In 2019 we’ll say goodbye to the individual health insurance mandate*, but what does this mean for you and your employees?
Well first off, what is the individual mandate?
If your eyes just rolled to the back of your head because you're thinking we're going to dive into a convoluted explanation about health insurance regulations, don't worry - we won't go there. (Not today, anyway.)
Simply put, the individual mandate meant that individuals and families were required to be enrolled in an Affordable Care Act ("ACA") Qualified Health Plan during the year, or else pay a penalty fee.
The penalty cost was $695 per adult and $347.50 per child, for a maximum of $2,085 per family or 2.5% of the household income - whichever was greater.
So what does the removal of this requirement mean for me and my employees as individuals?
- You no longer will pay a penalty for not having insurance.
- You will no longer pay a penalty for not have the “right” insurance.
- You can now enroll in non-ACA (affordable care act) plans that can be lower costs, as they may choose to not cover everything the law mandates.
- New plans will pop in the marketplace due to the penalty being waived.
Many have argued that, while built with good intentions, the individual mandate negatively impacted those who could afford to be hurt the least, so this change may very well be positive news for those who could not previously afford “qualified” ACA health plans.
If not individual health insurance, then what?
If you’re among the many who are considering leaving your individual health plan in the new year, here are alternative health options to consider that may already be available in the marketplace, or will be making a comeback in the near future:
- Catastrophic Health Plans - plans that are much less expensive, but have higher deductible (10k, 20k+) to cover you in the worst case scenarios.
- Primary Care Plans - subscription plans that will cover most of your primary care needs, such as low-level doctors visits, physicals, labs, etc.
- Indemnity Plans - plans that reimburse you set amounts for specific claims (like a broken arm or leg) and diagnoses.
- Association Health Plans - associations use their members as leverage (and sometimes their members’ employees as well) to negotiate better plans and premiums for their members and participants.
*4 states, including the District of Columbia, Massachusetts, New Jersey and Vermont (beginning in 2020) are restoring the individual mandate to buy health insurance. Some additional states, including California, Connecticut, Hawaii, Maryland, Minnesota, Rhode Island and Washington, are also considering restoring an individual mandate at the state level.
If you’re an employer who doesn’t qualify for a group health plan (or perhaps the group plan that you quality for is too expensive), the Pendella team would be happy to discuss alternative options with you!
We work with industry leading partners and vendors who can set you up with the best plan for your specific needs. Contact us to learn more.