Update: The Centers for Medicare & Medicaid Services (CMS) announced a new short-term special enrollment period from March 15 to April 30, 2015, giving people in 37 states more time to sign up for 2015 health insurance coverage through Healthcare.gov. Act soon to secure health care coverage for you and your family, and to avoid a tax penalty for 2015. For more information, click here. Check your state marketplace website for updates regarding state-run exchange special enrollment periods.
While automatically renewing health insurance plans bought in the Health Insurance Marketplace may sound convenient, some policyholders could face unexpected changes to their premium tax credits and pay more for coverage that doesn’t meet their needs.
The open enrollment period to purchase coverage as required by the Affordable Care Act is underway. In many cases, people who do not act to renew their coverage for 2015 will be automatically enrolled in their same 2014 plan, regardless of costs.
Here are five reasons you may want to think twice about automatic renewals – even if you’re happy with your current plan.
You want to maximize your tax credits. You could face a big premium increase if you don’t re-evaluate your options and choose a low-cost plan. That’s because tax credits and cost-sharing subsidies are based on the second least-expensive sliver plan sold in your area. If the price of this benchmark plan changed in 2015, so has the amount of your premium tax credit.
You want the best value for your dollar. The number of plans in the Marketplace has grown, so you may find a better plan at a better price if you take the time to compare policies. Prices vary depending on your income, family size, and geographic area.
Your current plan has changed. Policies change every year even if you opt for auto-renewal, so double-check critical items such as premium costs, health care provider networks, lists of covered prescription drugs, and cost-sharing rules.
Your health status has changed. Take stock of your health care needs to find the plan with the right benefits. Maybe you were recently diagnosed with diabetes, asthma or other chronic condition that requires ongoing medication.
Your income or family size has changed. By reporting changes in income and household size to the Marketplace, you may be eligible for tax credits based on updated federal poverty levels that could translate into more savings.
Act now. You can change your health insurance coverage any time until the end of the 2015 open enrollment period ending Feb. 15, 2015, even if you were automatically enrolled in your 2014 plan. After that, you can’t buy coverage until the 2016 open enrollment period unless you qualify for a special enrollment period.
If you have more questions, TurboTax has you covered. Get answers about auto-renewal in the Health Insurance Marketplace and how the Affordable Care Act impacts you and your taxes at TurboTax Health.