Confusion about Obamacare requirements and penalties pushed the administration to open a special health insurance enrollment period, giving Americans extra time to avoid tax penalties next year.
It’s now or never. Americans have more time to avoid 2015
tax penalties for having no health insurance, thanks to an additional enrollment
period to purchase insurance that’s open through April 30.
The federal government opened a special Affordable Care Act (ACA)
enrollment period for 2015 in addition to the regular open enrollment period,
which ended on Feb. 15, to reduce the number of people who will be forced to
pay tax penalties next year. The administration projects nearly 6 million
Americans are expected to face Obamacare penalties this
year, with many just now learning about the penalty.
The 2014 tax filing is the first to include the ACA’s
penalty for having no health insurance: $95 or 1 percent of annual household
income, whichever is greater. Next year, the no-insurance penalty will increase
significantly to $325 or 2 percent of annual household income, whichever is
greater.
Because of the rocky rollout, many Americans remain confused
or uninformed about the ACA penalties and when they go into effect. In fact, 20
percent think the penalty goes into effect next year; 16 percent don’t know
when the penalties go into effect; and 11 percent believe it was rolled out
last year, according to a March Kaiser Family Foundation poll.
A McKinsey study also found that 41 percent of uninsured Americans are unaware
of the tax penalty altogether.
“The additional special enrollment period demonstrates that
additional education and outreach are needed to inform Americans of their
Obamacare requirements,” says Kevin Kuhlman, director of legislative affairs at
NFIB. “The special period will not absolve anyone of their 2014 individual
mandate tax, but it will provide a limited opportunity for Americans to avoid
the 2015 tax.”
Todd Page, senior vice president of sales for AHiX Marketplace, a division of JLBG Health,
explains the key details of the special enrollment period. AHiX administers NFIB’s Health Insurance Exchange. Here’s
what Page says you need to know:
- There are two main restrictions: You cannot
already be enrolled in an ACA plan, and you must attest you didn’t know you had
to buy health insurance until you filed your 2014 taxes, after regular
enrollment ended. - This will be the last opportunity for uninsured
people to sign up for 2015 health coverage. - All plans are still ACA-compliant, and you will
not have to pay the 2015 tax penalty if you purchase one. - All pre-existing conditions are covered.
- No medical questions will be asked.
“Call us or go online,
and we can get you enrolled a lot easier than the government can,” Page says.
What About Subsidies?
Another issue muddying the waters is the uncertainty
surrounding subsidies offered via the federal health insurance exchange. While some
states established their own insurance exchanges, 37 states opted to use
HealthCare.gov. There is a pending U.S. Supreme Court case (King v. Burwell) concerning language in
the legislation that says subsidies are available to those who bought their
insurance on an exchange established by the federal government. Eliminating
these subsidies could affect approximately 87 percent of the 8.8 million people
who have signed up for health insurance on the federal exchange and are
receiving a subsidy for their premiums.
“The
pending Supreme Court case may impact the future of major portions of the law
and may require Congress to focus on providing relief from some of the most
onerous requirements, but it would be unwise to wait for the decision before
attempting to enroll,” Kuhlman says. “The administration has said this special
enrollment will be the last opportunity to enroll in 2015.”
