Do You Need to Enroll in the Affordable Care Act Marketplace?

By Lisa Yagoda, Nicole Duritz, Joan Friedman

Copyright © 2014 AARP. All rights reserved.

The Health Insurance Marketplace, established under the Affordable Care Act (ACA), is a new way for individuals and small businesses to compare insurance plan options available in their state and buy insurance.

How can you determine whether you should enroll through the Marketplace? Here are answers to some common questions:

  • Will I have to buy my health insurance through my state’s Health Insurance Marketplace?

    If you already have health coverage that meets a minimum standard, you don’t have to enroll in a Marketplace plan. You don’t need to use the Marketplace if you’re among the vast majority of Americans who get their insurance through an employer or through Medicare, Medicaid, TRICARE (which offers insurance to active members of the military), the Veterans Administration, or another government program.

    If you get employer early retiree health benefits, you’re already covered as well and don’t need to shop on the Marketplace (although if you do, you may qualify for financial help).

  • Who will use the Marketplace?

    You’ll likely use the Health Insurance Marketplace if you’re uninsured or need to buy coverage on your own because you don’t have access to health insurance through an employer or other source such as Medicare or Medicaid. Members of Congress and their staffs also will buy their health insurance through the site.

  • Can anyone else shop on the Marketplace if they want to?

    Yes. If you now buy your own insurance on your own, you can use the Marketplace.

    You may also use the Marketplace if you can’t afford the lowest-cost plan that your employer offers. Your employer’s plan is considered affordable under the ACA if your premium for an individual policy (as opposed to a family policy) for the lowest cost plan your employer offers amounts to less than 9.5 percent of your annual household income.

  • If I’m uninsured, can’t I shop for a plan somewhere else?

    Yes. Nobody is forced to use the Marketplace to buy health insurance. Individuals can still deal directly with insurance companies or brokers, if they choose.

  • How much financial assistance can I get to help pay for insurance?

    When you apply for health insurance through the Marketplace, you find out whether you qualify for help with your monthly premiums, out-of-pocket expenses, or both. The answers depend on your household size, annual household income, and whether you’re eligible for other coverage.

    For example, in 2014, individuals with income up to $45,960 and couples with income up to $62,040 may qualify for financial assistance. People who qualify can have the new tax credits sent directly to the insurance company.

  • If I work for a small business that doesn’t offer its employees health insurance, do the owners have to do so now? Or do I need to use the Marketplace to find a plan?

    Small businesses — ones with fewer than 50 full-time-equivalent workers — don’t have to offer insurance. They’ve never been required to do so, and the ACA doesn’t change that requirement. If your employer doesn’t offer insurance, you can shop for an individual policy on the Marketplace, where you may qualify for help in paying your premiums.

  • I have cancer, and my wife has diabetes and high blood pressure. Can we get insurance through the Marketplace?

    Yes. Even if you’ve been turned down before, you can use the Marketplace to buy coverage. Nearly half of Americans aged 55 to 64 have a preexisting condition that in the past could lead to denial of coverage. As of 2014, insurance companies are prohibited from denying coverage solely because of preexisting conditions.

  • I lost my job and now work part-time. My employer doesn’t offer insurance for part-timers. Can I use the Marketplace?

    Yes, and depending on your income you may qualify for financial aid if you buy health insurance through the Marketplace. For example, a single, 61-year-old nonsmoker making $35,000 is eligible for a subsidy on the Marketplace and would pay about $277 a month in premiums for the midlevel silver plan.

  • My employer offers insurance, but I can’t afford to pay for my husband’s coverage. Can I use the Marketplace?

    Financial assistance depends on whether the government considers your employer’s plan affordable. To qualify, your employer’s lowest-cost plan must require you to pay more than 9.5 percent of your total household income for your own coverage, not family coverage.

    You can also use the Marketplace and possibly get financial assistance if your employer’s plan doesn’t meet certain minimum standards and doesn’t pay at least 60 percent of your expected healthcare costs.

  • Compared with what I’ve paid in the past for individual coverage, will I pay more or less for insurance when I buy through my state’s Marketplace?

    It depends. You have to do your own research (starting with checking your options on the Marketplace) to find out for certain. Plan prices can vary widely from state to state, and Marketplace options will change over time, as well.

    Keep in mind that insurers are permitted to charge higher rates for older people — though less than what many companies charged older people before the ACA — and may charge smokers a 50 percent premium surcharge.

  • What happens if I don’t buy any kind of health insurance and remain uninsured?

    You may have to pay a tax penalty on your federal income tax. The ACA gives religious groups opposed to accepting insurance benefits, Indian tribes, and people whose household income is below the threshold for filing a tax return, among others, an exemption from penalties.

    The phased-in penalty for not having insurance in tax year 2014 is $95 per adult or 1 percent of income, whichever is more, and for a family, the higher of $285 or 1 percent of family income.