Obamacare extension offers relief for penalty payers

By | February 21, 2015

If you’ve been stressing out about the end of Obamacare’s open enrollment period – and a possible Obamacare penalty for missing the enrollment deadline – you may have gotten some welcome “wiggle room” from the federal government in the form of an additional 47 days to enroll.

Exchanges in every state have already designated deadline extensions for consumers who had started to enroll but were unable to complete their application before the February 15 deadline. But today, the federal government announced a special enrollment period – from March 15 to April 30 – for people in 37 states who have found out (or will find out) that they’ll owe a penalty for 2014 when they file their tax returns.

Who gets the extension?

In order to be eligible for the special enrollment period, you must:

  • not already have an existing exchange plan for 2015. (Plan changes will not be permitted during this special enrollment period.)
  • attest that you paid the 2014 penalty when you filed your taxes, AND that you didn’t know about the penalty until you filed your 2014 tax return.

This special open enrollment period ends on April 30 at 11:59 p.m. Eastern Time.

  • Enrollments submitted on March 15 will have coverage effective April 1.
  • Enrollments submitted between March 16 and April 15 will have coverage effective May 1.
  • Enrollments submitted between April 16 and April 30 will have coverage effective June 1.

Prorated penalty possible

A prorated penalty for not having coverage in 2015 will still apply to people who have more than a three-month gap in coverage for 2015. So if you enroll on March 15, have coverage effective April 1, and maintain it for the rest of the year, you won’t be subject to a penalty for 2015.

If you enroll between March 16 and April 30, you’ll owe a prorated 2015 penalty for the first four or five months of the year. But because of this special enrollment period, you’ll be able to avoid paying a penalty for the full year.

40 states actually get extension

The special enrollment period that CMS created is only valid in the 37 states that use the federally facilitated marketplace. But prior to the CMS announcement, three state-run exchanges (Washington, Minnesota, and Vermont) had already implemented similar special enrollment periods. It’s likely that most of the remaining state-run exchanges will follow suit soon.

We’ll keep this page and our general open enrollment extension page updated, so check back over the next few days if your state hasn’t yet announced a special enrollment period.

 

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