10 Things You Need to Know About Obamacare’s March 31 Deadline

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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:

1. Deadline

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.

The Washington Post reports:

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

In order to comply with the Affordable Care Act, known as Obamacare, your insurance plan must meet the minimum essential coverage standards, Kaiser Health News said.

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.

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Comments & discussion

We welcome your opinions, but let’s keep it civil. Like many businesses, we reserve the right to refuse service to anyone. In our case, that means those who communicate by name-calling, racism, using words designed to hurt others or generally acting like an uninformed bully. Also, comments that include links to email addresses or commercial websites typically aren't posted. This isn't a place to advertise your business.

  • http://orlandoinsurancestore.com Michael Grace

    Good Article! Straightforward facts. No political spin. Well done.

    • http://www.moneytalksnews.com/ Stacy Johnson

      Thanks, Michael. We try!

  • Sherrie Christian

    My daughter is on our insurance plan. She will lose that insurance when she turns 26 this summer. Does she need to buy a plan now or can she wait until her current plan is about to expire?

    • Jason

      She can wait until she loses coverage under your insurance. Loss of insurance is a qualifying life event.

      • Sherrie Christian

        Thank you for taking the time to answer. I appreciate it.

        • Jason

          Be sure she applies soon enough. Medical insurance isn’t like car insurance, it doesn’t go into effect the same day. For example, I was looking at insurance for my wife to cover her while she changed jobs. She needed insurance April 1st but the deadline to apply for coverage starting April 1st was March 15th. On March 16th (the day I looked) the soonest the policy would go into effect was May 1st.

  • Nataliya Belorusov

    Does it mean, that people without Obamacare or other health insurance plan, would finally pay from their pocket for any medical services ? What about illegal people?

    • N_Jessen

      Only if they can afford it. Otherwise, it’ll be business as usual: If they manage to get the care they need and can’t pay, they will either negotiate their bill (when that’s an option) or end up with damaged credit. Either way, those expenses would presumably end up in the “un-reimbursed care” column and contribute to everyone else’s costs, as it has always been. At least with the ACA, there might be some savings from more people having access to good primary care, rather than running up huge hospital bills. But I’m not convinced it does much to address other sources of major healthcare cost inflation. The future should be interesting.

  • N_Jessen

    One thing I wonder is whether there is or will be any provision for someone to switch to another plan in a lower or equivalent tier later, if they find that their policy isn’t right for them in terms of coverage details or cost. Before the ACA, one could contact their individual insurer and make policy adjustments as long there’s a period of prior uninterrupted coverage.

  • mark

    7 million have signed up? really? how many have paid? how many are going on Medicaid? Can we subtract the 4 ot 5 million kicked off their health insurance plans? How many convicts have signed on? Have enough millenials signed on to pay for this crap sandwich? Wait until those who have jumped on board start to realize how long it takes to meet the deductibles or how much the copays add up to. You would think for a trillion dollars it might have been better just to create new pools and pay the premiums for the poor, the down-trodden, the lazy, the scammers and the rest of their ilk.

  • Chandra

    What if you have no coverage because you donot have income and your state didnot accept the extended Medicaid nor qualify for regular medicaid so what happen then you call but does not qualify for any free coverage?