ACA Options and Temporary Insurance

Open Enrollment for 2017 Affordable Care Act (ACA) health coverage started November 1, 2016 and lasts through January 31, 2017. If you enrolled in a health plan by December 19, 2016, your new coverage will start on January 1, 2017.

If you do not purchase or change your healthcare plan during the 3-month open enrollment period, you will not be able to enroll in a new ACA plan for 2017 unless you qualify for an exception. These include Medicaid or the Children’s Health Insurance Program (CHIP) or a Special Enrollment Period (requires a change in life situation).


Here we cover your health insurance options, complete with pros and cons:

Enroll in a Marketplace Plan

    The Health Insurance Marketplace is a government-run exchange where companies list their approved health plans.

    If you have a 2016 Marketplace plan and do not change it during this period, it will likely be auto-renewed for 2017.

    All Marketplace plans meet the requirements for minimum essential coverage under the ACA. They are divided into four general benefit categories:

    • Bronze plans offer the lowest premiums but have higher deductibles and cover a lower percentage of health care expenses than other plans.
    • Silver plans are the middle-of-the-road option. They have higher premiums than Bronze plans, but offer lower deductibles and a higher percentage of covered costs.
    • Gold plans have relatively high premiums, but also offer low deductibles and a high percentage of health care expense coverage.
    • Platinum plans have the highest premiums, lowest deductibles, and cover the highest percentage of expenses.

    Important Note:

    Marketplace plans are the only plans that offer two income-based cost-reduction benefits.

    The first is the premium tax credit. This helps lower your monthly premium payments if your income is low enough to qualify.

    The second is the cost-sharing reduction. This benefit reduces the amount of money you have to pay out-of-pocket for health expenses – again, if your income is low enough to qualify. You can only get this benefit if you purchase a Silver plan.


    Pros of a Marketplace Plan:

    • Guaranteed coverage
    • No pre-existing condition exclusions
    • Range of companies & plans to choose from
    • Easy comparison between plans and plan levels
    • Income-based tax credit & cost-sharing reduction

    Cons of a Marketplace Plan:

    • May be expensive
    • Health Maintenance Organization (HMO) plans are much more prevalent than Exclusive Provider Organization (EPO) plans.
      • With an HMO, you pick one primary care physician; a referral is required in order to see another health care professional. With an EPO, you don’t need to choose a primary care physician and you don’t need referrals, but you have a limited network of doctors and hospitals to choose from.
    • Not all insurance companies include their plans in the Marketplace

    A Marketplace Plan Is Ideal for:

    • Individuals who do not have health coverage through an employer
    • Individuals in low-income brackets
    • Families with many dependents
    • Individuals who want a relatively simple insurance shopping experience

    Enroll in a Marketplace plan at


 Enroll in an ACA Plan Outside the Marketplace

You may purchase a private health plan that counts as qualifying health coverage directly through an insurance carrier outside the Marketplace. This gives you much more control over choosing a specific company, but also makes comparing different companies more labor intensive.

As with Marketplace coverage, these plans are only available during the 3-month Open Enrollment Period, or to individuals who qualify for a Special Enrollment Period.


Pros of an ACA-Compliant Plan Outside the Marketplace:

  • High degree of control over the insurance company you purchase from
  • More flexibility in choosing a provider network
  • Larger overall selection of plans

Cons of an ACA-Compliant Plan Outside the Marketplace:

  • No income-based cost-reduction benefits
  • Difficult comparison shopping
  • May be difficult to find all companies offering plans in your state

An ACA-Compliant Plan Outside the Marketplace Is Ideal for:

  • Those who want a higher degree of control over their insurance shopping experience
  • Individuals with higher income levels who do not qualify for the Marketplaces' cost-reduction benefits
  • People who consider themselves more knowledgeable on how health insurance works

To Enroll in These Plans, You May:

  • Go directly to insurance company websites
  • Work with an insurance agent
  • Visit an aggregator website that lists many companies' plans


 Stick with Your Current, Grandfathered Plan (Less Common)

A grandfathered plan is a health plan that was created on or before March 23, 2010 and has not been changed in a manner that drastically cuts benefits or increases costs for policyholders.

These plans are considered qualifying health coverage, so you won't be subject to the tax penalty by carrying a grandfathered plan. However, these plans do not have to offer all the benefits required of other ACA-compliant plans.

While a grandfathered plan cannot enroll new people, those enrolled prior to March 23, 2010 may keep their plan. However, your insurance company may stop offering your grandfathered plan as long as it provides you with 90-days’ notice and other available options. In that situation, you would be eligible to buy a Marketplace plan as part of a Special Enrollment Period.

Check your insurance plan documentation to see if you have a grandfathered plan.


Pros of a Grandfathered Plan:

  • Required to offer some of the ACA's minimum essential benefits
  • Good price-benefit balance
  • Keep your same doctors
  • No need to make changes to your coverage

Cons of a Grandfathered Plan:

  • Less extensive benefits than other ACA-compliant plans
  • May be canceled by the insurance company (with 90 days’ notice)
  • If you purchased your grandfathered plan individually (not through an employer), it is not required to cover pre-existing conditions

A Grandfathered Plan Is Ideal for:

  • Individuals who are comfortable with the price and benefits of their current grandfathered plan

See your options if your grandfathered plan is cancelled here.


If You Miss Open Enrollment

You should always choose to purchase an ACA-compliant health plan when the option is available to you.  However, outside the Open Enrollment Period, a short-term medical insurance plan is your only option for coverage, unless you qualify for a Special Enrollment Period (SEP), Medicaid, or the Children’s Health Insurance Program (CHIP).

Short-term medical insurance (STM) policies are available outside of Open Enrollment to provide you with temporary coverage until you are able to secure long-term insurance again. During Open Enrollment, you can also use a short-term policy to cover the waiting period before your ACA coverage begins.

Short-term policies are do not count as minimum essential coverage and should never be used as a long-term solution. They offer limited-duration coverage of less than 3 months.

Short-term policies have the following limitations:

  • do not cover pre-existing conditions
  • cannot be renewed
  • are not guaranteed issue (your application could be denied)
  • do not cover preventative, wellness, or immunization expenses
  • do not cover prescription drugs (except during a covered hospitalization)

These limitations exist due to short-term insurance's definition of being a gap-filler meant for short durations of coverage.

If you purchase a short-term policy as your sole coverage, you will very likely still be subject to the ACA tax penalty for not maintaining minimum essential coverage.

However, if you have a brief coverage gap of only 1 or 2 months, you can claim a “ short gap in coverage” exemption to avoid the fee. You must have ACA-compliant coverage the rest of the year to qualify.

Pros of
Short Term Medical Insurance :

  • Affordable coverage for unexpected illness and injury
  • Available to bridge a coverage gap or cover a waiting period
  • Available for purchase any time of year
  • Fast and easy enrollment process

Cons of Short Term Medical Insurance:

  • Limited benefits
  • No coverage for pre-existing conditions
  • No coverage for preventive and wellness care
  • Coverage cannot be renewed
  • Coverage is not guaranteed
  • Not eligible for premium tax credit
  • Subject to ACA tax penalty

A Short-Term Medical Plan Is Ideal for:

  • Individuals looking to bridge a temporary insurance gap
  • Individuals looking to cover a waiting period
  • Individuals who need coverage outside of Open Enrollment (and who do not qualify for an SEP, Medicaid, or CHIP)



Tokio Marine HCC - MIS Group international insurance products are underwritten by Lloyd's. Tokio Marine HCC - Medical Insurance Services Group (MIS Group) is a service company and a member of the Tokio Marine HCC group of companies. Tokio Marine HCC - MIS Group has authority to enter into contracts of insurance on behalf of the Lloyd's underwriting members of Lloyd's Syndicate 4141, which is managed by HCC Underwriting Agency Ltd.