The Affordable Care Act (ACA) is arguably the most critical healthcare legislation in the U.S. since the introduction of Medicare and Medicaid. The ACA aims to make affordable health insurance available to more Americans. According to the U.S. Department of Health and Human Services, enrollment has increased year-over-year, with 1.8 million more individuals signing up for coverage during the 2023 open enrollment compared to 2022. The ACA had 35 million people enrolled in coverage related to the ACA in 2022. Here’s what you need to know about the ACA:

Take advantage of open enrollment periods

The open enrollment period starts on November 1st and ends on January 15th in most states. However, different states may have different ending dates. An open enrollment period is when you can begin, end, or change your health insurance plan.

A simple way to shop for plans online is by exploring the federal marketplace or state exchanges through Healthcare.gov. Remember that the only way to get a plan outside of open enrollment is to qualify due to a life change:

• Losing healthcare coverage
• Moving
• Having a baby or adopting a child
• Getting married

Understanding ACA essential services

Under the ACA, insurance plans must provide ten essential services. These include preventive and wellness visits, maternity and newborn care, mental and behavioral health treatment, and services to help those with disabilities, injuries, or chronic conditions. Lab tests, pediatric care, prescription drugs, outpatient care, emergency room services, and hospitalization are included.

Explore federal subsidies

If you don’t qualify for Medicaid, you might be eligible for the ACA’s federal subsidies in 2024, including premium tax credits and cost-sharing reductions. Eligibility for a subsidy is based on income. A household must have an income of at least 100% of the federal poverty level (or above 138% of the federal poverty level in states that have expanded Medicaid).

Typically, there is an income cap of 400% of the poverty level; however, that does not apply from 2021 through 2025. The subsidy eligibility is based on the cost of the benchmark plan (the plan that each state designates as the standard for essential health benefits (EHBs)) based on the person’s income. A subsidy may be available if that cost is more than 8.5% of the person’s income (or a lower percentage for people with lower incomes).

As of 2023, an eligible single person can earn from $14,580 to $58,320 and qualify for the tax credit. A family of four would qualify with income from $30,000 to $120,000. There are other criteria when determining eligibility, and consulting a financial professional can help you learn how to pursue any available federal subsidies.

Be mindful of health insurance scams

Unfortunately, there has been an uptick in deceptive health insurance plans. If you enroll in one, you might pay lower premiums than you would with an ACA plan. But you’ll have very minimal coverage in the event of an emergency or severe illness. To properly vet plans, be sure to start your search on Healthcare.gov instead of a Google search.

Avoid auto-renewal until examining your costs

In most states, the state will automatically renew your health coverage at the next year’s premium rates. By relying on auto-renewal, you may pay more than previously for the same plan. Even if you want to keep your health insurance plan for the next year, it’s worth your time to log into your account and find out what your cost will be.

Consult a financial professional

Together, we can review your financial situation and determine how the ACA applies to your unique situation. Contact us today to get started.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by Fresh Finance.

Sources:

https://www.hhs.gov/about/news/2022/04/29/new-reports-show-record-35-million-people-enrolled-in-coverage-related-to-the-affordable-care-act

Will you receive an ACA premium subsidy? | healthinsurance.org

2024 ObamaCare Eligibility Chart and Subsidy Calculator (obamacarefacts.com)

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