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ACA Minimum Essential Coverage + Qualified Health Plans
Major medical insurance is comprehensive, "qualifying" healthcare coverage. You may know it by a different name, “Obamacare.”
Since the Affordable Care Act (ACA) went into effect in 2014, all medical insurance plans being sold as major medical coverage are required to meet a set of minimum coverage standards (see the next section).
Any health insurance plan that does not meet that minimum requirement is not considered a major medical plan.
ACA health insurance plans are required to cover the following healthcare services, often referred to as the 10 essential health benefits:
Ambulatory patient services
Maternity and newborn care
Mental health and substance use disorder services, including behavioral health treatment
Rehabilitative and habilitative services and devices
Preventive and wellness services and chronic disease management
Pediatric services, including oral and vision care
ACA major medical insurance is required under law to be “guaranteed issue.” That means you cannot be denied coverage based on health status (including pre-existing conditions), age, gender, or other factors.
However, you can be charged more for some things such as age, tobacco use, family size and geographic location.
As of 2019, the ACA individual mandate is no longer being enforced with a federal tax penalty for adults 26 and older that opt out of coverage without qualifying for an exemption. However, some states have individual mandates and tax penalties for going without qualifying coverage.
Even though you can't be penalized for not having major medical coverage under federal law, you should still consider these more comprehensive plans if you:
Obamacare, which is a nickname for the Affordable Care Act (ACA), remains law. As such, individual major medical insurance policies must be guaranteed issue. All individual major medical insurance must also include the 10 essential health benefits and no-cost preventive care as specified in the ACA.
However, the ACA’s individual shared responsibility payment will be repealed Jan. 1, 2019. That means you will not owe a tax penalty if you go without minimum essential coverage in 2019. If you were uninsured in 2018 and did not qualify for an exemption from the individual mandate, you could owe the penalty when you file your 2018 federal taxes.
The federal tax penalty was eliminated effective Jan. 1, 2019. That means you won’t have to pay a federal tax penalty if you fail to enroll in minimum essential coverage for 2019.
However, if you went without minimum essential coverage in 2018 and were not exempt from the individual mandate, you could owe the penalty when you file your 2018 federal taxes. In addition, some states now have their own state mandates and penalties for going without minimum essential coverage.
The Affordable Care Act makes subsidies available to qualified individuals who purchase health insurance from HealthCare.gov or a state-based exchange.
You can also obtain estimates while you are shopping by using an online calculator tool. Such estimates may help you decide which major medical plan to select and help you decide whether or not to enroll in additional coverage such as medical gap insurance or hospital indemnity insurance, which can help with out-of-pocket medical expenses.
You may want to consider alternative coverage that isn’t major medical insurance, but that can help you pay for unexpected medical expenses. Short term medical insurance is one such option.
If you are concerned about your major medical insurance policy’s high deductible, you may want to consider supplemental insurance to help with out-of-pocket expenses not covered by your major medical policy. Hospital indemnity insurance policies and medical gap are two types of supplemental insurance that can help. In some states, you must already have a major medical policy in order to obtain hospital indemnity insurance.
There are many places to buy major medical insurance as well as alternative coverage, including HealthCare.gov, state-based health insurance exchanges, websites such as healthedeals.com, and through health insurance agents. The best coverage and the right place to buy it largely depends on your personal situation.
Choosing health insurance coverage can definitely feel overwhelming, and the temptation can be to focus on monthly premium rather than the big picture. To find the best health insurance plan for you, start by considering your healthcare needs and budget for the year to come. Also, be sure to consider what your healthcare expenses were in the past year and if your current coverage was adequate. Did anything change, or do you expect it to change in the year to come?
There are many places to purchase ACA-compliant health insurance, alternative health insurance, supplemental insurance and health insurance add-ons such as telemedicine. If you want to buy an Obamacare policy that qualifies for a subsidy, you’ll want to shop HealthCare.gov or a state-based health insurance exchange. There are other places to buy if you don’t qualify for a subsidy or want to explore off-exchange options.
Learn more about:
November to December is the annual open enrollment period for individual health insurance plans. In past years, the period ran from November 1 to December 15, with some states that run their own exchanges offering an extended open enrollment period through the end of December or into January.
Individual major medical coverage can only be obtained during the annual ACA open enrollment period (typically Nov - Dec) unless you qualify for a special enrollment period due to losing your coverage through a qualifying life event like getting married or divorced, moving to a new state or area where your plan isn’t available, having a child or losing your job.