The deadline for purchasing individual health insurance is quickly approaching, although some will get some extra time to complete their application. Here's what you need to know.
Just a handful of days remain to buy a health insurance plan under the Affordable Care Act. The March 31 deadline is less than a week away — although those who start but can’t complete their application on March 31 can ask for an extension.
If you have qualifying health insurance through your job, or through a government program like Medicare or Medicaid, or you have purchased an individual policy, you’re good to go. If you still haven’t signed up for coverage, and aren’t exempt, you need to act.
Here’s a video we produced last year to explain what will happen if you don’t get health insurance. Check it out, then read on.
Now, 10 things you need to know:
The deadline to enroll for individual health insurance is March 31. But don’t wait until the last minute, because it’s not a 10-minute process. The application and selecting a plan take some time to complete.
Unless you qualify for an exemption (more on that below), this deadline is for everyone, regardless of whether or not you’re eligible for a subsidy. (Note: Only those who buy health insurance through a government online marketplace can qualify for a subsidy to help make premiums more affordable.)
With few exceptions, you cannot buy an individual health insurance plan after March 31, period. For coverage starting in 2015, the open enrollment period begins Nov. 15.
2. Deadline grace period
If you’ve begun the application process to sign up for health insurance by the deadline and cannot complete it because of technical issues or other problems, you’ll be given a grace period to complete your application.
Federal officials confirmed Tuesday evening that all consumers who have begun to apply for coverage on HealthCare.gov, but who do not finish by Monday, will have until about mid-April to ask for an extension.
3. Special life circumstances
After the deadline, you won’t be able to buy individual health insurance at all unless you have a qualifying life event like divorce, unexpected job loss or adding a new member to the family.
4. Required coverage
5. Uninsured penalties
If you don’t get insurance by March 31, you will face a penalty of $95 per person (or $47.50 per child under age 18), or 1 percent of your yearly household modified adjusted gross income, whichever is greater. “Only the amount of income above the tax filing threshold, $10,150 for an individual, is used to calculate the penalty,” HealthCare.gov says.
“For example, for a single person whose MAGI is $35,000, the penalty would be $249 ($35,000 – $10,150 = $24,850 x 1 percent = $249),” Kaiser said.
Remember, $95 is the bare minimum penalty. You will likely have a bigger penalty if you don’t get coverage.
6. Penalties after 2014
The penalty for not having insurance will increase every year. In 2015 it’s 2 percent of your income or $325 per person. In 2016 you’ll pay $695 per person or 2.5 percent of your household income.
7. Child penalties
If you claim your child or children as dependents on your tax return, you will be responsible for any uninsured penalties they accrue.
8. I paid my penalty. Now what?
Take note that paying the penalty fee doesn’t provide you with insurance coverage. You’ll be responsible for footing the entire bill for any medical care you receive.
Thus, if you don’t get insurance and you rack up medical bills, you’re responsible for paying both the penalty fee as well as the entire cost of your medical bills. “They won’t be protected from the kind of very high medical bills that can sometimes lead to bankruptcy,” HealthCare.gov says.
9. Gap in coverage
If you enroll in a health insurance plan by the March 31 deadline, with coverage that begins May 1, you will not owe a penalty for the four preceding months, according to HealthCare.gov.
If you have a coverage gap after open enrollment ends on March 31, you will only be faced with a fine if the gap is more than three consecutive months, because it qualifies as a “short coverage gap exemption.”
But according to the Internal Revenue Service, “If you have more than one short coverage gap during a year, the short coverage gap exemption only applies to the first.”
10. Any insurance exemptions?
You may be exempt from health care coverage if you meet one of several conditions listed on the exemptions page at HealthCare.gov, including, but not limited to: income below the federal income tax filing threshold, you’re a member of a federally recognized tribe, or you’re a member of a recognized religious sect with religious objections to insurance.
Examples of hardship exemptions include: recent eviction or foreclosure, recent bankruptcy, you’re in jail, or you recently experienced domestic violence.
If you’re uninsured, have you purchased health insurance yet? Share your experiences below or on our Facebook page.