Source: Jen Wieczner
The Obama administration may give Americans extra time to sign up for health insurance under the Affordable Care Act, postponing when penalties for failing to buy coverage will go into effect, MarketWatch has learned.
The health care law requires most people to have health insurance by Jan. 1, 2014, but allows for “short coverage gaps” of up to three months before imposing the penalty, which is $95 or 1% of an individual’s income (whichever is greater) next year. That means someone must be covered by March 31, an official with the Department of Health and Human Services confirmed, which is the final day that people will be able to purchase health insurance on the public exchanges, or marketplaces, created by the ACA.
An Affordable Care Act outreach event in Los Angeles on Sept. 28, 2013.
But because the new health policies take effect on the first day of each month, in order to be covered by March 31, people would actually need to have insurance by March 1. And since it takes up to two weeks to process insurance applications, consumers would have to apply by Feb. 15, the Associated Press reported recently. (People must apply by Dec. 15 if they want coverage starting Jan. 1.)
The Administration, however, has recognized that there’s a “disconnect” between the actual and effective deadlines, as the deadline to get health insurance in time to comply with the ACA is currently six weeks earlier than the final deadline to buy it. Now, the Administration is working to revise its current policies making sure the two deadlines line up with each other, says the HHS official. Official word on a possible new deadline will come shortly, the official adds.
The administration declined to say whether people who purchase health coverage late in the enrollment period—say, on March 31—would be exempt from a penalty, even if their policy doesn’t kick in until April or May. Nor would the department give a specific date by which people would need to buy coverage to escape a fine. The HHS official, however, indicated that the administration may extend the deadline beyond Feb. 15: “We are exploring options currently and will issue guidance at a later date.”
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The potential extension comes as the federal health exchanges are under fire for ongoing technological problems that are making it difficult for some people to enroll. The Obama administration has so far resisted GOP pleas to delay the requirement that individuals purchase insurance next year, but has lately expressed frustration with the technical difficulties. Those problems, perhaps the elephant in the room during deadline discussions, may influence a decision to provide an enrollment grace period to avoid fines.
There is another sign that the penalty policy may be in flux: While HHS referred MarketWatch’s previous inquiries about the fine, and the deadline to avoid it, to the Treasury, a spokesperson there referred a request Wednesday back to HHS, suggesting that the health officials are now the ones writing new rules for the law.
It’s worth noting that the open enrollment period has already been extended to a full six months this year for the implementation of the ACA: In future years, people will have a few months in the fall to enroll in health insurance starting the following January.