Your Health Care Coverage: Information on Health Insurance
Most people must have health insurance that meets federal coverage standards or pay a tax penalty. Health plans provided by your employer and most state or federal government health plans (Medicare, Medicaid, CHIP, TRICARE, and some veterans' health programs) usually satisfy this requirement.
Federal law exempts some people from the requirement to have insurance or pay a tax penalty. You might be exempt from the penalty if:
- you were uninsured for fewer than three months of the year,
- you qualify for a hardship exemption from the marketplace,
- the only coverage you can get would cost more than 8 percent of your household income, or
- you have a household income below the tax-filing threshold ($10,300 for an individual).
If you don’t have health insurance through your job or a government program, you may buy a plan from an insurance company or agent. You can also buy coverage through the federal health insurance marketplace at HealthCare.gov or by calling 1-800-318-2596. For lists of companies and health maintenance organizations (HMOs) selling individual plans in Texas, visit TDI's Lists of Companies and HMOs.
- Open enrollment. You usually must buy health insurance during the annual open enrollment period. The open enrollment period is from November 1 to January 31 each year. You may qualify to buy health insurance at other times of the year if you lose existing coverage, or have life changes like getting married, getting a divorce, or having a baby.
- Preexisting conditions. Health insurance companies must sell a plan to anyone who applies during the open enrollment period. Companies may not deny you coverage or charge you more because of a preexisting condition or disability.
- When deciding your premium, insurance companies may consider only your age, where you live, whether you smoke or use tobacco, and whether the coverage you're buying is for an individual or a family. They may not consider your health status, medical condition or history, claims experience, genetic information, gender, disability, or other health factors.
- Tax penalty. If you don't get coverage, you'll have to pay a tax penalty. You pay the penalty when you file your federal income taxes. For more information about tax penalties, visit the HealthCare.gov fees page.
You might qualify for a subsidy to help pay for coverage if your income is between 100 percent and 400 percent of the federal poverty level. In 2016, this means an income between $47,520 for a single person or between $24,300 and $97,200 for a family of four. If your income is below 100 percent of the poverty level, you aren't eligible for a subsidy. However, you won't have to pay the tax penalty if you don't have health insurance.
Subsidies are available only when you buy a health plan through the marketplace. You can't get a subsidy if you buy directly from an insurance company or if you can get affordable health coverage at work.
For more information about subsidies, visit the HealthCare.gov subsidies page.
To get the most out of your health insurance, it's important that you understand what the plan covers and how it works. State and federal laws require plans to cover specified benefits, but each plan works a little differently.
Health plans are legal contracts between you and an insurance company or HMO. A plan issued by a health insurance company is called a policy, while a plan issued by an HMO is called an evidence of coverage. Both types of health plans are commonly called "comprehensive" or "major medical" coverage.
Health plans pay only for covered services, so it's important that you understand exactly what your plan covers. Also make sure you understand the costs you’ll be responsible for paying yourself. This includes deductibles, copays, and coinsurance. Review the Summary of Benefits and Coverage that comes with your health plan. If you want to read the fine print before buying a plan, ask the company to give you a written description of the plan’s terms and conditions or a sample contract.