Understanding Marketplace Health Insurance
How can clients obtain health insurance if they plan to retire prior to the Medicare eligible age of 65 or lack job-based coverage? The federal Health Insurance Marketplace (www.healthcare.gov), also called the “Exchange,” is the website where individuals can browse, compare, and purchase health care plans available under the Affordable Care Act. Many states, including Pennsylvania, Maryland, New Jersey, and New York, have their own marketplace website. Please be aware of important deadlines and rules below.
Annual Open Enrollment is typically November 1 - January 15
- For coverage that starts January 1: Must enroll by December 15
- For coverage that starts February 1: Must enroll by January 15
Outside the yearly Open Enrollment window, coverage through the Marketplace can be obtained or changed only if there is a life change that qualifies for a Special Enrollment Period (SEP).
Qualifying life events include (but are not limited to):
- Getting married
- Getting divorced
- Having or adopting a baby
- Death of someone who shares the health plan
- Moving to a new area
- Turning 26 and losing coverage through a parent’s plan
- Loss of existing health insurance, including job-based coverage or student plans
Depending on the Special Enrollment Period type, there is a window of 60 days before or 60 days following the event to enroll in a plan through the federal or state insurance marketplace. With job-based health plans, action may need to be taken quicker, as the Special Enrollment Period for these plans is required to be at least 30 days, but may not be 60.
Planning Strategy
Advance payments of the premium tax credit (also generally referred to as a “subsidy”) can lower the amount paid each month for a federal or state marketplace plan. Since the premium tax credit is based on household income, most advisory clients likely do not qualify while they are working due to their income being too high. However, with creative planning, some early retirees may be able to take some of their income from tax-free or low-tax sources, potentially allowing them to qualify for the tax credit despite having significant assets.
For Use with the General Public. Financial Planning and Advisory Services offered through Vicus Capital, Inc., a federally Registered Investment Advisor.
