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How to Purchase Health Insurance in the Health Insurance Marketplace for the First Time

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Purchasing health insurance for the first time can be overwhelming, but it doesn’t have to be. Free resources like TurboTax Health are available to help you understand your options.

With the Affordable Care Act now in effect, most Americans are required to have health insurance or face a tax penalty from the government for not having health care coverage.

As a result, many people are now faced with buying health coverage for the first time.

Whether you turned 26 and aged off your parents’ insurance plan, newly meet the requirement to purchase health insurance, or missed the enrollment deadline – don’t worry!

We have a few tips to help you start shopping for a health insurance plan.

Check to see if you qualify for a special enrollment period. The 2014 Health Insurance Marketplace open enrollment period ended on March 31, 2014 for the uninsured who don’t have health insurance options through their employer, Medicaid, and Medicare and enrollment for 2015 starts on November 15, 2014.

However, there are life events that will make you eligible for special enrollment, so you may be able to shop for a plan in the Marketplace right now.

What kinds of life events qualify you for special enrollment? Think big. Change in income, loss of employment, aging off your parent’s coverage (when you turn 26), graduating college, getting married or having a baby are all examples of events that may qualify you for a special 60-day enrollment period.

If you think you qualify, you can start by filling out a Marketplace application.

Understand What Your Options Are

If you don’t qualify for special enrollment, you will have to purchase a private health insurance plan outside of the Marketplace, apply for Medicaid or CHIP, or wait until November 15, 2014 to purchase in the Health Insurance Marketplace.

  • Private Health Insurance Plans Outside the Marketplace – In some cases insurance companies may sell private plans outside of the Marketplace and open enrollment that meet the minimum essential requirements under the Affordable Care Act.

If you purchase a private plan outside the Health Insurance Marketplace, you will not be eligible for a subsidy or premium tax credit as you would with a plan bought during the Health Insurance Marketplace open enrollment period.

  • Apply for Medicaid or CHIP – Medicaid and CHIP are also available in all states if your yearly income is below a certain income level. Your children may also qualify for coverage under Medicaid or CHIP even if you don’t qualify for Medicaid.
  •  Recently Unemployed May Qualify for COBRA – If you recently became unemployed, you might qualify for COBRA coverage through your employer. COBRA will temporarily continue your employer-sponsored health plan though you’ll be responsible for the premium.

There are also some cases where you may not have to purchase health insurance or pay a fee. You may qualify for an exemption for certain situations like, if you’re uninsured for less than three months, you don’t meet the IRS income requirement for filing a tax return, and for certain hardships to name a few.

Balance costs with your needs. Regardless of if you are eligible to purchase insurance in the Marketplace or are shopping for an individual plan, always do your research. When comparing potential options, plans with similar benefits will have varying out-of-pocket costs. You should first examine both your likely health needs and your budget to determine what’s feasible and appropriate to pay in monthly premiums, co-pays, or deductibles.

More questions? TurboTax has you covered. As with all tax laws, TurboTax will answer your questions to help you understand how the new health care law impacts you and your finances with TurboTax Health.

2 responses to “How to Purchase Health Insurance in the Health Insurance Marketplace for the First Time”

  1. Security on the Healthcare.gov website and the exchanges has been non-existent. But the subsidies are supposedly only available if one goes through an exchange (Federal or state, though that is subject to court decision.) So how can one protect ones personal information ?

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