Nothing says #adulting quite like having to deal with health insurance. Picking a plan, signing up, paying premiums – ugh.
While in the past it has been tempting to just skip the whole process, as the Affordable Care Act is phased in, the reasons to take the plunge now outweigh the reasons not to.
Here’s what you need to know about the Obamacare penalty and Obamacare deadline for 2016.
1. You need health insurance to avoid the “Obamacare tax”
One of the key features of the law is that individuals must have health insurance coverage or pay a tax penalty. In 2015, that penalty was $325 or 2 percent of household income, whichever was greater.
However, in 2016, that amount will rise to $695 per adult or 2.5 percent of household income – again, whichever is greater. Going without coverage for three months or more throughout the year may mean incurring the penalty when you file taxes for 2016.
While the deadline to obtain coverage for the full year has obviously passed, there’s still an opportunity to gain insurance coverage for the majority of the year and avoid the health insurance penalty. Those who enroll by January 15 should be able to elect coverage that begins on February 1, and those who sign up for open enrollment by the final January 31 deadline can gain coverage by March 1.
2. There will be no special enrollment in 2016
Last year, the administration opened a special enrollment around the federal income tax deadline in mid-April for those who had neglected to buy insurance so they could avoid the Obamacare tax. However, last month, the CEO of HealthCare.gov confirmed it was a one-time deal and there will be no special enrollment period this year.
This means those who miss the health insurance deadline in 2016 will have to pay the penalty when the 2016 tax season rolls around, unless they qualify for an exemption.
It also means those individuals who do not experience a qualifying event, such as a change in employment, marital status, or the birth of a child will have to wait until the 2017 open enrollment period opens in the fall of 2016 before they will have another opportunity to buy health insurance.
3. Health insurance may not be as expensive as you think
Many young adults have only had experience with health insurance through being covered on their parents’ plans, buying student health insurance while in college, or having access to employer-sponsored plans. For this reason, they might experience sticker shock when they start looking at plans in the state or federal marketplace.
Fortunately, financial assistance is available for many to help offset the cost of healthcare. Especially with the 2016 Obamacare penalty increase, getting coverage on the exchange may actually be cheaper than the cost of going without.
Why spend more money only to spend your time avoiding necessary care, or worrying that you’ll get sick or have an accident? With peace of mind being more affordable than the health insurance penalty, there’s just another check mark in the “why you need to enroll in Obamacare” column.
4. Health insurance is preparation for the unexpected
Even if you’ve done the financially responsible thing and paid off high-interest debt and saved an emergency fund, it’s unlikely that you’ve saved enough to weather a major medical emergency without going into debt.
Unpaid medical bills can negatively impact your credit score and make other adult milestones, like having children or buying a house, more challenging to reach – especially if you are also dealing with student loan debt.
If you’re relatively young, healthy, and not planning on expanding your family in the near future, a high-deductible health plan may be a good fit for your needs. While you might end up having to pay quite a bit out of pocket if major medical expenses do occur, you’d almost certainly pay less in such a circumstance than you would if you didn’t have insurance at all.
Such plans aren’t a good fit for everyone, but many recent college graduates are in the demographic best suited for them. And in the meantime, your premiums might be less than the Obamacare penalty. Win-win!
5. Health insurance is in your own best interest
Much like car owners need insurance on their vehicles in case of an accident, people need insurance on their health in case of accident or illness. The only difference is that while not everyone has a car, everyone has a body and mind that needs safeguarding.
Insurance protects not only society at large from rising healthcare costs, but it also prevents individuals from having to make the decision to postpone or fail to seek needed health care because of its cost. To recap:
- The penalty for failing to obtain health insurance is rising in 2016.
- In fact, the cost of some plans may be less than the penalty in many markets.
- Health insurance may help protect you from financial ruin in the event of unforeseen medical expenses.
- There will be no additional special enrollment opportunities during tax season – if you don’t enroll by the 2016 health insurance deadline, you may not have another chance until 2017 open enrollment begins.
If you don’t already have health insurance in place for 2016, don’t let the Obamacare deadline pass you by. Protect your health and finances, obey the law, and gain some skills in basic #adulting all in one go!
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