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Small Business Employee Benefits and HR Blog

FAQs - Understanding Open Enrollment 2015

That time of year has come again: Open enrollment. It's your once-a-year time to decide on changes to your individual health insurance plan, or enroll in coverage for the first time. To help you feel more confident in your choices, here are a handful of FAQs to help you understand open enrollment for 2015.  

Q: What and When is Open Enrollment?

A: Open enrollment is the period of time each year when anyone can enroll in individual health insurance coverage. Individual health insurance is an insurance policy you purchase for yourself and your family – just like car insurance.

For 2015, open enrollment begins November 15, 2014 and ends February 15, 2015.

Q: How Do I Prepare to Enroll in Coverage?

A: You can prepare for open enrollment 2015 by gathering the necessary materials. By doing so, it will make applying for coverage quicker and easier.

Here is a list of the items you’ll need to apply for coverage:

  • Home and/or mailing addresses for everyone in your household who is applying for coverage.

  • Social Security Numbers for individuals in your household.

  • Documentation verifying legal immigration status, if applicable.

  • Employer and income information for every member of your household.

  • This may come in the form of pay stubs or W-2 forms.

  • Your best estimate of your household income for 2015.

  • Policy numbers for any current health insurance plans covering household members.

  • A completed “Employer Coverage Tool” for every employer-sponsored health insurance plan you or your household members are eligible for. Tip: The form should be filled out for every employer-sponsored health insurance plan you are eligible for-- not just the ones you are enrolled in. 

  • If you have health coverage in 2014, notices from your current plan that include your plan ID.

Q: How Do I Know Which Plan to Select?

A: Individual health insurance plans are now categorized in four standardized levels of coverage, called “metal tiers of coverage.” These categories help you better compare plans “apples to apples.”

  • Platinum: The plan pays 90%. You pay 10% of expected costs via deductibles, co-payments, and coinsurance.

  • Gold: The plan pays 80%. You pay 20% of expected costs via deductibles, co-payments, and coinsurance.

  • Silver: The plan pays 70%. You pay 30% of expected costs via deductibles, co-payments, and coinsurance.

  • Bronze: The plan pays 60%. You pay 40% of expected costs via deductibles, co-payments, and coinsurance.

See also: How to Choose the Best Health Plan This Open Enrollment

Q: What are Premium Tax Credits?

A: As part of the ACA, the federal government provides discounts for health insurance to eligible individuals and families. The discounts, called premium tax credits, help many people buy more affordable individual or family health insurance coverage through the new state Health Insurance Marketplaces. The premium tax credits are "advanced-payable" meaning they can be applied toward your premium when you purchase health insurance coverage. They provide significant savings, too. In 2014, 87% of people who purchased a health plan through the Marketplace received a discount, paying only $82/month on average.

See related article: FAQs - Health Insurance Premium Tax Credits

Q: What Happens If I Decide Not to Have Coverage?

A: The penalty for not having coverage in 2015 goes up. For 2015, if you opt out of health insurance, you’ll now pay the greater amount of either $325 per adult ($162.50 per child, up to $975 per family), or 2% of family income minus federal tax filing threshold. Keep in mind, the penalty increases again in 2016.

Read more about what happens if you don't buy health insurance.

Q: Why Does Open Enrollment Matter to Small Businesses?

A: Most small businesses want to offer health benefits to recruit and retain key employees, but traditional group health insurance is no longer affordable. In fact, group health insurance is no longer the best way to provide small business health benefits.

The solution? Allow employees to purchase their own individual health insurance plan, and reimburse employees for their premium, or a portion of their premium. This type of employer-funded individual health insurance is becoming the predominant way for small businesses to offer health insurance.

Open enrollment is the opportune time to transition to employer-funded individual health insurance, because all employees can enroll in an individual health insurance plan.

Now that you have a better of an understanding of open enrollment and what you need to do, you can feel confident in the decisions you make during open enrollment 2015. Additional questions? Leave a comment below.