ACA Market Place

What is the ACA Market Place

A healthcare marketplace also called an exchange, is a place (website or in person) set up by either;

• The federal government(Federal Marketplace Exchange),
• Individual states(State Marketplace Exchange), or
• Private insurance companies(Private Marketplace Exchange)

Where American consumers can buy private health insurance plans for individuals and families and receive income-based subsidies.

1. Federal Marketplace Exchange

This exchange is run by the federal government and is only available to participant states. Unless a state creates its own exchange it’s the default exchange for American citizens.

It’s accessible online or via a phone call to a government representative. The federal exchange is only accessible to the participating states.

Guidance is only offered by licensed health insurance agents.

2. State Marketplace Exchange

States which are not participating in the federal marketplace exchange must create a state exchange or State Partnership Marketplace for exclusive use by their residents.

3. Private Marketplace Exchange

Private run companies run these exchanges. These Exchanges have licensed insurance agents who offer advice on options and help compare thousands of plans available in both federal and state exchanges.

Marketplaces make it easier to see the plans available in a certain area and make price comparisons before enrolling in a plan.

The biggest and most common exchange is healthcare.gov which is run by the federal government. Healthcare.gov allows Americans in 38 states to enroll in health insurance plans through the federal exchange. The other 13 states have formed their own exchanges which are still accessible through healthcare.gov.

How Does the ACA Market Place Work

• Enroll in a marketplace

This is done by creating a free healthcare.gov account that will be used to shop at marketplace plans online.

Sign-up can also be done by putting a call to an insurance company, their agent, or broker, by going through an enrollment partner website, or by doing a paper application.

• Choose an ACA-compliant Plan in the marketplace

The Health insurance marketplace gives consumers the option to select a variety of private health insurance companies that specialize in different qualified health plans (unfortunately in some states only a single insurer offers medical plans in the marketplace, but with a variety of plan options).

ACA-compliant Plan participating insurers are not allowed to engage in medical underwriting nor discriminate against people with pre-existing conditions.

All plans available in the marketplace do cover all the ACA’s essential health benefits without annual or lifetime benefit caps.

Remember Income-based premium subsidies and cost-sharing reductions can only be accessed through the health insurance marketplace. They do help in keeping premiums and out-of-pocket costs affordable for most middle and lower-income Americans.

• Choose a suitable category in the ACA-compliant Plan chosen

You have a choice of four different categories of insurance plans. All four categories cover the same essential health benefits.

Also, the quality of care, and access to a doctor, will not vary within the plan. The only difference is the costs you will be expected to pay.

The categories are;

• Platinum
• Gold,
• Silver, and
• Bronze

Platinum has the highest premium, but the lowest out-of-pocket costs.  Bronze is the opposite end of Platinum with the lowest premium but with the highest out-of-pocket costs. The Gold and Silver plans fall somewhere in between the Platinum and the bronze.

• Make use of Subsidies

Based on your income and the state you live in, determine whether you qualify for financial assistance, and if eligible for subsidies or other programs like Medicaid.

Make use of subsidies like the premium tax credit for payments. Take note that these subsidies can only be used on plans that are available through a government marketplace. (It’s not a requirement to make the purchase through the government marketplace).

Who Is Eligible For ACA Market Place

Virtually all Americans (especially individuals and families who are currently uninsured or already buying their own health insurance) are eligible to use the health insurance marketplace except;

• Those in Medicare coverage.
• Americans getting coverage from their employer(unless they decline their employer’s coverage and select a plan in the marketplace mostly if eligible for financial assistance mostly in cases where the employers’ coverage is  considered not affordable and/or not providing minimum value)

To be considered eligible to use the Health Insurance Marketplace, the person:

• Must be living in the United States
• A United States of America citizen or national (lawfully present)
• Is not in prison

When Does the ACA Market Place Open

• The Open Enrollment Period

It’s the limited length of time when marketplaces (or exchanges) are open. This is the only period to enroll in health insurance through the marketplace.

The Open Enrollment Period for coverage in most states is November 1 through December 15. During this period, all health insurance marketplaces are open for shopping. Eligible Americans can compare and enroll in a healthcare plan.

Failure to enroll in a health insurance plan at this time may trigger a tax penalty, depending on a person’s state’s requirements.

• A Special Enrollment Period

It’s any period after the open enrollment period when people are given an opportunity to enroll (up to 60 days) due to certain life changes such as moving across states, getting married, or getting a new addition to the family.

What Is the Healthcare Marketplace Tax Credit

This is the tax credit available for use to lower your monthly insurance premiums payments for plans available through the Health Insurance Marketplace

When you apply for coverage, the system determines eligibility for tax credits based on information provided regarding your income and household size in relation to Federal poverty levels (FPLs).

• Income between 100% and 400% FPL

All incomes within this range, within all states, qualify for Premium Tax Credits.

Please note, that Incomes below 150% FPL may qualify for enrollment in or change Marketplace coverage through a Special Enrollment Period.

• Income above 400% FPL

You are at liberty to use all, a portion, or none of your Premium Tax Credit in advance in lowering the monthly premium payable.

• If you had accessed more advance payments of the tax credit than you qualify for as per yearly income, you should repay the difference when you file a federal income tax return.
• If you access less premium tax credit than you actually qualify for, you are allowed to claim a refundable credit when filing your taxes.

You are allowed to buy health insurance from other sources, but access to the Premium Tax Credit is only through the Health Insurance Marketplace.

Lastly, please fill out Form 8962  with your tax return to reconcile the amounts ultimately eligible for versus advance credit payments received through the year.

How Much Is Healthcare through the Marketplace

In 2022, the average individual in the US pays an average of $438 ($452 in 2021) per month for marketplace health insurance. But these costs do vary widely due to many factors.

Why Healthcare Should Be Cheaper

Under the Affordable Care Act of 2013(ACA), people who are not offered “affordable” health insurance through their employer’s plan may qualify for a Premium Tax Credit to help them acquire affordable and high-quality coverage on the marketplaces.

Please beware that employer-based health insurance may be deemed “affordable” even if the coverage caters solely to the employee, at the expense of family members (“family glitch”). This effectively renders the family members ineligible for a premium tax credit.

Bottom Line

• Plans under ACA were meant for people not insured through employer-sponsored plans. The Premium Tax Credit is available for individuals making less than 400% of the official federal poverty level.
• The Premium Tax Credit helps lower-income individuals access health insurance.  Please be careful, it could land you in tax liabilities in the end.
• Remember that electing to have advance sums applied to monthly premiums — has the potential of significantly altering their tax burden especially if your circumstances change for the better during the year. On the flip side, if you saw your income fall — you may be eligible to receive additional credit on your tax return this year.