Monday, May 5, 2014

The ACA deadline: What to do now that it's passed

March 31 was the last day to sign up for health insurance through the Affordable Care Act marketplace, and 7 million Americans enrolled in the health care exchange before the deadline. However, if you're one of the many who missed your window to sign up, and you don't have health insurance this year, it looks like you're going to have to pay a penalty next year come tax time.

But just because it's too late to sign up in "open enrollment" for 2014 doesn't mean you're stuck paying the penalty. There are still some solutions to your health insurance needs. Let's take a look at a few ways you can get covered post-deadline.

Qualifying life events

The ACA allows for "special enrollment" periods for people whose life circumstances change. These changes are "qualifying life events." Examples of these are having a child, marriage, divorce, moving out of state, or losing significant income. After one of these events occurs, you get 60 days to apply for coverage on the exchange. Although there are better options than quitting your job or getting divorced to get health care, if you're expecting one of these events, you could sign up for health care within 60 days of that event.

Applying for an extension
Like most government programs, the ACA includes a sort of human release valve. You can apply for an extension to open enrollment on the marketplace enrollment website. To qualify for an extension, you'll need to show good reason why you need one. One of the most common reasons for applying for an extension is technical difficulties. If you struggled with the website, you can note that on your application. Describe the attempts you made to enroll and the technical hurdles you encountered.

Remember, lying or intentionally submitting false information in an attestation is a crime. Not only could it put you in legal trouble, it could also be a reason to void your insurance coverage. While there's no harm in asking for an extension, you should be truthful about your reasons for the request.

Getting private insurance

Though the exchange deadline has past, you can still get insurance through a private company. Companies like Blue Cross Blue Shield are still open for business and they would be happy to sell you a plan. Calling the insurance company and signing up for a plan the old fashioned way is still an option. You won't get the benefit of seeing all the available plans next to each other, but you can still get health insurance.

The ACA mandates simplified insurance pricing, so you can still get access to all the same benefits at the same price. If you had thought that private insurance was too expensive, it might be time to take another look.

Paying the fine (or not)

The penalty for non-compliance is small. If you don't have health insurance, you can expect to pay either $95 or 1% of your income. The federal filing threshold for income was $10,000 last year and ought to be about the same next year. If you don't make more than that, you don't have to pay the fine. There is also a list of exemptions. If you belong to a recognized religious organization with objections to health insurance, you're exempt. Also, if the least expensive plan costs more than 8% of your household income, you won't be penalized.

The penalty is also pro-rated for the number of months you're uninsured. If you don't have insurance now, you can reduce the amount you're fined by starting insurance next month. The March 31 deadline isn't an all-or-nothing. You can get coverage for most of this year, and then plan to sign up on the exchange next year.

Even if the penalties are low and infrequently applied this year, expect them to become harsher in future years. In 2015, for example, the penalty will be $325 or 2% of your taxable income, and it will probably go up from there. There will be another open enrollment period starting in November, so start planning to get covered then.
  

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