Obamacare Q&A: Health insurance deadlines and taxes

There are two weeks to go in the first-ever open enrollment period for buying private insurance coverage as part of the federal health law commonly known as Obamacare. After March 31, Connecticut residents won’t be able to buy individual-market health plans for this year, unless they go through a change in circumstances like losing a job or getting divorced (and no, getting sick doesn’t count).

Here’s what you need to know about the deadline, how you can qualify for a special enrollment period if something changes and you need coverage after March 31, the penalty for not having insurance and how to get an exemption from the individual mandate.

If you have a question about Obamacare, email Mirror health reporter Arielle Levin Becker at alevinbecker@ctmirror.org.

What is the March 31 deadline for?

March 31 is the last day to buy individual-market private insurance in Connecticut for 2014. That applies to health plans sold by the health exchange and those sold outside the exchange.

(Because of inaccurate information provided by the companies, last week’s Q&A incorrectly said that at least one company would continue selling insurance to individuals after March 31. In fact, none will, unless you have a change in circumstances that qualifies you to buy insurance outside the open enrollment period.)

But the deadline does not apply to small-group insurance plans. It also doesn’t apply to people who qualify for Medicaid, who can sign up at any time during the year.

What if I lose my job after March 31? Would I be unable to buy insurance?

No, you would be able to buy insurance because losing your job is considered a “qualifying life event” that allows you to sign up for insurance even if the open enrollment period for the year has ended. Other qualifying events include getting married or divorced, having a baby, moving to another state or, in some cases, changes in income.

People who have a qualifying event and want to buy insurance can request a “special enrollment period” to sign up for coverage. That would give them 60 days from the date of the qualifying event to buy insurance.

How do you get a special enrollment period to sign up for coverage after March 31?

The easiest way for people who want to buy coverage through the exchange to request a special enrollment period is to use the Access Health call center (1-855-805-4325), said Chad Brooker, policy and legal analyst at Access Health.

You will probably be asked to submit documentation to prove why you qualify for the enrollment exception, such as a letter confirming that your job no longer provides health care or a letter saying you no longer qualify for Medicaid.

People will also still be able to browse health plans through the exchange’s website after March 31, Brooker said.

People who qualify for special enrollment periods can also purchase insurance sold outside the exchange.

I’m working on my tax returns now. Do I need to do anything to prove that I have insurance?

No. The individual mandate didn’t take effect until this year so your taxes for 2013 are not affected.

I’m thinking of not getting insurance and paying the penalty. What do I need to know?

The penalty for 2014 is 1 percent of your income above the tax return threshold or $95, whichever is higher. (For most people, it will be 1 percent.) The penalty will increase in subsequent years.

If you have coverage for part of the year, you’ll owe a prorated penalty. It’s calculated based on the number of months you didn’t have coverage, with each month costing you 1/12 of the full-year penalty. So if you’re uninsured for six months, you’d owe half of 1 percent of your income.

If you’re uninsured for fewer than three consecutive months, you won’t have to pay a penalty.

Another thing to note: According to federal regulations, if you have insurance for at least one day in a given month, you are considered to be insured for that full month and wouldn’t owe a penalty for that month.

What happens if you don’t pay your penalty? The federal government can’t issue a lien, but it can deduct the amount from any refund you’re owed, according to the IRS.

I think I’m exempt from the individual mandate. How do I get out of paying the penalty for not having insurance?

In most cases, you’ll have to apply for an exemption through Connecticut’s exchange. (Brooker said Connecticut is the only state handling its own exemption process. The other states are relying on the federal government to do it.)

To apply for an exemption, you’ll have to fill out this form. (You can find it on the Access Health website, www.accesshealth.com, by clicking the “Can I opt out?” tab on the bottom right corner of the homepage.)

A team at the exchange will review the submitted forms and any supporting documents people include and determine if they meet the requirements for an exemption. For those who qualify, the team will also determine whether they will be granted an exemption for the full year or for part of the year.

One group that doesn’t need to apply for an exemption: People who don’t have enough income to be required to file a federal income tax return. The Internal Revenue Service has said people in that category, who are not subject to the individual mandate, don’t have to take any action to get an exemption.

There are several circumstances in which someone could be exempt from the individual mandate. They are:

  • If you’re uninsured for fewer than three months of the year;
  • If coverage is unaffordable to you — that is, if the cheapest option available would cost more than 8 percent of your household income;
  • If your income is too low for you to be required to file a tax return (in Connecticut, many people in this category would qualify for Medicaid);
  • Belonging to a federally recognized tribe;
  • Being a member of a recognized health care sharing ministry;
  • Being a member of a recognized religious sect with religious objections to insurance, including Social Security and Medicare;
  • If you’re incarcerated;
  • If you’re not in the country legally.

In addition, people could potentially qualify for a “hardship exemption” from the mandate if any of the following affected their ability to buy health insurance:

  • Being homeless;
  • Being evicted in the past six months or facing eviction or foreclosure;
  • Receiving a shutoff notice from a utility company;
  • Recently experiencing domestic violence;
  • Recently experiencing the death of a close family member;
  • Experiencing a fire, flood or other disaster that caused substantial damage to the person’s property;
  • Filing for bankruptcy in the past six months;
  • Having medical expenses they couldn’t pay in the past two years;
  • Having unexpected additional expenses as a result of caring for an ill, disabled or aging family member;
  • Having a child whom they will claim as a tax dependent who has been denied Medicaid and CHIP coverage and if a court order requires another person to provide medical support to the child; this exemption means the person would not have to pay a penalty on behalf of the child if he or she is uninsured;
  • Being ineligible for Medicaid because their state didn’t expand the program (this does not apply in Connecticut, which did expand its Medicaid program, known as HUSKY);
  • Being eligible for enrollment in private insurance through the exchange;
  • If, because of an eligibility appeals decision, they are eligible for enrollment in a private insurance plan through the exchange for a time when they weren’t enrolled in one;
  • If their individual-market insurance plan was canceled and they think other plans sold through the exchange are unaffordable;
  • If they experienced another hardship in obtaining insurance.

 

 

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