CMS Adds Special Enrollment Period to Help Consumers Avoid Tax Penalty

Consumers would have to show they only learned about the tax penalty when they went to file their tax returns, according to CMS' Andrew Slavitt. Under the Affordable Care Act, penalties for not having coverage for 2015 are $325 or 2% of household income.

Consumers who failed to sign up for healthcare coverage in time to avoid increased tax penalties under the Affordable Care Act (ACA) will have one more opportunity to get coverage, CMS announced Friday.

The special enrollment period will open March 15 and close April 30, more than 2 weeks after the date that most taxpayers must file returns. To qualify, consumers will need to attest that they faced a penalty for not having coverage in 2014, cannot currently enroll in a plan on Healthcare.gov, and that they only learned about the penalty when they filed income tax forms. CMS officials did not know how many taxpayers would be affected.

While the penalties for not having coverage have been part of the ACA since the outset, Americans filing tax returns in the next few weeks may be learning about them for the first time. For 2015, the penalty is $325 per uninsured person or 2% of household income over the filing threshold. In 2014, the penalty was $95 per uninsured person or 1% of household income over the filing threshold.

Obama Administration projections estimate that 6 million Americans may face a penalty for not having coverage in 2014; however, most will not end up paying because they qualify for an exemption, which can include inability to afford coverage or a hardship.

Published reports in recent weeks have detailed Enroll America volunteers assisting consumers who fall into the “coverage gap” with exemption forms. These people earn between 100% and 138% of the federal poverty level and would be eligible for coverage under Medicaid expansion, but they live in states that chose not to expand Medicaid. Thus, they do not earn enough to purchase coverage on the federal exchange.

Earlier this week, HHS has already announced a special enrollment period ending Feb. 22 for people who had an in-process application on Feb. 15. Affected consumers include those who were on the phone with a call center but were unable to complete the application process before the deadline. Another, untallied group, includes those who had technical issues with HealthCare.gov and were unable to complete their enrollment.

President Obama and HHS Secretary Sylvia Mathew Burwell announced earlier this week that 11.4 million consumers selected or were automatically re-enrolled into plans. That includes 8.6 million with plans on HealthCare.gov and about 2.8 million people who obtained coverage from a state-based marketplace. In late 2014, HHS set an enrollment goal of just over 9 million.