You Need Health Insurance! It's Open Enrollment Time
It’s that time of year again. Millions of Americans—most of whom work at or own a small business—will be eligible to enroll in or switch health care plans during the 2017 health insurance open enrollment period for the federal health care Marketplace, Healthcare.gov.
In the run-up to the beginning of the open enrollment period, which starts November 1, health care and medical insurance options are front of mind for the entire small business community. For everybody from freelancers and sole proprietors to larger employers like restaurants, it’s important to know the options.
Why healthcare matters
Put simply, a healthy workforce contributes to a healthy economy. A study conducted in 2013 by the Integrated Benefits Institute found that sick days resulted in $227 billion in lost revenue. And, of course, beyond lost dollars is the cost to your and your staff’s well-being.
There are other consequences when people who don’t have access to health insurance get sick. Too often, those without coverage won’t seek medical care early on (or at all) for an illness. This delay can lead to spreading illnesses to colleagues, as well as exacerbated health issues which may end up costing more in both time and money because of delayed treatment. These are a few of the reasons it’s important that individuals have access to health care and the insurance coverage necessary to protect them from consequences of not being able to afford the current high cost of medical care.
The Affordable Care Act
The Affordable Care Act (ACA) was signed into law in 2010 by President Obama (and then upheld by the Supreme Court in 2012). Before the ACA, nearly 42 million Americans, or close to 13 percent of our population, were without health insurance of any kind. Since the ACA was implemented five years ago, this number has dropped to 8.6 percent, the lowest number of uninsured Americans in history.
While there’s still disagreement about the ACA—It goes too far! It doesn’t go far enough!—the fact remains that under the ACA it is a federal law that an American must have insurance or face a fine that is paid as a part of an individual’s federal income tax. For 2016 and 2017, the penalty for not having insurance is either 2.5 percent of an individual’s total household income or a flat fee, depending on income level. (For those who can afford neither insurance nor fee, however, the federal government allows for certain hardship exemptions.)
Regardless of the financial penalty for not acquiring health coverage, medical services and hospital costs remain expensive. It’s important to have the coverage you need to protect yourself against uncertainties—those in your health and in your pocketbook.
One way small businesses are protecting themselves against these uncertainties is by offering their employees health benefits at much lower rates than were previously available. In fact, the health care Marketplace has an entire network dedicated to small business health insurance options. Under the special small business program, Small Business Health Options Program, or SHOP, employers with 50 or fewer employees who want to provide health and dental coverage are able to do so. Options for these employers include:
Offering your employees one plan, or letting them choose from multiple plans
Offering only health coverage, health and dental coverage, or only dental coverage
Choosing how much of your employees’ premiums you pay, and whether or not to offer coverage to their dependents
Deciding how long your employees’ initial enrollment period is, and how long new employees must wait before joining the plan
Regardless of the pathway you choose for health care at your business, it’s important that not only you, but your staff as well, are all covered by a health insurance plan.
Health insurance Open Enrollment for 2017
Healthcare.gov, or the Marketplace, operates as a clearinghouse for the coverage options available in each state. (Policy availability differs from state to state.) Each year, the health care Marketplace has what is called a period of open enrollment, as do most private insurance programs. In other words, you have about a two-month window to either opt-in to a new healthcare plan or make changes to an existing one. For the 2017 year, the deadlines for government-sponsored health insurance Open Enrollment are as follows:
November 1, 2016: Open Enrollment starts—first day you can enroll, re-enroll, or change a 2017 insurance plan through the health insurance Marketplace. Coverage can start as soon as January 1, 2017.
December 15, 2016: Last day to enroll in or change plans for coverage to start January 1, 2017.
January 1, 2017: New year’s coverage begins for those who enrolled or changed plans by December 15.
January 31, 2017: Last day to enroll in or change a 2017 health plan. After this date, you can enroll or change plans only if you qualify for a Special Enrollment Period.
How to enroll at Healthcare.gov
While knowing the key dates and deadlines for health insurance open enrollment is certainly important, for many small business owners and their staff, the bigger question is: How do I enroll?
It may be as simple as leaving your previous year’s plan as-is. For those wanting to change a plan or enroll for the first time, however, things can be a bit more complicated.
The health care Marketplace is really just a clearinghouse for state programs and the network of insurance providers operating in that state. The options for insurance providers are different in every state. So, while there might be a plan with Aetna in New York, that plan might not be available in Utah.
The best place to begin looking for the right provider and plan is on the official government website for the health care Marketplace. Once you’re at Healthcare.gov, you’ll be able to select your state and then explore the options available at your income level.
Even if you’re already covered by your 2016 health care Marketplace selections and looking to either renew or make changes, you’ll still need to confirm your decision by following these directions.
What are my coverage options?
You didn’t get where you are today by jumping blindly into things. It’s always best to know your options before making a decision. Your health and the kind of health coverage you need to maintain it is a subject you’ll want to have researched carefully, so you can make informed decisions.
The biggest decision you’ll like make, besides cost, is going to be around the type of plan you choose: HMO, PPO, EPO, or POS. Everybody loves a good acronym, but it’s important to be clear about what each of these actually means:
According to the great glossary of all health-insurance related terms provided by Healthcare.gov:
Health Maintenance Organization (HMO)
A type of health insurance plan that usually limits coverage to care from doctors who work for or contract with the HMO. It generally won’t cover out-of-network care except in an emergency. An HMO may require you to live or work in its service area to be eligible for coverage. HMOs often provide integrated care and focus on prevention and wellness.
Preferred Provider Organization (PPO)
A type of health plan that contracts with medical providers, such as hospitals and doctors, to create a network of participating providers. You pay less if you use providers that belong to the plan’s network. You can use doctors, hospitals, and providers outside of the network for an additional cost.
Exclusive Provider Organization (EPO) Plan
A managed care plan where services are covered only if you go to doctors, specialists, or hospitals in the plan’s network (except in an emergency).
Point of Service (POS) Plan
A type of plan in which you pay less if you use doctors, hospitals, and other health care providers that belong to the plan’s network. POS plans also require you to get a referral from your primary care doctor in order to see a specialist.
Knowing the types of plans available is helpful, no doubt, but more important is how they stack up against each other. A clear comparison will help you find the plan that best fits your lifestyle.
Content courtesy of Nerdwallet
Alternatives to Healthcare.gov
Although many Americans are insured through health care plans obtained via the Marketplace or an employer, these plans can come at a cost which, unfortunately, nearly a quarter of Americans can’t afford.
Some of these folks are small business owners. Running a small business is not only hard, it’s also not always profitable. The truth is, most of us go through hard financial times and programs like Medicaid were established to see us through them. No one should have to go without healthcare coverage.
Small business owners can qualify for Medicaid
Many small business owners are unaware that sole proprietors with an adjusted gross income of less than 133 percent of the Federal Poverty Level (FPL)—which, for 2016, is $15,800—may qualify for Medicaid. Medicaid is a low-income health insurance program provided by the federal and state governments that provides coverage for 72.5 million Americans.
This program can be a great option if you recently had, or are having a hard year. For example, a local retailer may earn enough income to cover the operating costs of the business and even make a small profit. But if that profit is less than $15,800 (for a single household), it may not be enough to make ends meet personally, even though his or her business is sustainable.
And, Medicaid isn’t an option just for business owners. Your staff may also qualify for the program if their earnings are below the threshold levels.
There are many health insurance options for small business owners as individuals. The key to finding the right policy is to know your options, know your lifestyle, and know that there are programs and services available to help you if you’re suffering a financial hardship.
If you find yourself confused at any step of choosing an insurance policy, be sure to contact a local health insurance professional. And, of course, you can always ask your business neighbors on Townsquared for recommendations.
Employee benefits expert Gordon Kushnick of Essential Benefits recently partnered with Townsquared to host a workshop on alternative benefit strategies for you and your employees, as well as answer questions about the Affordable Care Act. If you’re looking for an informative three-minute overview of the ACA and how the Healthcare.gov Marketplace works, check out Kushnick’s great explanation—on the Essential Benefits homepage, scroll down to “Who is Essential Benefits?”.