Jan. 31, 2016 is the last day of the Open Enrollment Period (OEP), enabling Americans to purchase Affordable Care Act (ACA)-compliant health insurance. As of Jan. 2, 2016, 11.3 million have enrolled in coverage in all 50 states and the District of Columbia. This marks the OEP’s first calculation for nationwide enrollment.
Premiums and penalties
As of Dec. 26, 2016, the Department of Health and Human Services (HHS) reported that almost 4 million key young adults under 35 years old had enrolled; about 770,000 between 18 and 34 years old were new enrollees. Premiums for the “silver” plan, the ACA’s benchmark and the second-cheapest option, will only increase by 7.5 percent in 2016, compared to 2015. And this is before any potential tax credits; on average, policies should cost less than $100 a month.
The increasing tax penalties for going without insurance affect enrollment, as well. These penalties may be avoided if consumers qualify for hardship exemptions. But if found liable, you’ll pay the greater of:
- $695 per adult and $347.50 per child, for a maximum of $2,085 per family; the 2015 penalty was $325 per adult and $162.50 per child
- 2.5 percent of your income above the tax filing threshold; the 2015 penalty was 2 percent
Although ACA enrollment is up, more than 147 million Americans are covered through their employers. The ACA’s employer mandate requires employers with 50 or more full-time employees to provide at least the equivalent of a “bronze” exchange plan (covering 60 percent of expenses), or they face a per-employee fine. The mandate requires employees to work 30 hours or more each week. But while some employers may cut workers’ hours, the improved job market is making them rethink this. Some also offer better insurance options, rather than increase wages.
Employer-based insurance may be affected by the “Cadillac tax.” This is a 40 percent tax on high-value, employer-based health benefits above a certain threshold. Formerly set to begin in 2018, it’s now been pushed back to 2020. If employers try to provide different benefits to save money, workers may begin exploring Obamacare.
Mergers and Medicaid
Among the “Big 5” health insurance companies, Aetna may merge with Humana, while Anthem may merge with Cigna. Meanwhile, the final member of the Big 5, UnitedHealth Group, revealed that they may leave the insurance exchanges in 2017. Experts believe that fewer firms available may mean higher plan premiums.
The issue of expanding Medicaid, the joint federal-state social program for low-income Americans, is also impacting the ACA. Originally, all states were required to expand Medicaid to include childless adults just above the Federal Poverty Line (FPL). But in 2012, the U.S. Supreme Court left the decision up to individual states. In those states that have not expanded, 3.1 million poor uninsured adults will likely remain uninsured. They also can’t enroll in the Marketplace, as they do not earn enough to qualify for tax credits.