Many small business employees purchase their own individual health insurance through the ACA Marketplaces or private insurance websites. When looking to buy or renew their plan, employees may not know where to turn when they have questions.
As their employer, you are a logical place to start. This is especially true if you offer a healthcare reimbursement plan (HRP). With open enrollment starting November 1, here are five tips to help answer your employees' questions about purchasing individual health insurance.
1. Be Educated About the Open Enrollment Period
Open enrollment for 2017 begins on November 1. In order to guarantee coverage on January 1, 2017, your employees must be enrolled by December 15, 2016. The last day to enroll or modify an individual health insurance policy is January 31, 2017.
If your employees have not finished their applications by January 31, they will be forced to wait for the 2018 open enrollment period - or check to see if they qualify for a special enrollment period.
2. Know Where Employees Can Shop
When it comes to buying health insurance, employees have a few options on where to shop. Here are three main ways:
ACA Marketplaces: Employees may shop online through the ACA Marketplaces (ex: Healthcare.gov). If employees are eligible for the premium tax credits, this is a good place to start.
Health Insurance Broker: Employees may work with a licensed broker to purchase a policy. Brokers are also a great resource for explaining the ins and outs of insurance.
Health Insurance Website: There are several major websites specializing in individual and family health insurance policies. Common examples include StrideHealth.com and HealthSherpa.com. (Note: If you are eligible for premium tax credits, make sure the website can offer access to Marketplace plans.)
3. Understand the Different Coverage Tiers
Individual health insurance plans are categorized into four tiers named after types of metal: Bronze, Silver, Gold, and Platinum.
The differences between these tiers has to do with cost of premiums (and deductible) and out of pocket costs upon receiving medical care. Bronze is the least expensive, while Platinum is the most expensive.
4. Be Familiar with the Lingo
There are five major terms that you should understand before discussing individual health insurance options with your employees:
Deductible: The amount the enrollee pays before the insurance company begins to pick up expenses.
Premium: The amount the enrollee pays the insurance company each month for the coverage.
Copayment: A set dollar amount enrollees pays when they see the doctor or pick up a prescription.
Co-insurance: The percentage of covered expenses the enrollee is expected to pay after the deductible is met.
Out of Pocket Maximum: This is the maximum amount the enrollee could pay throughout the coverage period. It does not include premiums, but generally does include deductibles, copayments, and co-insurance.
5. Learning About the Premium Tax Credits
For eligible employees, premium tax credits can significantly lower the cost of individual health insurance. There are two major requirements for determining premium tax credit eligibility on the ACA Marketplace:
- You meet specific income requirements.
- Your employer (or your spouse's employer) does not offer you health insurance.
Employees shopping for individual health insurance may have questions, and as their employer, you could be a natural place for them to turn. It is important that you be educated ahead of time so you are ready to help. For more information, check out our free eBook Small Business Guide to Open Enrollment.
How are you helping your employees purchase individual health insurance? Let us know in the comments below!