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Who is Eligible for Individual Health Insurance?

To be eligible for individual health insurance through the Marketplace, the criteria are actually very simple. You must: 

– live in the United States, 
– be a U.S. citizen or national, 
– not be incarcerated, and 
– not be enrolled in Medicare. 

This makes up a large majority of people in the US! However, simply being legally eligible for individual health insurance does not mean that this method makes the most sense for your situation. This can be confusing for some people. Today, I’m going to explain who an eligible and ideal candidate for individual health insurance is, and why you should take advantage of it if you fit the criteria. 

When is individual health insurance ideal?

It’s important to understand one of the key features of individual health insurance plans. What makes them ideal for some people is the opportunity to receive discounts on the cost of the plan! Discounts from the government are only available to certain groups of people. Let’s dive into the differences in criteria.

Who is an ideal candidate for individual health insurance?

Someone who qualifies for discounts is someone who is eligible and ideal for individual health insurance. 

In order to qualify for discounts on the cost of individual health insurance plans, a person must not have access to a traditional group plan through an employer. This could be through your employer, your spouse’s employer, or even your parent’s employer if you’re under age 26. 

For example, ideal candidates for individual health insurance are people who: 

– are self-employed (small business owners, entrepreneurs), 
– work for small businesses that do not offer group health insurance, 
– are unemployed, or 
– are retired and not yet 65 years old.

Again, anyone who is not offered a traditional group health insurance plan through an employer qualifies for discounted rates for Marketplace plans. That makes individual health insurance an affordable option for folks who otherwise might go uninsured!  

Who is not an ideal candidate for individual health insurance?

Someone who doesn’t qualify for discounts should probably find another option.

Alternatively, anyone who does have access to a traditional group plan through an employer will not qualify for discounted rates on Marketplace plans. These individuals are not ideal candidates for individual health insurance. This is simply because the plans would likely not be the most affordable option for their situation. 

In addition, people who qualify for government-sponsored programs like Medicaid or CHIP would be better off enrolling in those plans. And lastly, anyone who retires at age 65 or older is then eligible for Medicare coverage, making that the best plan option for them. 

To recap, people who are not ideal candidates for individual health insurance are those who:

do have access to a traditional group health insurance plan through an employer,
– qualify for Medicaid or CHIP, or
– are retired at age 65 or older, meaning they qualify for Medicare. 

What if my employer pays for me to purchase my own individual health insurance?

Ahh yes, you noticed the loophole!

Well, it’s not exactly a loophole—it’s totally legal—but it is a way for employers to ensure their employees can qualify for discounts on individual health insurance plans. Allow me to explain.

Sometimes, an employer will offer their employees a Supplemental Wage Increase (SWI) as a post-tax addition to their pay. The SWI is intended to be used by the employee to purchase health benefits. The employer does this instead of offering their employees a traditional group plan! You see, because the employer is not offering a group plan, this means the employees are automatically eligible for the discounts I keep mentioning. The employees can then use the supplemental wage increase to purchase a discounted Marketplace plan on their own if they desire.  

If I’m an ideal candidate, when can I enroll in individual health insurance?

You may have only one opportunity per year to enroll. 

If you’ve made it this far and identified yourself as someone who is eligible and ideal for individual health insurance, you might now be wondering when you can enroll! 

All eligible individuals can enroll in Marketplace plans during the annual Open Enrollment Period. This takes place each year starting on November 1. If you need to enroll in coverage at another time throughout the year, you may only be eligible to do so if you qualify for a Special Enrollment Period (SEP). People who qualify for Medicaid or CHIP may enroll at any time. 

Are the discounts on individual health insurance really that important?

In a word, yes! While it’s important to ensure that you are eligible for individual health insurance, it’s equally as important to make sure you qualify for the discounts that make individual plans so affordable. Be sure to check out my next blog, where I’ll discuss the cost of individual health insurance plans and the impact of these discounts—also known as tax credits. Thanks for taking the time to learn with me today!

Important Notice: Remodel Health does not intend to provide specific insurance, legal, or tax advice. Remodel Health always recommends consulting with your own professional representation to properly evaluate the information presented and its appropriate application to your particular situation.