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!
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 5.87% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 5.87% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on ourstudent loan refinance product.
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2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
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