Another Affordable Care Act Gotcha

If you bought a personal/family health insurance policy this year, do you understand it will expire on December 31st? No? Well, it does.

Some history…prior to January 1, 2014, personal/family health insurance policies, unlike employer-sponsored group health insurance plans, were by contract “guaranteed renewable” on their policy anniversary dates from year to year.* Each year the issuing insurance company would recalculate a policy’s premium taking into account the beneficiaries’ increased ages, overall current and expected claims from that block of policies and other data, then provide the policy owner the opportunity to renew his/her insurance, without change, in exchange for paying the resulting renewal premium. Typically, that would occur on each policy anniversary date until the policy owner entered Medicare. That was the case regardless of any changes to beneficiaries’health. Individuals could not be singled out for premium increases because of claims paid on their behalf. Policy owners were free to accept the insurance company’s renewal premium offer, or reject it and seek coverage elsewhere.

Prior to passage of the Affordable Care Act (ACA), qualifying to purchase personal/family health insurance was an issue for those with significant health conditions or for those working in very hazardous occupations. Most states supported safety-net programs to provide healthcare assistance or to provide the needed insurance to those who qualified for help.

Fast forward to 2014. Personal/family health insurance is now “Guaranteed Issue”…no more concern about health histories or hazardous occupations. But no longer is such insurance “Guaranteed Renewable”. Instead, your insurance company can change the benefits structure of your insurance each January 1st, as long as those changes fulfill the strictures of ACA…and expect continued premium increases. If you bought an ACA qualified health insurance policy in 2014, look for a letter from your insurance company before year-end offering to keep you insured, but with changes to your present policy and changes to your premiums effective January 1, 2015…just the tip of the ACA iceburg.

Open Enrollment Period for 2015 ACA insurance plans begins November 15, 2014, ending on February 15, 2015. Work with a qualified agenty or broker, or take your chances with healthcare.gov. If you anticipate collecting a premium tax credit you must go through healthcare.gov, but working with a qualified agent or broker at your side will be to your benefit. Your premiums will be same whether or not you work with and agent or broker.

*In the distant past so-call Industrial Insurance Companies offered accident and health insurance policies which could be cancelled by the insurance company on short notice for any reason, but as the health insurance industry developed in the last century competition from more attractive health insurance products pushed industrial insurance out of the marketplace.

Carpe Diem