ACA Enrollment Period Ends–Who Will Pay A Health Insurance Penalty?

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March 31st, 2014 is a date locked into America’s heads since last October. Why? That day marks the end of the enrollment period for buying a New York Health Insurance exchange plan. For those Americans who miss the cut-off date, there are penalties and there are exceptions.

What is the enrollment period?

The open enrollment period is a time for Americans to select a health plan best fit for them, or drop a health plan that did not work for them, or make adjustments to their mandatory health insurance plan. The first enrollment period runs from October 1st, 2013 to March 31st, 2014.

Since a policy does not take effect until a month following purchase, all plans must be purchased by March 31st to go into effect before the exchange closes. Policies purchased after March 31st  will not meet the deadline.

Consequences for missing the enrollment deadline. Paying the Health Insurance Penalty

The health insurance penalty for missing the cut-off period is a fine of $95, or, 1 percent of your income after taxes–whichever is greater. However, if you repeatedly miss the cut-off deadline for the enrollment period in 2015; you will be charged again, this time more ruthlessly with a fine of $325 dollars, or 2 percent of your income after taxes. Once again, whichever number is pricier, that sum will be taken. And if you still are not looking at the cut-offs for enrollment periods and miss it in 2016, you will be charged a penalty of $695, or a hefty 2.5 percent of your income after taxes. Whichever price has a greater number will be taken. By 2017, the yearly penalty number will be adjusted based on inflation.

One of the downsides in missing the cut-off date for enrolling in an exchange plan is no longer receiving a government subsidy. Depending on where your income level falls according to the Federal Poverty Line (FPL), if your job provides health insurance, or if you are enrolled in COBRA; the government may provide a subsidy. However, if you missed the cut-off date today, no longer are you eligible for a reduction, thus, you are losing money in the long-run. For those whose income after taxes falls between 133-400 percent of the Federal Poverty Line.

Exceptions for the enrollment period deadline

There are exceptions for those who missed the deadline and urgently need an exchange plan. These exceptions are called qualifying events.

They include:

• Tying the knot (marriage)

• losing a job, thus resulting in lack of health insurance

• adopting a baby

• switching from qualifying or no longer qualifying for subsidies

• moving to a new coverage area

If you have forgotten to enroll and buy health insurance this year, there are a few options available besides exchange plans. However, these options tend to be more costly and provide more limited coverage. If you are looking to purchase, please click here for more details.

Thinking Ahead

As a forewarning, the next enrollment period begins on November 15th, 2014 and ends on February 15th, 2015, and if you wish for your insurance to begin in January 2015, remind yourself to enroll during December 2014.