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What happens if you stop paying your health insurance premiums? You could lose your coverage.
When you experience the consequences of being late or falling behind a couple of months of health insurance premium payments depends on whether or not you receive an advanced premium tax credit.
If you receive an advanced premium tax credit and have made at least one health insurance premium payment, the law requires insurance companies to give you a 90-day grace period to bring your payments up to date.1 After 90 days, your coverage may be terminated. If you do not receive an advanced premium tax credit, the grace period is likely to be much shorter and will vary by state—though it is typically around 31 days.2
Once you lose your health insurance plan, you cannot reenroll until the next Obamacare open-enrollment period unless you qualify for a special enrollment period. In the meantime, plan how you will pay for healthcare.
If you do not have health insurance and need healthcare, you will have to pay medical bills out of pocket.
Here are some ways to help mitigate costs:
Paying medical bills entirely out of pocket can be difficult for many individuals and families. A short term health insurance plan can help pay for unexpected medical bills when you are in between Obamacare plans.
While it is not minimum essential coverage, short term health insurance:
If you live in a state where Medicaid has been expanded to adults under age 65 whose incomes up to 138 percent of the federal poverty level, you may qualify for free or low-cost health insurance.3
If your state did not expand Medicaid, you and your family may still qualify based on other criteria. Contact your state Medicaid office for information.
Medicaid enrollment goes year-round, which means you don’t have to wait for an Obamacare open-enrollment period. To learn about Medicaid eligibility in your state, visit medicaid.gov.
Be prepared for tax time
Remember: Going without health insurance that qualifies as minimum essential coverage may mean you owe a tax penalty known as the shared responsibility payment. This payment will be due when you file your federal income taxes.
If you lose your private ACA-compliant health insurance, you may be able to avoid this penalty if you:
As 2016 open enrollment nears, prepare to enroll in another plan that qualifies as minimum essential coverage. Start thinking about your healthcare needs and budget, and consider working with a health insurance agent or broker who can help you find the right coverage for you and your family.
Thinking short term?
Do you have questions about short term health insurance or need help selecting a plan? Call 888-839-7679 to speak with an IHC representative.
1Henry J. Kaiser Family Foundation. “Health Reform FAQs: What happens if I’m late with a monthly health insurance premium payment?” http://kff.org/health-reform/faq/health-reform-frequently-asked-questions/#question-what-happens-if-im-late-with-a-monthly-health-insurance-premium-payment
3HealthCare.gov. “Medicaid Expansion & What It Means.” https://www.healthcare.gov/medicaid-chip/medicaid-expansion-and-you/
4Internal Revenue Service. “Individual Shared Responsibility Provision—Exemptions: Claiming or Reporting.” Last reviewed or updated Aug. 12, 2015. http://www.irs.gov/Affordable-Care-Act/Individuals-and-Families/ACA-Individual-Shared-Responsibility-Provision-Exemptions
SHORT-TERM MEDICAL EXPENSE (STM)
THIS IS A SHORT TERM HEALTH BENEFIT PLAN THAT IS NOT INTENDED TO QUALIFY AS THE MINIMUM ESSENTIAL COVERAGE REQUIRED BY THE AFFORDABLE CARE ACT (ACA). UNLESS YOU PURCHASE A PLAN THAT PROVIDES MINIMUM ESSENTIAL COVERAGE IN ACCORDANCE WITH THE ACA, YOU MAY BE SUBJECT TO A FEDERAL TAX PENALTY. ALSO, THE TERMINATION OR LOSS OF THIS POLICY DOES NOT ENTITLE YOU TO A SPECIAL ENROLLMENT PERIOD TO PURCHASE A HEALTH BENEFIT PLAN THAT QUALIFIES AS MINIMUM ESSENTIAL COVERAGE OUTSIDE OF AN OPEN ENROLLMENT PERIOD. THIS POLICY INCLUDES A PRE-EXISTING CONDITION EXCLUSION PROVISION.
About The IHC Group
The IHC Group is an organization of insurance carriers and marketing and administrative affiliates that has been providing life, health, disability, medical stop-loss and specialty insurance solutions to groups and individuals for over30 years. Members of The IHC Group include Independence Holding Company (NYSE:IHC), American IndependenceCorp. (NASDAQ: AMIC), Standard Security Life Insurance Company of New York, Madison National Life Insurance Company, Inc. and Independence American Insurance Company. Each insurance carrier in The IHC Group has a financial strength rating of A- (Excellent) from A.M. Best Company, Inc., a widely recognized rating agency that rates insurance companies on their relative financial strength and ability to meet policyholder obligations. (An A++ rating from A.M. Best is its highest rating.) Collectively, the companies in The IHC Group provide insurance coverage to more than one million individuals and groups. For more information about The IHC Group, visit www.ihcgroup.com.
About IHC Specialty Benefits, Inc.
IHC Specialty Benefits, doing business as Health eDeals Insurance Solutions is a full-service marketing and distribution company that focuses on small employer, individual and consumer products. Health eDeals markets products through general agents online, telebrokerage, advisor centers, private label and directly to consumers. For more information about Health eDeals visit www.HealtheDeals.com.