Health Insurance 101
Health insurance in the United States has evolved over the last 150+ years. Sickness funds during the Civil War era were an early form of health insurance. Workers contributed about one percent of their wages to an employer, union, or fraternal organization. If a worker became too ill or injured to work, he could expect a benefit of about 60 percent of his wages in cash. Workers compensation came into being in the early 1900s, placing full liability on employers for workplace injuries and spawning workers compensation insurance and contributing to the future of health insurance.
After the Great Depression, hospitals began creating their own plans as a means of attracting patients. One of the first, the Baylor University Hospital Plan, targeted public-school teachers in the Dallas area and offered 21 days of hospital care at Baylor University Hospital only in exchange for 50 cents per month. Other hospitals came up with similar plans. Prepaid group practice plans also started to appear, including the Kaiser Foundation Health Plan in 1933. Since health insurance was not considered a wage, employers were able to leverage it as a recruitment tool.
Today, Americans are required to have health insurance or potentially pay a tax penalty. Starting January 1, 2019, the requirement is still in place, but the tax penalty has been reduced to zero. While the ACA did away with the pre-existing conditions, which often made access to health insurance nearly impossible for some people, and introduced tax credits to help make insurance premiums affordable, paying for health insurance remains challenging for a lot of people—especially those who are not covered by an employer-sponsored health plan such as the self-employed. Having an employer-sponsored health plan is still the best option for working Americans.
In order to qualify for tax credits under the ACA, you must choose an insurance plan offered on your state’s health care exchange. Depending on where you live, you may have limited plan choices. The most affordable plans offer the least amount of coverage, have large deductibles, and still come with uncomfortable monthly premiums which may or may not be offset by tax credits depending on your income.
For the self-employed making an average to above average income, buying health insurance for their families has become a huge financial burden.
Here at Dave Knows Health, we understand! We’re in a similar boat as independent contractors. Many of us have been exactly where you are today, wondering how to afford health insurance. Come talk to us and you’ll soon see why we’re the ones who can help you. We make it a very simple and painless process. If you don’t have health insurance because you believe it’s unaffordable or you think you’re overpaying for health insurance, we can help turn that around for you while providing innovative, cost-effective health coverage solutions that are available to you today.
Open Enrollment Period
The yearly period when people can enroll in a health insurance plan. Open enrollment for ACA-compliant coverage will run from November 1st to December 15th in all states that use HealthCare.gov and in some of the states that run their own exchanges. This enrollment schedule applies both on and off-exchange.
Special Enrollment Period (SEP)
A time outside the yearly Open Enrollment Period when you can sign up for health insurance. You qualify for a Special Enrollment Period if you’ve had certain life events, including losing health coverage, moving, getting married, having a baby, or adopting a child.
A change in your situation —like getting married, having a baby, or losing health coverage— that can make you eligible for a Special Enrollment Period, allowing you to enroll in health insurance outside the yearly Open Enrollment Period. There are 4 basic types of qualifying life events.
Life changes that can qualify you for a Special Enrollment Period
Changes in household
You may qualify for a Special Enrollment Period if you or anyone in your household in the past 60 days:
- Got married. Pick a plan by the last day of the month and your coverage can start the first day of the next month.
- Had a baby, adopted a child, or placed a child for foster care. Your coverage can start the day of the event—even if you enroll in the plan up to 60 days after.
- Got divorced or legally separated and lost health insurance. Note: Divorce or legal separation without losing coverage doesn’t qualify you for a Special Enrollment Period.
- Died. You’ll be eligible for a Special Enrollment Period if someone on your Marketplace plan dies and, as a result, you’re no longer eligible for your current health plan.
Changes in residence
Household moves that qualify you for a Special Enrollment Period:
- Moving to a new home in a new ZIP code or county
- Moving to the U.S. from a foreign country or United States territory
- If you’re a student, moving to or from the place you attend school
- If you’re a seasonal worker, moving to or from the place you both live and work
- Moving to or from a shelter or other transitional housing
Note: Moving only for medical treatment or staying somewhere for vacation doesn’t qualify you for a Special Enrollment Period.
Important: You must confirm you had qualifying health coverage for one or more days during the 60 days before your move. You don’t need to provide confirmation if you’re moving from a foreign country or U.S. territory.
Loss of health insurance
You may qualify for a Special Enrollment Period if you or anyone in your household lost qualifying health coverage in the past 60 days OR expects to lose coverage in the next 60 days.
Marketplace insurance plans with premium tax credits are sometimes known as subsidized coverage. It’s health coverage available at reduced or no cost for people with incomes below certain levels. Examples of subsidized coverage include Medicaid and the Children’s Health Insurance Program (CHIP).
COBRA (Consolidated Omnibus Budget Reconciliation Act) is a federal law that allows you to temporarily keep health coverage if your employment ends, you lose coverage as a dependent of the covered employee, or another qualifying event. When you choose COBRA coverage, you pay 100% of the premiums —including the share the employer used to pay— plus a small administrative fee.
The Children’s Health Insurance Program (CHIP)
If your children need health coverage, they may be eligible for CHIP, a low-cost health coverage program for children in families that earn too much money to qualify for Medicaid. In some states, CHIP covers pregnant women. CHIP coverage is available in every state, which works closely with its own Medicaid program.
Each state program has its own rules about who qualifies for CHIP. You can apply right now, any time of year, and find out if you qualify. If you apply for Medicaid coverage to your state agency, you’ll also find out if your children qualify for CHIP. If they qualify, you won’t have to buy an insurance plan to cover them.
2 ways to apply for CHIP:
- Call 1-800-318-2596 (TTY: 1-855-889-4325).
Fill out an application through the Health Insurance Marketplace. If it looks like anyone in your household qualifies for Medicaid or CHIP, we’ll send your information to your state agency. They’ll contact you about enrollment. When you submit your Marketplace application, you’ll also find out if you qualify for an individual insurance plan with savings based on your income instead. https://www.healthcare.gov/medicaid-chip/childrens-health-insurance-program/
- Apply any time
- You can apply for and enroll in Medicaid or CHIP any time of the year. There’s no limited enrollment period for either Medicaid or CHIP. If you qualify, your coverage can start immediately.