It's rough out there for the would-be beneficiaries of Obamacare -- the Affordable Care Act (ACA) is causing a lot of confusion amongst consumers. If you're uninsured or are otherwise considering enrollment in the new marketplace (remember that enrollment is mandatory only if you are not properly insured elsewhere, such as through your employer), here are some common mistakes to avoid in navigating the tricky road to coverage.
1. Missing the deadline
Mark your calendar with a few key dates. By December 23, 2013, you must enroll and pay your first premium if you want coverage that begins on January 1, 2014. You can still enroll fee-free for a few more months after this date, but doing so will result in delayed coverage. After March 31, 2014, open enrollment is over. Only a "qualifying life event" -- having a baby, for example -- will allow you to join the exchange for 2014 after open enrollment closes.
You must also sign up by this date to avoid the tax penalty. Even if you miss the deadline for 2014 and pay the penalty, you may still want to register for the following year. Make sure to keep in mind that open enrollment closes much earlier in coming years: December 7, 2014 is the last day of open enrollment for coverage beginning in 2015. The tax penalty for 2015 will kick in if you don't have coverage before January 1, 2015.
2. Waiting until the last minute
We've all heard about the massive technical issues that have plagued HealthCare.gov and the state exchange websites since their very first day of operation. If you wait until the evening of March 31, when all your fellow procrastinators crowd the exchange, you may run into glitches that prevent you from purchasing the coverage you need on time. If you buy after December 23, you may also be charged the same amount as the early birds for coverage that kicks in weeks later than theirs does.
3. Purchasing a plan before doing your research
Marketplace plans vary widely across many factors, so it is important to pick one that fits your healthcare needs. Different tiers of ACA insurance plans are named after different metal types -- people with a platinum plan, for example, pay higher premiums, but a lower percentage of out-of-pocket costs, such as for copays and prescriptions. People with bronze plans pay lower premiums, but higher out-of-pocket expenses. If you're young and illness-free, a higher-tier plan might not be necessary. However, if you anticipate facing health problems, a gold or platinum plan may be a worthwhile expense.
You should also consider factors like plan type (HMO, PPO, EPO, etc.) and insurance company. Put some time into researching which plan is the best option for your financial and physical health -- and keep in mind that you won't be able to switch plans after open enrollment closes, so it's worth the initial time investment to find the right plan the first time around.
4. Waiting to purchase insurance until you get sick
The open enrollment period means that avoiding premiums until disaster strikes isn't a great strategy -- it's a time-sensitive deal. While it is true that insurance companies can no longer deny customers based on pre-existing conditions, even healthy people will not be able to sign up after the marketplace closes for the year. In addition to any healthcare bills they incur, those who remain uninsured will face a tax penalty.
5. Reporting your income incorrectly
Since insurance plans under the ACA come with income-scaled premium assistance for many people, you'll be asked about your finances when you sign up. It is important to report as accurately as possible because your estimated income will later be checked against your tax return for the year. You'll get an automatic rebate to your premiums, based on your estimated income, but it will be recalculated once you file your taxes. If you lowball your income during sign-up, you might have money withheld from your refund.
