The clock is ticking on the individual health insurance open enrollment period for 2014, which is scheduled to end on March 31, 2014.
Unlike many of the other deadlines established under “Obamacare,” this one will not be extended or delayed. Health and Human Services Secretary Kathleen Sebelius told Congress on March 12 that the Obama administration would not extend the deadline for people to sign up for health insurance or delay the requirement for most Americans to have coverage.
This means that, if you haven’t already done so, you have only until the end of March to obtain minimally adequate coverage for yourself and your dependents, either through your state health insurance exchange, directly from a private health insurer, or anywhere else you can get it. However, if you qualify for “Obamacare” health insurance tax subsidies for 2014, you must obtain your coverage through your state exchange to receive them (you’ll qualify for such subsidies only if your family income is no more than four times the federal poverty level).
If you don’t obtain coverage by March 31, 2014, you may have to pay a penalty to the IRS equal to the greater of $95 or 1 percent of your 2014 adjusted gross income. The IRS will calculate the penalty and automatically deduct it from your tax refund for 2014, if any. This is the only mechanism the IRS has to enforce the penalty, which is scheduled to go up in future years.
What happens if, after March 31, 2014, you decide you made a mistake not obtaining coverage and want to purchase it for the remainder of 2014? You could be well out of luck — that is, you may be unable to purchase individual nongroup health insurance coverage for the rest of 2014, either through your state exchange or directly in the open market from a private insurer. This means you’ll have to bear all of your health care costs for 2014 out of your own pocket. You’ll have to wait until the next open enrollment period to obtain individual coverage starting in 2015. The open enrollment period for 2015 coverage is scheduled to run from Nov. 15, 2014, through Feb. 15, 2015.
After the 2014 open enrollment period ends on March 31, 2014, individual nongroup health insurance coverage will be available for purchase only for individuals who have a “qualifying life event” during the remainder of the year. This includes:
- losing your existing health insurance coverage — for example, because you (or your spouse) quit your job, were laid off, or your work hours were reduced below the level required for you (or your spouse) to qualify for employer-provided coverage.
- getting married, divorced or legally separated.
- giving birth or adopting a child.
- losing your coverage because you moved to another state or a part of the same state outside of your health plan service area.
- losing your eligibility to receive coverage as someone else’s dependent — for example, you turn 26 and are no longer eligible for coverage through your parents’ plan.
- you timely enrolled in coverage through your state exchange, and income increases or decreases enough to change your eligibility for subsidies for 2014.
- becoming a U.S. citizen.
Once a qualifying life event occurs, you have 60 days to obtain individual coverage, either through your state health insurance exchange or private insurers. This period is call your “special enrollment opportunity.”
Note carefully that the following are not qualifying life events:
- getting sick.
- getting pregnant.
- losing your coverage because you didn’t pay your premiums.
- voluntarily quitting your existing health coverage.
Thus, for example, you can’t go without coverage past March 31, 2014, and then decide you want to enroll because you get sick (or get pregnant — but you and your family may obtain coverage after giving birth).
You can find more information on the Affordable Care Act and links to your state health exchange at www.healthcare.gov.
Stephen Fishman is a tax expert, attorney and author who has published 20 books, including “The Real Estate Agent’s Tax Deduction Guide,” “Working for Yourself,” “Deduct It!” and “Working with Independent Contractors.” His website can be found at fishmanlawandtaxfiles.com.