Avoiding Obamacare: How to Avoid the Penalty Tax While Remaining Covered

Obamacare Open Enrollment starts October 1- just a few days from now. For many people, that day has been long anticipated as a day marking the enrollment in improved plan designs and premium subsidy payments from the government.  Others who may not be so positively affected by the changes are indifferent or even actively against health care reform.  Do you want to avoid new Obamacare compliant health plans? Here are a few ways to stay out of the new plan designs- some short term, some long term:

For Individuals

  • Stay on your grandfathered plan– the easiest way to avoid Obamacare and its changes is to already be enrolled on a grandfathered plan.   If you have been on your plan for the last several years without interruption or changes, there’s a good chance you may be grandfathered.  Check with your carrier or your agent to see if your plan qualifies.  However, if your carrier is leaving the market entirely, like Aetna in California, your plan is grandfathered but will be terminated when they do exit.
  • Enroll in your employer-sponsored group plan– Check with your HR coordinator at work to see if there is a group health insurance option for you to enroll in. Depending on the size of your group, these plans may be only slightly affected or even unchanged by Obamacare.  Many group Open Enrollment periods are in the 4th quarter, so the timing may be just right to sign up.
  • Sign up now with a carrier not participating in the exchange-  In California, all non-grandfathered plans offered by carriers participating in the exchange will be terminated on 12/31/13.  However, California does have one non-participating carrier that is still currently accepting applications and will cover you throughout 2014- CIGNA.   If you sign up for a plan with CIGNA in the 4th quarter of 2013, you can avoid the vast majority of the mandated Obamacare changes for 12 months.  While each case is unique, this is our recommended option for those who do not want to participate in the CoveredCA health care exchange or in ACA-compliant but do want to continue their coverage and also not be penalized with an additional fee on their taxes for not having insurance.

For Small Businesses and their Administrators

  • Participate in Early Renewal– Most small group health plans will undergo the Obamacare changes on their 2014 renewal date.  This means that if you renew 1/1/14, your changes will be in effect for the entirely of 2014.  If your renewal is 7/1/2014, then for the first half of the year you will keep your plan and the second half of the year you will have an ACA-compliant plan with all of the Obamacare-mandated changes.  Many carriers will allow you to renew your plan early, in the 4th quarter of 2013.  This will move your 2014 renewal to the corresponding month in 2014, staving off Obamacare changes until then.  While every case is different, groups larger than 10 lives will likely benefit from this early renewal option, for a variety of technical reasons which can be explained during a 1 on 1 consultation– just ask!
  • Drop coverage entirely, send employees to the exchanges– Many small businesses are exploring the option of dropping their group coverage entirely and allowing their employees to shop the market on their own, taking advantage of the government exchanges and subsidies.  This is a decision that should not be made lightly, as the repercussions for employer and employee alike can be widespread and lasting.  Because each small group case is so unique, a 1 on 1 needs evaluation is the recommended course of action if you are even considering this route.

For more detailed information specific to your unique case, contact Quotebroker today. A licensed specialist will respond to your inquiry same-day.