To save on medical costs, more and more employers are introducing reimbursement models such as Health Reimbursement Arrangements (HRAs) for their employees' medical benefits. This allows employees to choose their own health insurance plan and get tax-free reimbursement of premiums.
Having the freedom to choose your own insurance policy is great for your health, but buying one on your own can be difficult if you've never purchased one before. There are several ways to purchase individual health insurance, but the most common way is through the health insurance marketplace.
This article will guide you through the five-step process of applying for personal health insurance to help you choose the plan that's right for you and your family.
What is personal health insurance? Personal health insurance, or self-insurance, is health insurance that an individual purchases for themselves and their families. These plans work differently than traditional group health plans, which are selected and sponsored by individual employers.
Individuals often purchase these policies through insurance agents or brokers, which helps them understand and navigate insurance companies, plan options, and premium costs.
Since the ACA was passed, many Americans have used online health insurance marketplaces, including federal and state exchanges, to purchase their own personal health insurance.
With the enactment of the Affordable Care Act (ACA), insurers can no longer deny health insurance to people with pre-existing medical conditions and can offer premium tax credits to beneficiaries based on income limits. Additionally, all healthcare plans purchased on the Marketplace are considered eligible healthcare plans.
Now that we have defined what personal health insurance is, let's discuss the steps to follow when purchasing your own personal insurance.
Step 1: Visit healthcare.gov or your state's individual health insurance marketplace website
After passage of the ACA, online health insurance marketplaces (both federal and state exchanges) were created to allow Americans to enroll in their own personal health insurance.
To start looking for a health insurance plan, you need to check if your state has its own health insurance exchange. You can check state by state guides. If your state does not have its own exchange, you'll use the federal exchange at healthcare.gov
Usually, you'll only be able to sign up for a health plan during the open enrollment period at the end of the year. However, if your current employer just offered you a reimbursement plan, like an HRA, then you qualify for a special enrollment period that allows you to shop for a plan outside the regular enrollment period.
Step 2: Complete the online application.
Whether you're applying for a policy for the first time or renewing your current health insurance plan, the Marketplace website will walk you through several questions via online forms to help determine your age, financial status, and location.
You can expect to provide the following information during the application process:
Date of birth
Social security number
Contact information, such as your mailing address, zip code, email address, and mobile phone number
Tax filing status*
Number of dependents*
Current job and household income information*
You must also provide the social security number of anyone helping you pay for the policy to determine household income eligibility, even if they aren't directly applying for the health coverage.
Other income information such as pensions, rental income, received alimony, unemployment benefits, disability benefits, etc. Possibly current insurance data.
How are you insured (employer, Medicaid, individual health insurance, etc.)
Payment information, such as a credit card or bank draft (ACH) information
You will not be asked about your medical history other than tobacco use. As mentioned above, the ACA has determined that you will not be billed based on your health condition, so you do not need to keep your medical records.
Overall, it takes him 15-30 minutes to fill out the form. You will receive an email update once your application has been processed.
Step 3: Choose plan
After completing the application, you can choose a plan. The website displays all available plan options in four metallic levels.
Bronze, Silver, Gold, Platinum. The Bronze plan usually has the lowest monthly cost, but you pay more out of pocket if you have medical insurance. This is a good option if you don't plan to use a lot of medical services, but want insurance in case you are involved in an accident.
Conversely, platinum plans typically have the highest monthly premiums, but the lowest payouts when receiving medical benefits. This is a good option if you have many medical needs or see your doctor frequently.
It's important to note that these metal levels have nothing to do with the quality of care you receive. It's just a matter of how you and your insurance company split the medical costs.
If you're not sure about choosing a plan on your own, healthcare.gov has phone numbers for toll-free expert advice. If your organization uses PeopleKeep to manage his HRA, you can get even more help with Stride Health.
Stride Health is an online tool that allows you to receive personalized health insurance recommendations. Find the cheapest policies in your area, see if you qualify for premium tax deductions, and find affordable health insurance options quickly and easily.
Step 4: Pay the first premium
All health insurance plans are "guaranteed". This means you don't have to wait to see if your plan is accepted as anyone who qualifies will be accepted.
Once you've decided on your plan, you'll need to make your first payment before your coverage officially begins. In most cases, Marketplace will redirect you to the website of the insurance company and enter your credit card information for the first payment. Alternatively, the marketplace charges the premium and forwards the payment to the insurance company.
After purchase, you will receive the insurance card and documents by mail. Your plan stays with you when you retire because it's not tied to employment like group health insurance.
Step 5: Submit rewards and get refunds
This last step is optional, but required if your employer provides her an HRA. If she receives HRA benefits from her employer, she may be eligible for tax-free reimbursement of health insurance premiums and other eligible medical expenses, such as prescription drug costs and certain medical equipment.
All you have to do is provide your employer with documentation showing:
Premium amount
date on cover
insurance provider