With the Affordable Care Act (ACA) now in effect, the deadline to purchase health insurance for 2014 was March 31, 2014.
If you already have health insurance that meets the minimum essential health benefits standard under the ACA, you are all set for 2014. This includes individuals that gained health insurance through an employer, Medicaid, Medicare, or private insurance. But if you were uninsured and did not get health coverage by the March 31st deadline, what does this mean? And what are your options for purchasing health insurance? To break down what you need to know, here are the answers to your top health care questions.
What (if any) penalties will I face if I did not purchase health insurance by the March 31st deadline?
If you decided not to purchase health care coverage by this date, you may face a tax penalty on your 2014 tax return - the one you file in 2015. You will not incur a penalty if you had a lapse of coverage for up to three months. The tax penalty is also sometimes referred to as an "individual responsibility payment," "fee," or "fine."
The penalty is dependent on your family size and income, and for 2014, the annual one-time fee is $95 per adult, or 1% of your total income less the income tax filing threshold, depending on your income. If there are uninsured children in your family, the penalty adds $47.50 per child, with a family maximum of $285 for the year. For ongoing years, this penalty only increases, so it is important to understand your health care coverage options. In 2015, the penalty rises to $325 per person or 2% of your individual income less the income tax filing threshold, and $162.50 per child. For 2016, it's $695 per person, or 2.5% of your income less the income tax filing threshold, and $347.50 per child. Beyond that, the penalty is adjusted for inflation.
Are there special cases or exemptions from the penalty or purchasing health insurance under the Affordable Care Act?
Yes, and it is important to see if you qualify for an exemption under Obamacare to avoid the fine at tax time.
In some specific cases, you may be exempt from the penalty, including if you were uninsured for less than 3 months of the year. Other cases include if you qualify for a hardship exemption, are a member of a federally recognized tribe, or if you received a cancellation notice due to your health plan not meeting minimum requirements. See a full list of hardship exemptions, here.
Can I still sign up for health care coverage for 2014?
Open enrollment for 2014 is closed, but you may still have a chance to sign up for health insurance. If you have experienced a qualifying life event, you can apply for coverage within 60 days of this event, during a "special enrollment period." Marriage, divorce, having a child, moving, or loss of employer-sponsored health coverage can fall under a life event, so check your options to see if you can still shop for a plan in the online healthcare marketplace right now.
If you do not fall under any of these life events, then you will be able to purchase health insurance for 2015 in the Health Insurance Marketplace during a new open enrollment period beginning November 15, 2014.
What if I cannot afford health insurance?
For individuals who are seeking financial assistance to gain health insurance, there are options to help. During open enrollment, or for those who qualify in the special enrollment period, you may be eligible for a discount for your health care plan through a government subsidy or advanced premium tax credit when you purchase health insurance in the Health Insurance Marketplace. Your eligibility is generally determined by your household income and family size. Many individuals qualify for these subsidies, so it is important to see if you fit here. If your income is up to four times the poverty line, around $95,000 for a family of four, you may qualify to receive this discount to help to pay for premiums.
This subsidy can go directly to your health insurance provider, and will lower your monthly health insurance payments or premiums. To see if you qualify for a subsidy, and can apply during open enrollment, check out this health care eligibility calculator. Your total projected household income and family size is used when you apply for a subsidy, so be sure you have your household income information to calculate this number accurately. If you experience a change in either income or family size during the year you can let the Marketplace now you experienced a change or your subsidy will be adjusted at tax time.