about what coverage is best for your family, there are a number of resources available to you, including independent insurance agents/brokers and federal navigators.

Currently Enrolled in Marketplace Insurance

If you currently have a Marketplace insurance plan, coverage is scheduled to end on December 31, 2014. However, you may be automatically enrolled for 2015 with coverage beginning on January 1, 2015. You should receive two notices related to your 2015 health insurance coverage, one from your insurance carrier and one from the Marketplace. These notices will explain your enrollment options. There are a few important things to keep in mind.

First, while you may be eligible for automatic enrollment for 2015, the enrollment may be in a different health plan. If your insurance carrier no longer offers the plan that you were previously enrolled in, the carrier is permitted to enroll you in a similar plan. As such, you may want to carefully examine your coverage and evaluate any changes. Second, if you are going to be automatically enrolled, you are still required to report changes in the information you provided on your 2014 Marketplace application. These changes must be reported directly to the Marketplace so that the Marketplace can reevaluate your eligibility for tax credits and/or subsidies. The ideal time to report any changes is at the begging of the open enrollment period. Third, if you receive notice that you will not be automatically enrolled for 2015, the notice should explain your coverage options, deadlines and the next steps that you should take. Regardless of whether you are going to be automatically enrolled in coverage for 2015, you should take the opportunity during open enrollment to explore your coverage options. It is possible that new plans may be offered or that existing plans may have been modified for 2015. As such, there may be a coverage option that better suits your family’s evolving health care needs.

Small Business Health Insurance

If your business has fewer than 50 full-time equivalent employees, you are not required to offer health insurance to your employees. However, many small businesses offer coverage to their employees in order to attract and retain the best human capital, remain competitive with other employers and achieve tax savings. If you are interested in exploring insurance options for your small business, you may want to evaluate the plans offered through the Small Business Health Option Program (“SHOP”). Starting on November 15, 2014, small businesses will be able to apply, compare plans and enroll in a SHOP plan online. However, unlike the individual insurance market, there is no cutoff deadline for small employers to purchase plans through the SHOP; SHOP plans can be purchased at any time.

One of the most compelling reasons for a small business to consider purchasing a SHOP plan is the possibility of receiving a Small Business Health Care Tax Credit. This tax credit has been around since 2010. However, starting in 2014, the credit is only available for plans purchased through the SHOP. If an employer meets the applicable requirements, the tax credit could be worth up to 50% of the employer’s contribution to its employees’ health insurance premiums. According to the United States Department of Health and Human Services, the Small Business Health Care Tax Credit has provided more than $1 Billion in tax credits to small employers since 2010. If you are a small business contemplating offering coverage to your employees, you should explore whether your business is eligible for the tax credit and whether the credit fits within your company’s overall tax strategy.

To find out more about the impact that the Affordable Care Act has on health care and your business, contact Health Care Department Chair Jonathan Raven at or 517.377.0816, or our Employee Benefits Department Co-Chair Elizabeth H. Latchana at or 517.377.0826.