"ObamaCare" Open Enrollment Period Passes: What This Means For Consumers

by LeClairRyan

The Affordable Care Act (the health care reform law also known as “ObamaCare”) created a nationwide open enrollment period to purchase individual and family health insurance. For fully-reformed, 2014 health insurance plans, open enrollment began on October 1, 2013 and ended on March 31, 2014. What does this mean for consumers who missed the March 31 enrollment deadline?

Will There Be An Extension of The Enrollment Period?
The federal government has indicated that the open enrollment period will not be extended. It has not indicated that any additional open enrollment opportunities will be established for 2014, although some consumers who started applications prior to the end of open enrollment may be afforded more time to finish the applications if they were unable to finish due to certain system errors on the federal marketplace. Health insurers may create additional open enrollment periods for their customers, or even additional special enrollment periods for additional “qualifying life events.” Contact your state’s department of insurance or a licensed agent to learn more about state-specific open and special enrollment opportunities.

Will You Be Penalized for Missing Open Enrollment?
You may be subject to a tax penalty on your 2014 federal taxes if you did not obtain and keep minimum essential coverage without a gap of three consecutive months or more during the year. In other words, if you have been uninsured since January 1 and you missed the March 31 open enrollment deadline, you may be subject to a tax penalty.

The annual tax penalty in 2014 is $95 per adult and $47.50 per child in your household (up to a maximum of $285) or one percent of your annual income, whichever is greater. Under the “one percent rule,” an individual’s income above $10,150 is used to calculate the penalty. Accordingly, the maximum potential penalty could be thousands of dollars, depending on your income. The penalty will increase in future years.

Can You Still Obtain Insurance Outside of the Open Enrollment Period?
You cannot purchase individual or family health insurance through a government exchange outside of open enrollment unless you experience a “qualifying life event” or some other exceptional circumstance defined by the law. Examples of “qualifying life events” include marriage, the birth or adoption of a child, permanently moving to a new city or state, or loss of coverage due to divorce, loss of a job, or loss of coverage under a parent’s health plan when an adult child turns 26. Other circumstances may constitute a “qualifying life event.” If you experience any of these, you may trigger a “special enrollment period” allowing you to purchase coverage on your own outside of open enrollment.

You will have 60 days after the event to enroll, and may do so through a licensed online health insurance agent or through your state’s government-run health insurance exchange. You will likely need to provide proof that you have experienced a qualifying life event, but this may depend on the rules in your state or the policies of the individual health insurance company whose plan you select. If you meet the criteria for subsidy eligibility and also experience a qualifying life event, you may be able to obtain government subsidies when purchasing coverage during your special enrollment period.

Though one typically cannot purchase health reform-compliant major medical individual or family health insurance plans from any source outside of the open enrollment period and without experiencing a qualifying life event, other products may be available that can offer some level of protection. These include short-term health insurance plans, accident insurance, critical illness insurance and dental or vision insurance. These options, however, will not meet your coverage requirements under the Affordable Care Act and you may still be subject to a tax penalty for failing to obtain or keep essential coverage. While insurers cannot decline coverage under a major medical health insurance plan to anyone for pre-existing medical conditions, it may be possible for an insurer to decline coverage for alternate forms of coverage based on your personal medical history.

When Is the Next Open Enrollment Period?
The next open enrollment period begins on November 15, 2014 and is scheduled to continue through February 15, 2015. If you wait until November 15 to apply for coverage, however, please be aware that your coverage under a new plan will not begin any earlier than January 1, 2015.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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