Open Enrollment: What is Different for Year Two?

Open Enrollment is in full swing for individual health insurance coverage under the Affordable Care Act, the second of its kind since the health reform law went into effect. Now in the second year, there are numerous changes and updates consumers should know about Open Enrollment to ensure that they find the right coverage that fits their particular needs.

Tax Penalty Increase
It was reported that in 2014, 66 percent of uninsured Americans were aware of the individual mandate, the requirement that all Americans get coverage or pay a tax penalty. Even with the individual mandate in place, many still chose to go uninsured and pay the tax penalty instead.

In 2014, the tax penalty was $95 for each adult and $47.50 for each child in a household, or 1 percent of income, depending on which was greater. That fine has since increased - and fairly substantially. For those who choose to go uninsured in 2015, the fine they face is $325 for each adult and $162.50 for each child in a household, or 2 percent of income, again, whichever is greater.

For some Americans, the cost of going uninsured could be greater than what it would cost to enroll in health insurance, as government subsidies are available to help keep the cost of insurance down. Additionally, for those who choose to pay the penalty versus enrolling in coverage, they still face the financial risks associated with not having health insurance.

25 Percent More Options
The Affordable Care Act is credited with giving consumers more health insurance options, and for 2015 coverage, there are even more options than before. The number of insurers on the Marketplace has increased 25 percent. According to information released by the Department of Health and Human Services, 77 new health insurance carriers are offering Marketplace coverage, bringing the total number to 248. Consumers who are eligible for government tax subsidies may use them to offset the premium costs of the plans offered through the Marketplace. There are also additional health plan options offered outside the Marketplace that typically match the needs of consumers who are not eligible to receive subsidies or who are only eligible to receive small subsidies.

Projected Rate Increases
For 2015 coverage, plan rates are expected to increase a relatively tame 6 percent overall, but actual rate increases will depend on the consumer's geographic location. If a consumer chooses to auto-reenroll, then the consumer will still be subject to a rate increase for the existing plan. Depending on the increase, auto-reenrolling may prove to be too expensive based on plan rate increases. Therefore, consumers are advised to browse their options in order to determine whether their current plan is still the best option available.

Shorter Enrollment Period
This year, the Open Enrollment Period has been cut from six months to three months. Plans purchased prior to the end of the day on December 15th will have an effective date of January 1st. Plans purchased after December 15th will not offer coverage until February or later. In order to ensure that there are no gaps in coverage, it is recommended that individuals start looking at their options sooner rather than later during the open enrollment process.

More Information, Less Confusion
The first Open Enrollment period was confusing for many people. It was initially plagued by technology glitches, delays, and long waits. By the time the Marketplace technology issues were resolved, there was such a rush to get enrolled that consumers were often making decisions based on incomplete or inaccurate information.

For example, many consumers did not know about the individual mandate or that they could get government financial assistance. Pursuant to a Kaiser Family Foundation study from March, more than 40 percent of the uninsured were unaware that the Affordable Care Act provides financial help to low and moderate-income individuals. The study also showed that only 43 percent of the general public was aware that the Affordable Care Act eliminates out-of-pocket costs for preventive services. Because coverage decisions were often made without all of the available information, many consumers chose plans that did not best match their particular needs.

The technology and delay issues have since been mostly resolved, so it is important that consumers worry less about the ability to enroll and instead take advantage of the time and resources available to them to ensure that they enroll in the best plan based on each consumer's unique circumstances. For consumers with questions, licensed health insurance agents offer consultative services free of charge to the consumers. Additionally, for consumers that waited in long lines or waited on hold for hours, they can avoid those issues this year by utilizing companies, such as GoHealth, that offer identical enrollment services over the phone or on the Internet at no additional cost. In fact, consumers that act early and do not wait until just before the deadlines can oftentimes speak with a licensed GoHealth advisor with little or no hold time.

This Open Enrollment period is sure to be drastically different than the first. Now that the time is here, it is important that all consumers be aware of the improvements, changes, and increased options available to them.