Auto-Renewal Health Insurance Plans and Hidden Tax Credits: A Cautionary Tale of ACA Insurance

Auto-Renewal Health Insurance Plans and Hidden Tax Credits: A Cautionary Tale of ACA Insurance

We live busy lives, and it’s easy to let things like health insurance renewal slip through the cracks. However, a recent post highlights the importance of staying on top of your coverage.

In this case, a family was surprised to learn that their health insurance had been auto-renewed without their knowledge. Not only that, but they were also automatically enrolled in tax credits that they were not eligible for. As a result, they now face a bill for over $1,000.

How Did This Happen?

The Affordable Care Act (ACA) allows for health insurance plans to be automatically renewed if you don’t take action to cancel them. This is designed to ensure that people have continuous coverage, but it can also lead to unexpected surprises.

In this case, the family had not taken action to cancel their plan because they were not aware that it was up for renewal. They had also not completed their application for 2022, which meant that the marketplace used their 2021 information to determine their eligibility for tax credits.

Beware of Auto-Renewal

The ACA’s auto-renewal provision can be helpful for people who want to keep their existing coverage, but it’s important to be aware of the potential consequences. If you don’t want your plan to be automatically renewed, you need to take action to cancel it before the renewal date.

You can cancel your plan by:

Logging into your HealthCare.gov account
Calling the Marketplace Call Center at 1-800-318-2596
Visiting your state’s health insurance exchange website

Be Careful with Tax Credits

Tax credits are a valuable form of financial assistance for people who qualify. However, it’s important to make sure that you are actually eligible for them before you enroll. If you are not eligible, you may have to pay back the tax credits you received.

You can check your eligibility for tax credits by:

Using the HealthCare.gov eligibility calculator
Contacting a licensed health insurance agent

What to Do If You’re in the Same Situation

If you find yourself in the same situation as the family in the post, there are a few things you can do:

Contact your health insurance company and explain the situation. They may be able to help you cancel your plan or reduce your premium.
Contact the Marketplace Call Center at 1-800-318-2596. They can help you understand your options and appeal your eligibility for tax credits.
Seek professional help from a licensed health insurance agent. They can help you understand your coverage options and make sure you are getting the best possible deal.

Dealing with health insurance can be confusing, but it’s important to stay informed and take action to protect yourself. By being aware of the auto-renewal provision and the potential risks of tax credits, you can avoid unexpected surprises and ensure that you have the coverage you need.