5 Steps for Enrolling in Obamacare and Avoiding the $695 Penalty


Okay, okay, so we convinced you of why you should enroll in Obamacare. But like many aspects of personal finance, recognizing its importance is one thing – feeling confident about carrying through is another.

So let’s walk through the process of how to enroll in Obamacare step by step, shall we?

Step 1: Know the open enrollment deadlines

Open enrollment for health insurance typically falls near the end of the calendar year for coverage beginning January 1 of the next year.

At this point, the open enrollment deadline for 2016 coverage for the full year has passed. However, as the Affordable Care Act is being phased in, there are additional, later deadlines enabling you to obtain coverage for the majority of the year.

Enrolling by the final, January 31 deadline will give you coverage that begins on March 1, which will help you avoid paying the Obamacare penalty when you file your taxes. If you don’t obtain coverage by the deadline, then you’ll be shut out of the market until the next open enrollment at the end of the calendar year, unless you experience what is known as a qualifying event.

Qualifying events include loss of other coverage (usually due to a change in employment status), marriage, or birth/adoption of a child.

Step 2: Know whether you’ll be obtaining coverage from an employer or on the exchange

If your employer offers health insurance coverage as an employment benefit, things are likely simpler – and less expensive, since employers usually subsidize the cost of coverage for eligible employees.

Should this be your situation, human resources will provide you with information on the provided plans, as well as notify you of the company’s deadline for signing up for coverage (almost always, these dates will fall earlier than exchange deadlines do).

On the other hand, if you’re working part-time, unemployed, or are an independent contractor (such as a freelancer who works from home), you may not have access to or be eligible for employer-sponsored health insurance enrollment. In that case, you will be purchasing coverage via the exchange for Obamacare open enrollment 2016.

To look at plans on the exchange, you’ll go to HealthCare.gov, which will provide you with a list of plans you’re eligible for after you input information about your state of residence, income, and family size, among other details.

Step 3: Weigh your options according to cost and coverage needs

Much as you’d expect, the rule of thumb for health insurance coverage is that the more you pay in premiums, the less you’ll probably pay in copays, coinsurance, deductibles, and other out-of-pocket expenses.

However, a rule of thumb is NOT a guarantee, so read the fine print for all the plans you’re considering very carefully.

For example, if you’re young, single, relatively healthy, and don’t have or expect to have children in the near future, you may select a high-deductible health plan (HDHP). While these plans have greater out-of-pocket costs than plans with higher monthly premiums, should you end up seeking care, they’ll provide savings compared to being in the same situation while uninsured. And if (as you hope) you don’t need care at all, you’ll pay only the lower premiums.

However, let’s say you have ongoing health issues, require specialist visits, and/or have children (or plan to have them soon). In that case, it may be worth it to choose a plan where you pay a higher monthly premium, but have to pay less out of pocket for (inevitable) medical expenses.

The more accurately you’re able to predict your medical needs, what doctors you need to be considered in-network, etc., the easier it will be to determine which plan will be the best fit for you and your family.

Step 4: Ask for help if you need it

The legalese associated with plan information can be both confusing and overwhelming. Fortunately, there’s assistance available to help you understand your options and pick the plan most closely aligned with your needs.

If you will be signing up for an employer-sponsored plan, someone from Human Resources should be able to walk you through a detailed comparison of the available health insurance enrollment options

If you’ll be participating in Obamacare enrollment 2016 on the exchange, you can call the toll-free number listed on the HealthCare.gov website or click on the “find local help” link to access qualified help. Many times, you will even be able to meet in person with someone who can help you apply online, pick a plan, and enroll.

These services are available at no cost to you, but be aware that the longer you wait, the busier those folks are likely to be. If you wait too long, you may not be able to get assistance by the enrollment deadline, so don’t procrastinate if you have questions.

Step 5: Keep track of what works and what doesn’t

As the year goes on, make note of any changes to your healthcare needs. Additionally, if you find yourself paying more than expected for services, jot down the service, provider, and cost. That way, when open enrollment for health insurance for 2017 rolls around, you’ll have a better idea of what questions to ask, increasing the likelihood of finding a plan that is a good fit for you.

And there you have it: how to enroll in Obamacare in a nutshell!

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