Reenrolling: Should I stay or should I go?

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If you’re already enrolled in an ACA-compliant health plan through your state’s exchange, congratulations. You’ve almost certainly improved your health coverage over what you had prior to 2014, and if you’re eligible for premium subsidies, you might also be paying less for your coverage than you were back then.

But now that you’re enrolled, can you sit back, relax and simply hold on to the plan that you diligently researched?

In most states, yes. But doing so is probably not in your best interest – it pays to shop around during open enrollment.

Got coverage through Kentucky’s exchange?

If you have coverage through the exchange in Kentucky, you’ll need to re-enroll for 2017, as Kynect will be transitioning into a supported state-based marketplace, and will be using the HealthCare.gov enrollment platform.

Auto-renewal available everywhere else

Enrollees in Nevada and Oregon had to re-enroll for 2015 when their exchanges transitioned to the supported state-based model, and the same was true for Hawaii residents who had to re-enroll for 2016. But in all three of those states, HealthCare.gov will continue to be the enrollment platform for 2017, so most current enrollees will be eligible for auto-renewal.

Insureds in Massachusetts and those receiving premium subsidies in Maryland and Idaho also had to re-enroll for 2015 due to changes in the enrollment software. And Rhode Island required everyone to manually renew their coverage for 2015. But in all four of those states, auto-renewal was available for 2016, and will continue to be available for 2017.

There are some caveats

So auto-renewal will be available in 49 states plus DC, with coverage and subsidies (both premium subsidies and cost-sharing subsidies) continuing into 2017 without enrollees having to do anything during open enrollment. But there are some caveats that are particularly important for people with premium subsidies. (Details were clarified in April 2015 with CMS guidance on re-enrollments, along with a re-enrollment notice published in August 2015, and the 2017 Benefit and Payment Parameters published in early 2016.)

• Enrollees who got a premium subsidy in 2015 and failed to file a tax return or reconcile their tax credit with the IRS will be eligible for auto-renewal of their policy into 2017, but without any subsidies. (In July 2015, the IRS noted that nearly 1.5 million taxpayers who received subsidies in 2014 had not filed a return and/or Form 8962 to reconcile the subsidy. The IRS continued to reach out to those individuals, and ultimately opted to continue 2016 subsidies for people who didn’t file Form 8962 for 2014 , but about 57,000 people who simply didn’t file 2014 tax returns at all did end up losing their subsidies in 2015. The leniency that was granted to people who didn’t file Form 8962 for 2014 was a one-time free pass: going forward, subsidy recipients must always file a tax return and Form 8962 in order to reconcile their subsidies for the year that just ended. Failure to do so will result in a loss of subsidies for the coming year.)

• HealthCare.gov enrollees who are receiving a subsidy but whose 2015 tax return indicated an income at or above 500 percent of the poverty level (the cut-off for subsidy eligibility is 400 percent) will be eligible for auto-renewal but without any subsidies for 2017. State-run exchanges are allowed to set their own rules on this, and it varies from state to state. But the subsidies still have to be reconciled on tax returns; if an insured receives subsidies and then ends up with an income above 400 percent of the poverty level, the full amount of the subsidy would have to be returned to the IRS.

• HealthCare.gov enrollees who didn’t provide the exchange permission to obtain updated tax return data for use in the annual subsidy eligibility determination process will be eligible for auto-renewal of coverage but without subsidies. (A subsidy can still be obtained if you return to the marketplace and verify your updated financial information). State-run exchanges can set their own rules regarding enrollees in this situation.

If you’re in any of the situations described above, you’ll receive a notice from the exchange regarding your renewal. If that happens, it’s vitally important that you communicate with the exchange to make sure that your information is updated and accurate.

Insurer leaving the exchange? HHS now has an automatic re-enrollment protocol

Auto-renewal has always been the default (for Healthcare.gov and almost all of the state-run exchanges) if the insured’s current plan will still be available in the coming year, or if the insurer has indicated that there’s a replacement plan that will be standing in for a plan slated for discontinuation. But for 2015 and 2016, there was no auto-renewal provision when insurers left the exchange altogether; people in those situations had to manually select a new plan or else be uninsured as of January 1.

But in the 2017 Benefit and Payment Parameters, HHS introduced an automatic re-enrollment hierarchy that they plan to use—starting with the open enrollment period for 2017 coverage—if an insurer is leaving the exchange and won’t have any plans available for the coming year. The auto re-enrollment process would only be activated if the insured fails to pick a new plan during open enrollment. However, state insurance regulators in Nebraska and Wisconsin have criticized the auto re-enrollment process that HHS is planning to use, saying that it amounts to selling insurance without a license to do so, and questioning the potential breach in security and privacy that could occur when people are automatically enrolled in exchange plans with a carrier other than the one they initially selected.

UnitedHealthcare is exiting the individual market in most of the states where they currently offer exchange plans; Humana will exit the individual market in several states, and Moda is pulling out of Alaska‘s individual market. These are a few examples of situations where auto-renewal would not have been available via Healthcare.gov in 2015 and 2016, but will be available for 2017 via a new plan.

State-run exchanges can establish their own rules regarding automatic re-enrollment for people whose carrier is exiting the exchange, if they choose to do so.

Auto-renewal isn’t foolproof

Although most exchange enrollees will be eligible for auto-renewal for 2017, consumers should be aware that letting their policies automatically renew might not be in their best interest, especially if they are receiving premium subsidies. Subsidies are based on the benchmark plan in each area, which is defined as the second-lowest-cost Silver plan. But applicants are free to apply their subsidy to any metal level plan, which can mean they pay more or less than the percentage of income they would be paying if they selected the benchmark plan.

From 2014 to 2015, and again for 2016, benchmark plans did not remain the same in most areas due to premium fluctuation. And 2017 is shaping up to have significant changes in benchmark prices. Although overall rates may fluctuate considerably, some carriers increase rates more than others, some reduce their rates, and carriers can enter or leave the market from one year to the next.

So although you might have selected the plan that represented the best value for 2016, that same plan might not offer the best value in 2017. The amount of your subsidy could change if your area’s benchmark plan changes, and new plans might be available that offer lower premiums, different provider networks, or a better overall value.

Because of this, all enrollees are encouraged to come back to the exchange during open enrollment to compare all of their options for 2017 and make sure the information used to calculate their subsidies is current.

For 2016, a slightly larger percentage of renewing exchange enrollees actively selected a plan (as opposed to relying on auto-renewal) than had done so the year before.

It’s definitely worth your time to reconsider your options for 2017. You may end up keeping your current plan and being able to let it automatically renew. But you might find there’s a better option available, and the enrollment process continues to get smoother and easier as time goes by.

If you have an ACA-compliant plan that you purchased outside the exchange, it’s worth checking again during open enrollment to see whether you’d be better off with a plan through the exchange for 2016, or with a different off-exchange plan. If your plan is grandmothered (purchased after the ACA was signed into law but before the bulk of the ACA’s provisions took effect in January 2014), it may be eligible for auto-renewal or it may not, depending on where you live and what health insurance carrier you have.

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Reenrolling: Should I stay or should I go?