Speak to an advisor

7 Health Insurance Changes to Look for in 2016

7 Health Insurance Changes to Look for in 2016

Posted Nov 02, 2015 by Jenifer Dorsey

Every year during Obamacare open enrollment, you are faced with the decision to keep or change your health insurance plan for the following year. Your choice is likely impacted by your health and financial situation—which can change from one year to the next. Just as your circumstances change, so do health insurance plans and the laws associated with them.

As you shop for ACA-compliant 2016 coverage, be aware of possible changes to the following:

1. Premium rates

Will my health insurance premium go up in 2016? It’s a question a lot of people start asking as open enrollment nears. 

All states must approve and finalize Obamacare plan premiums by Nov. 1, 2015, when open enrollment begins. You may find yours fluctuates from 2015 to 2016—it may go up or down or remain relatively the same. 

As of Oct. 1, 2015, a Kaiser Family Foundation analysis of silver plans in major cities in 13 states showed the following average rate increases from 2015 to 20161:

  • 4.1 percent –the second lowest cost silver plan before tax credits
  • 1.9 percent – the second lowest cost silver after tax credits
  • 5.1 percent – the lowest-cost silver plan before tax credits
  • 2.9 percent – the lowest-cost silver plan after tax credits

Changes to your monthly premium may impact your decision to re-enroll in the same plan for 2016 or switch. Either way, it can be wise to shop around to be sure you are selecting health insurance that is agreeable to both your budget and your healthcare needs. 

2. Tax credits

Your premium tax credit is based on a sliding scale and impacted by a few factors, which include but are not limited to2,3:

  • Household size
  • Household income 
  • The benchmark plan (i.e., the second lowest cost silver plan) where you live

If you receive an advanced premium tax credit, which reduces your monthly health insurance payment, make sure you update changes to your household size and income—both during open enrollment and throughout the year. Also be sure to file your taxes and complete IRS Form 8962

3. Tax penalties

Under the Affordable Care Act, if you go without minimum essential coverage for more than a single period of up to three months in a year, you may owe a tax penalty known as the shared responsibility payment. 

The penalty increases annually. In 2016 it will be the higher of these amounts4:

  • 2.5 percent of your annual household income above the tax filing threshold to a cap of the national average bronze plan premium 
  • $695 per adult and $347.50 per child under 18 to a maximum penalty of $2,085 per family

If you are exempt from having qualified health insurance coverage, you will not owe the penalty, but you may need to apply for an exemption. You can find more information about exemptions at IRS.gov

4. Maximum out-of-pocket

The ACA requires your health insurance plan to cover essential health benefits at 100 percent after you reach your annual out-of-pocket limit. 

This out-of-pocket maximum changes annually and will be as follows in 20165

  • $6,850 for individual coverage
  • $13,700 for family

The maximum out-of-pocket is not required to include your health insurance premiums, non-essential health benefits, and or out-of-network costs including balance-billing amounts.6

5. Provider networks

Provider networks change. If you consider keeping your current health plan in 2016, check the provider network to ensure your preferred doctors and hospitals are still included. 

When shopping for different coverage, you should also look at the network and make sure your preferred providers are included—if you don’t have a preferred doctor or hospital, take a look to be certain the plans in-network providers are agreeable based on location and other factors important to you.

6. Drug formularies

Drug formularies are also subject to adjustments. Make sure the medications you take are still listed on your plan’s formulary drug list, and note any changes to cost.

7. Plan offerings

Health insurance carriers enter and exit the private marketplace as well as the ACA’s state-based and federally facilitated exchanges. They also make changes to the plans the offer. Keep that in mind before you decide to re-enroll in the same coverage. Why not take a look at what’s available for the new year before you commit?

If your plan or carrier plans to exit the market, as has been happening with the closure of health insurance cooperatives in many states, you will be notified.

Legal Disclaimers

1 The Henry J. Kaiser Family Foundation. “Analysis of 2016 Premium Changes in the Affordable Care Act’s Health Insurance Marketplaces.” Oct. 1, 2015. http://kff.org/health-reform/fact-sheet/analysis-of-2016-premium-changes-in-the-affordable-care-acts-health-insurance-marketplaces/

2 Internal Revenue Service. Rev. Proc. 2014-37. https://www.irs.gov/pub/irs-drop/rp-14-37.pdf

3 Internal Revenue Service. “The Premium Tax Credit. Updated Sept. 29, 2015. https://www.irs.gov/Affordable-Care-Act/Individuals-and-Families/The-Premium-Tax-Credit

4 Democratic Policy & Communications Center. “Shared Responsibility for Health Care.” http://www.dpc.senate.gov/healthreformbill/healthbill69.pdf

5 Office of the Federal Register. “Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2016.” Feb. 27, 2015. https://www.federalregister.gov/articles/2015/02/27/2015-03751/patient-protection-and-affordable-care-act-hhs-notice-of-benefit-and-payment-parameters-for-2016

6 HealthCare.gov. “Out-of-Pocket Maximum/Limit.” https://www.healthcare.gov/glossary/out-of-pocket-maximum-limit/