Today is the day. Open enrollment for 2014 coverage ends today, March 31, 2014. If you haven’t enrolled by today, you likely can’t enroll in 2014 Marketplace coverage (exceptions apply after certain life events like having a baby or getting married).
Yes, there is a much-talked about extension in place. The extension isn’t unlimited, however, and is for folks who have started the signup process by today. To sign up, you can apply online or by phone (1.800.318.2596) – if you call, request the “special enrollment period.” There is no official word as to the actual closing date if you’ve starting an application but most likely it will be subject to a “reasonable” standard depending on your circumstances.
The next open enrollment period doesn’t open again until November 15, 2014. If you sign up during that enrollment period, your health insurance coverage would be effective for the year beginning January 1, 2015.
And here’s the part where the Internal Revenue Service comes into play: if you don’t have health coverage in 2014, you may have to pay an “individual shared responsibility payment.” For most taxpayers, the “individual shared responsibility payment” (fee? penalty? tax?) is equivalent to 1% of your income above the “filing threshold” or $95 per adult and $47.50 per child (up to $285 for a family), whichever is higher. You’ll pay the fee when you file your 2014 income taxes in 2015. You don’t have to pay the penalty if you are covered by a health care plan by March 31, 2014.
You’re considered covered if you have Medicare, Medicaid, CHIP, COBRA, retiree coverage, TRICARE, VA health coverage or private insurance that you purchased on your own or obtained through your employer.
But if you’re not covered, you’ll be subject to the penalty. And be careful: the penalty (fee? penalty? tax?) isn’t just a one time deal. You’ll pay every year that you don’t have coverage and yes, the fee increases each year. The flat fee for a family, for example, will increase to $325 in 2015 and $695 in 2016 (the flat fee percentage also increases to 2.5% of income in 2016).
Some people may qualify for an exemption to the “individual shared responsibility payment”/fee/penalty/tax. Generally, you may qualify for an exemption if:
- You’re uninsured for less than 3 months of the year;
- The lowest-priced coverage available to you would cost more than 8% of your household income;
- You don’t have to file a tax return because your income is too low (check out this post on filing requirements for the 2013 tax year);
- You’re a member of a federally recognized tribe or eligible for services through an Indian Health Services provider;
- You’re a member of a recognized health care sharing ministry;
- You’re a member of a recognized religious sect with religious objections to insurance, including Social Security and Medicare;
- You’re incarcerated, and not awaiting the disposition of charges against you; or
- You’re not lawfully present in the U.S.
Hardship exemptions also apply if you meet certain criteria such as if you are homeless, bankrupt, a victim of domestic violence or if you cannot find affordable coverage. For more on hardship exemptions, including how to apply for an exemption, check out the healthcare.gov web site.
It’s worth noting that if you qualify for an exemption because you didn’t need to file a tax return in 2014, you do not have to apply for an extension: you’re automatically exempt. This is true even if you didn’t need to file but did anyway in order to obtain a refund. It’s also important to remember that failing to file a tax return or owing taxes won’t disqualify you from obtaining coverage through the exchanges.
And finally, although the Affordable Care Act is inextricably linked to taxes – and even though it’s tax season right now – for most taxpayers, having coverage (or not) has no effect on your 2013 federal income tax return. No taxpayers are subject to the individual shared responsibility provision or are affected by the premium tax credit for the 2013 tax return (that’s the one that’s due by April 15, 2014). You can find out more about changes that might actually affect your 2013 tax return here.
All of this emphasis on enrollment appears to be working – somewhat. According to the government, more than 6 million Americans have signed up for coverage through the marketplaces since enrollment opened on October 1, 2013. Are you covered?
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Source: Forbes Business