Your guide to Obamacare: Frequently asked questions about the Affordable Care Act

This FAQ provides expert answers to the key issues about exchanges, enrollment and more.

Americans have many questions about Obamacare. Here are the answers to some of the most common ones.

Here are answers to some frequently asked questions about the exchanges.

 

Q. Who can buy on the marketplace? Can I buy on the exchange even if I am not eligible for subsidies?

A. The exchange can be used by individuals, families and small business owners who have 50 or fewer employees.

Q. If I have insurance from my employer, do I have to do anything?

A. You don't have to, but if you choose to do so, you can drop your employer's coverage and buy a plan from the exchange.

Keep in mind, depending on the type of employment coverage available to you, you might not qualify for certain savings offered by the exchanges.

Q. Can I buy insurance through the marketplace if I already have a serious health problem?

A. Yes. The amount you pay for a health plan will not be affected by your health status.
This means that you can't be charged more because of your health problem.

RELATED: YOUR GUIDE TO OBAMACARE: AFFORDABLE CARE ACT TO OPEN OCT. 1
It also means you will not have to wait to get the coverage you need.

Q. If I have Medicare, can I purchase a plan on the exchange?

A. Yes, but you can't get help paying for it.
Also, getting extra coverage on the exchange may not make sense.
That's because Medicare will be your main coverage, but you would still have to pay for a full health plan at New York State of Health.

Talk about this with an exchange helper to figure out the right strategy for you.

Q. Some groups are exempt from being required to have coverage. Who are they?

A. The categories include people who would have to pay more than 8% of their income for health insurance, people with incomes below the threshold required for filing taxes, those who qualify for religious exemptions, members of Indian tribes, undocumented immigrants, and people who are incarcerated.

Factors To Think About the Next Time You Are Purchasing Insurance

In terms of deciding whether to change personal-lines insurers and which new carrier to choose, price remains the primary —but not the only— factor considered by auto and homeowners’ consumers.

Indeed, when asked about their decision points when placing auto insurance for the Deloitte Research "Voice of the Personal Lines Insurance Consumer" surveys, more than two-thirds of the 1,080 respondents said price was either extremely (54 percent) or very (28 percent) influential the last time they changed carriers. The numbers were similar among the 1,080 homeowners surveyed, although a lower share (45 percent) cited cost as extremely influential, along with 30 percent who said the price was very influential.

Interestingly, among the four age segments surveyed, those 26-34 recorded the largest percentage (71 percent) of those ranking the price of auto coverage as extremely influential but also the lowest percentage (31 percent) among homeowner respondents ranking price as important. This could perhaps be explained by the fact that having the right coverage for a home —most likely a young consumer’s biggest investment— is simply a more important consideration than price.

Another intriguing point is that while respondents cited price in retrospect as the most influential factor in their decision to change personal-lines carriers, when asked prospectively what would influence them, price did not rank nearly as high. Among auto respondents, 58 percent said price would be either extremely (27 percent) or very (31 percent) influential when they next shop for a new policy, compared to about one-third each among homeowners.

Many consumers surveyed indicated they would respond favorably to multipolicy-discount offers. Looking back, four in 10 auto respondents cited the availability of an auto/homeowners’ insurance multipolicy discount as extremely (17 percent) or very (21 percent) influential in their last decision to change carriers. Among homeowners surveyed, the influence of multipolicy discounts was even stronger, with 58 percent citing this factor as extremely (28 percent) or very (30 percent) influential the last time they changed carriers.

Many auto respondents noted that the availability of telematics —technology to monitor driving experience in return for a potential break on the price of coverage— might prompt them to change carriers. Indeed, 3 in 10 said getting a discount for installing such a device would be extremely (12 percent) or very (17 percent) influential in their next purchase decision.

However, about 30 percent said they would not agree to install such a device, while another 30 percent said they would. But about 40 percent said their answer would depend on the premium discount being offered. Nearly half of those on the fence said they would expect more than a 20 percent discount to make such electronic monitoring worth their while, while another 22 percent would want a price break of 16-20 percent. About 1 in 5 would install the device for a potential discount of 11-15 percent. Only 1 in 10 would go along for a 6-10 percent discount, and only a handful (2 percent) would agree for less than 6 percent in savings. Age is a factor here as well, with the two older segments surveyed more likely to agree to have a monitoring device installed, while younger respondents were more leery of the idea.

The amount and type of coverage offered was the second most important decision point among respondents the last time they changed carriers, but not nearly as strong a consideration as price, with only 31 percent of auto respondents citing coverage as extremely influential (compared to 54 percent on price). The same pattern held for homeowners (24 percent on coverage versus 45 percent on price).

Reputation and trust were also key factors. Three out of four auto respondents said brand name, reputation for financial strength and the insurer’s rating were important, including 1 in 5 who considered these elements extremely influential when they last changed carriers. The numbers were similar for homeowners.

Brand-name recognition was a very important decision point among both auto and homeowner respondents. About 3 in 4 bought through an exclusive agent because they represented a widely known insurer, two-thirds bought direct because they prefer to do business with a widely known insurer, and about half would be more willing to buy direct if the insurer had a widely known brand.

The importance of brand recognition and perceptions of integrity spotlight the need for more proactive reputational risk-management efforts by insurers in general and the industry as a whole.

One particular area impacting brand reputation is claim service, which was a significant decision point among both samples queried, with about 1 in 3 respondents indicating that poor claims handling was extremely or very influential in their last decision to change carriers.

In terms of which individuals influence personal-lines buyers in their purchase decisions, respondents indicated they were swayed more by recommendations from family, friends and colleagues than from an agent. However, once again age plays a big part, as younger buyers indicated they were much more heavily influenced by their family and acquaintances.

A significant percentage (41 percent) indicated that an affiliation between their bank and their auto insurer would be extremely (18 percent) or very (23 percent) influential in their decision whether to buy coverage. The numbers were similar among homeowner respondents. However, an affiliation with the respondent’s employer did not score nearly as high.

There was a split when it came to the influence of an endorsement from a group or association to which the respondent belongs. This was cited as a major factor among auto-insurance buyers, with half of the respondents notin g t his as either extremely (17 percent) or very (33 percent) influential. Among homeowners, however, this factor was cited by fewer than half that number—20 percent overall, and only by 8 percent as extremely influential.

About 1 in 4 among both samples said a recommendation from their auto dealer or real estate agent would be influential in their insurance-purchase decision, including about 1 in 10 who said these referrals would be extremely influential.

Interestingly, while about 1 in 5 said advertising was either extremely (9 percent) or very (14 percent) influential in deciding where to buy auto insurance, more than half said ads were not very influential (17 percent) or not at all influential (35 percent). The numbers were similar among homeowner respondents.

When asked what would be their three most preferred ways to shop for a new auto policy, "checking a website offering quotes from multiple carriers" scored the biggest response, cited by 41 percent of those surveyed, including 15 percent who said this would be their most preferred channel (respondents could choose multiple options, in order of preference). Next came an independent agent representing multiple insurers at 36 percent (also including 15 percent as most preferred), followed by agents selling exclusively for one carrier at 31 percent (although this option drew the largest percentage of the top preferred choice at 17 percent).

Among homeowner respondents, about 40 percent chose either independent or exclusive agents among their Top 3, with 1 in 5 citing either one as their first choice. Checking a website offering quotes from multiple carriers made the Top 3 among 1 in 3 respondents but was cited as the first choice by only 13 percent.

These responses indicate that while price is a critical element for personal-lines buyers, there are other factors they consider when choosing a carrier, offering insurers a variety of decision points they can leverage to differentiate themselves and thereby retain more customers and boost new business.

Knowing How Much Coverage Is Right For You

When deciding how much insurance to buy, think about what assets you're protecting. When you purchased auto insurance, did you put a lot of thought into the limits you chose, or did you go with the minimum limits available without thinking beyond that? While choosing to purchase the minimum limits allowed in your state is perfectly legal, you should take a few minutes to determine whether those limits are enough. What is your financial situation? Can you afford to buy more than the minimum limits? How much can you afford to pay out of pocket if the need arises?

It's also important to consider your assets when deciding how much coverage is right for you. Your assets may include your house, vehicles, bank accounts, investments — even your wages. All of these can be fair game in a lawsuit if you don't have cash on hand to pay for damages you're liable for.

By definition, auto insurance protects you from accidents, theft and other unforeseen and unplanned circumstances. When you choose insurance, you're choosing protection so you don't have to pay for those damages out of pocket. That's why you should consider your assets to determine how much protection you need.

Why Do Your Assets Matter in Auto Insurance?

Though it doesn't happen often, if your auto insurance limits are exhausted in a covered loss, you personally could be responsible for any remaining bills that aren't paid by your insurance. If you don't have the money on hand to pay these bills, your assets could be at risk.

If your insurance limits are not sufficient to cover damage to property or personal injuries you're liable for, people involved in a claim with you can pursue you personally by filing a lawsuit for payment of their injuries and damages beyond what your insurance limits cover. If you lose the lawsuit, your assets could be at risk.

A lawsuit also can affect you in the long run if you're required to disclose it on a job or credit application, not to mention the possibility of garnished wages until you pay off the judgment.

What Events Can Exhaust Your Insurance Limits?

Several types of situations could exhaust your insurance limits — especially if you have the minimum required amounts. For instance, multiple-vehicle collisions or damage to several pieces of property can add up fast, and minimum limits may not cut it.

Consider the type of vehicle you may collide with in an accident, too. If you damage a luxury or high-end vehicle and you only have $10,000 in Property Damage coverage, your limits could be exhausted quicker.

Also, while Bodily Injury limits of $20,000/$40,000 may seem like a lot, they could be too little in accidents that involve multiple injuries. Medical bills, lost wages and other damages you're liable for can amount to more than those limits— and fast.

Higher Insurance Limits Can Lower Financial Fears

To protect yourself from heavy financial burdens, the best thing to do is consider your assets, your budget and your personal needs to determine the right amount of auto insurance for you. If you choose higher-than-minimum limits, you may spend slightly more up front, but this cost can pay off if you ever actually have to use your insurance coverage.

Actual-Cash Value vs. Replacement Cost

Standard replacement-cost provisions on Commercial Property forms often offer the insured the option to accept settlement on an actual-cash-value (ACV) basis, but the insured can later opt to receive the replacement-cost amount.

 

This can cause some confusion.

 

The policy usually provides a time period for notifying the carrier that the insured intends to make a claim for the replacement cost. The insured must actually make the repairs before the replacement-cost amount is paid. But the amount of time given to make the repairs is generally some variation on “as soon as reasonably possible” after the loss or damage.

 

How soon is that?

 

There is no absolute answer to how long it should take to make the repairs. The only set time limit is how long the insured has to notify the insurer of the replacement-cost claim. “Couch on Insurance 3d” states that the reasonable time “turns upon the circumstances of the case and is ordinarily a question for the jury.” So, the answer is a subjective one.

 

Sometimes what seems like a straightforward answer to a question leads to more complex issues. For example, an insured recently asked us the following regarding a claim on a Businessowners form:

“Our insured is considering accepting an ACV settlement on some of the soft-metal hail-damaged fascia and gutters on his building. If the policy continues as written with replacement cost and the building sustains damage that necessitates replacement of these same items, will the company, under the language of the policy, still be required to pay for the full replacement cost of the materials that have already been paid for under this prior loss?”

 

Our immediate response was that if the insured experiences a subsequent, separate loss, then the full replacement cost of the damaged property should be paid.

 

As we continued discussing the scenario, though, another issue arose that threatened to make the solution a little more complicated. The ISO Businessowners form contains the following language in the loss-payment section:

“You may make a claim for loss or damage covered by this insurance on an actual-cash-value basis instead of on a replacement-cost basis. In the event you elect to have loss or damage settled on an actual-cash-value basis, you may still make a claim on a replacement-cost basis if you notify us of your intent to do so within 180 days after the loss or damage.”

 

It seems pretty clear that, in the situation that our client presented, a separate loss the insured wants to adjust on a replacement-cost basis after the 180-day time limit outlined in the loss-payment section would receive the full replacement cost.

 

But what if the insured suffers hail damage and accepts an ACV settlement and thirty days later suffers hail damage again to the same property? If the insured submits a claim for replacement-cost coverage at that point, would the carrier consider it within the 180-day period and pay only the difference between the ACV settlement already received and the replacement cost?

 

Our first reaction is that our original answer to the question stands, regardless of the 180-day time period. However, we are curious if anyone has run into this situation—and if so, how it was handled? The fact that our client was concerned that the insured would not receive full replacement-cost coverage for a different loss implies that someone may have experienced similar situations before.

Letting Your Child Drive Someone Else's Car

Consider several factors before you allow your kids to get behind the wheel of someone else's car — or before someone gets behind the wheel of your car.

 

With school back in session, more students will be driving to and from school during the morning and afternoon hours. Parents know they can't monitor their kids at all times, but they can work with their kids to set ground rules before young drivers hit the road. One of these rules: What cars your kids can drive. Before you let your child drive someone else's car, or before someone outside the family drives your car, consider these factors.

 

Whose Insurance Applies?

If your child's friend drives your car and wrecks it, whose insurance covers the damages? The answer varies depending on the state you live in. In most states, insurance coverage follows the car— not the person driving it — in the event of an accident. However, if damages resulting from the accident exceed the amount allowed by your policy, then the driver's insurance may be considered as secondary or supplemental insurance to the insurance on the car.

 

For instance, let's say your policy has $10,000 in property damage liability coverage. Your daughter lets her friend drive your car to her mom's house 30 miles away. In the process, she causes a three-car collision, which results in $20,000 of damage to the other vehicles and property.

 

In most states, the insurance you have on your car will cover the damage, but since you only have $10,000 of coverage, the friend's insurance policy may kick in and pay for the remaining $10,000 of damage. However, in some states, you could personally be held responsible for any remaining damages beyond your insurance limits if your child's friend doesn't have car insurance, even though you or your child weren't driving at the time of the accident.

 

It's also possible that if your insurance company pays for damage in an accident, they may pursue the friend's insurance company to pay back the damage. They won't attempt to recover any money that you pay out of pocket, though. Again, this is both situational and based on your state's laws, so there's no single answer to the question. Your best option is to check with your insurance company to find out how insurance works in your state.

 

Before your child's friend drives your car, make sure you and your child think about the following:

· Whose insurance will pay for the damage?

· Who will ultimately be responsible for paying any out-of-pocket expenses?

· If your insurance pays, are you willin  to take the risk, including possibly paying more for insurance when your policy renews? If not, you may want to rethink letting anyone outside of your family drive your car.

Should You Update Your Policy?

If you know your child's friend drives your car regularly, it may be best to add that person to your auto insurance policy. Similarly, if your child regularly drives a roommate's vehicle, it may be best to add your child to the roommate's policy.

 

Often, insurance companies may require that you add a driver or car to your policy if the person or car isn't already on it. This helps ensure that proper coverage is afforded in most situations.

Knowing What Affects Your Rate

Several factors affect the price you pay for auto insurance — your age, driving record, type of vehicle, etc. — but did you know where you live also affects your premium?

It's true: Your location directly impacts your insurance rate. In fact, most insurance companies, including Progressive, consider where you live when they price policies.

Generally, city dwellers pay more for auto insurance than rural dwellers. Why? Because auto premiums are largely determined by factors related to the frequency and amount of a claim payout. Logically, cities have much denser populations than the country, so the risk for an accident is much higher in urban areas than it is in rural areas. Because of this, you most likely will pay more if you live in the city than if you live in the country.

Let's look at some of the locational factors that may come into play when determining how much you pay for auto insurance.

Frequency of Loss

As mentioned already, living in an area with a higher population increases the risk of an accident. Since cities have more people, they generally have more accidents, too. Therefore, if accidents happen more often in a specified area, the price for insurance will be higher since the chance for a claim is higher.

Density

Alongside frequency of loss comes density. The more people in a given area, the higher the risk of human error that can cause accidents. Fewer people travel country roads, so the accident risk factor is lower in rural areas. Hence, those who live in the country most likely will pay less for insurance than those in the city.

Safety Services

The availability of safety services influences locational considerations, too. Safety services include:

· Response times for police, fire departments and ambulances

· Road maintenance in inclement weather

· Enforcement patterns, such as how well laws are implemented by municipalities and law enforcement

· How roads are designed

· Number of intersections in a given area

 

Areas that have fast response times, aggressive enforcement of laws, well-designed roads and intersections, and other positive safety services will be considered safer areas than those whose safety services aren't as available.

Weather

If you live in an area where snow or other inclement weather is a common occurrence, your insurance premium may be higher. Treacherous road conditions can raise your chances of being involved in an accident while driving, which means the risk for a claim is higher.

Theft/Vandalism Rates

In areas that suffer from high crime rates, the risk of a vehicle theft or vandalism is greater. If break-ins occur frequently in your neighborhood, you can expect that you'll be paying more for insurance.

Litigation Climate

Another factor is the litigation climate in your area. Is there a higher propensity to sue after an accident? Insurance companies may look at this — and they may even examine the number of lawyers per square mile — to help gauge the litigation risk in your area.

Though many factors are considered when pricing insurance policies, location is an important one that can directly impact what you pay for auto insurance.

Does Your Friend's Auto Insurance Policy Cover You If You Borrow His Car?

Occasionally, you may need to borrow your friend's car to run an errand, go to work or complete some other task. When you do this, do you know if you're covered by your neighbor's auto insurance policy?

In most states, the answer to whether you're covered or not depends on how much you're using the vehicle and what you're using it for.

As always, auto policies may differ by state, so be sure to check your state's policy to see how you're covered.

For states that don't require you to use your own auto insurance policy, regardless of who's at fault for an accident, here are things to consider before you borrow a friend's car.

How Often Do You Use the Car?

If you only borrow your friend's car once a month, most likely your friend's policy will cover you when you drive the vehicle. An auto policy will define who it covers, which you can find in the definitions sections. In this instance, look for the definition of an "insured person" to see who's covered.

For example, an "insured person" may include "any person with respect to an accident arising out of that person's use of a covered auto with the permission of you or a relative." Under this definition, if someone else gives you permission to drive his vehicle, you're covered by his insurance policy — as long as your other actions with the vehicle also fall within policy allowances.

How Long Do You Borrow the Car?

Another consideration is how long you're borrowing your friend's car. If you use the car for a day or two, most likely that's not considered regular and frequent use. However, if you borrow your friend's car for several weeks, you may not be covered by his auto policy. In cases like this, you most likely would be considered a regular user, which means you should be added to your friend's insurance policy if you use his vehicle in this manner.

Why Are You Using the Car?

Finally, consider why you're using your friend's car. If you're using the vehicle to conduct business, like delivering pizza or hauling equipment for a landscaping business, you'll need to make sure the vehicle is covered under a commercial auto or business insurance policy. Personal auto policies typically don't cover anyone for conducting business with their vehicles.

Auto policies have long lists of actions and circumstances that aren't covered, so make sure you check to see what's covered before you drive your friend's vehicle.

Are Holiday Gifts Covered?

Ever wonder what would happen if your house were burglarized and all those beautifully wrapped Christmas gifts stolen? What if someone breaks into your car and steals the gifts you just purchased? Is there coverage for these types of situations?

Read these FAQs and find out:

Question: " I do a lot of shopping at Christmastime, and generally have many packages left in my car as I go from shop to shop. What about the gifts sitting in my car, do I have coverage if they are stolen?"

 

Answer: Presents stolen from your car are not covered by the typical auto insurance policy.

However, they may be covered subject to a deductible under your homeowners or renters policy-except when limited under the conditions mentioned above.

Question: "My house is filled with expensive gitst waiting to be opened. If my home is burglarized, damaged or destroyed, are all the gifts covered under my homeowner's policy?"

Answer: Not necessarily. There may be limitations on the amount of insurance provided by your homeowner's policy, especially for expensive gifts such as personal computers, silverware, stamp orcoin collections, fine art and jewlery.

There also may be limitations on types of loss or damage that are covered, such as breakage, theft or flood.

Question: "Can I get additional coverage for these gifts?"

Answer: Yes. Look into personal property endorsements and floaters. With an endorsement, you can specify a higher amount than under the standard homeowner's policy.

With a personal articles floater, items such as jewerly can be covered at full value, with no deductible, based on current appraisal or the bil of sale. Floaters also can cover additional causes of loss, such as dropping a new ring down the drain.

Question: "As a renter, are my gifts covered by renters insurance?"

Answer: Yes, but renters insurance also has limits on amount of coverage and types of loss covered.

Tenants also can purchase floaters and endorsements to provide insurance for theses uncovered or undercovered items.

Question: "Besides purchansing endorsements, how else can I protect my property?"
 

Answer: We suggest that you conduct a home inventory of all your possessions, and update this inventory whenever you make major purchases or receive gifts. 

 

Go over you insurance policy with our agency to be sure it provides coverage for the total value of items on your inventory. Keep receipts, serial numbers and dates of purchase of major items. Appraise jewelry and fine are at least every three years, because they may change in value over time.

Question: "What's involved in a home inventory?"

 

Answer: A few hours of your time and a working camera or video recorder.

 

First: List all of your major belongings and furnishings, with a brief description, any serial numbers and any receipts or appraisals.

 

Second: Back up this list with photos or a video. Photograph every wall of every room, and inside closets and cabinets. With a video, make comments for a verbal record as well as a visual one.

 

Third: Store everything in a safe place away from your home, such as a safe-deposit box, so they won't be damaged by the same event that might cause you to need them. Update this inventory whenever needed.

 

That's all it takes for the peace of mind that comes with knowing that you are adequately covered.