So you file your income tax return, and find you owe Uncle Sam $500—not for taxes, but for not having health insurance last year. The penalty is $95 per adult, or 1 percent of income—whichever is greater. Fifty-thousand dollars of income works out to a $500 penalty.
As many as 6 million individuals and families may have to pay this year. If you don’t have insurance for 2015, your penalty next year will rise to $325 per adult, or 2 percent of income, whichever is greater. But the enrollment period ended Feb. 15.
The Obama Administration has announced a special enrollment period for those who didn’t realize the consequences of not signing up. It gives taxpayers who face penalties for going without health insurance last year one last chance to change course, and avoid the larger penalty next year.
The special enrollment period is only available in states — like Kansas and Missouri — that rely on the federal marketplace (or FFM, for Federally Facilitated Marketplace). To be eligible, applicants must show that they:
- Currently are not enrolled in coverage through the FFM for 2015;
- Attest that when they filed their 2014 tax return they paid the fee for not having health coverage in 2014; and
- Attest that they first became aware of, or understood the implications of, the Shared Responsibility Payment after the end of open enrollment – Feb. 15, 2015 – in connection with preparing their 2014 taxes.
The Kansas Association for the Medically Underserved (KAMU) has advised navigators at safety net clinics around the state to offer to work with tax preparers in their communities.
“Let them know they’re out there, and what they can do to help get people enrolled, so that they don’t face that penalty,” said Katrina McGivern, KAMU’s policy and public affairs director.
McGivern said there’s no need to hire additional navigators, but it is important to make sure tax preparers know where to send customers who want to take advantage of the additional sign-up opportunity.
The special enrollment period will run from March 15 through April 30. If a consumer enrolls in coverage before the 15th of the month, coverage will be effective on the first day of the following month.
This year’s tax season is the first time individuals and families will be asked to provide basic information regarding their health coverage on their tax returns. Individuals who could not afford coverage or met other conditions may be eligible to receive an exemption for 2014. To help consumers who did not have insurance last year determine if they qualify for an exemption, the government also launched a health coverage tax exemption tool today on HealthCare.gov and CuidadodeSalud.gov.
"We recognize that this is the first tax filing season where consumers may have to pay a fee or claim an exemption for not having health insurance coverage," said Marilyn Tavenner, administrator of the Centers for Medicare and Medicaid Services (CMS). “Our priority is to make sure consumers understand the new requirement to enroll in health coverage and to provide those who were not aware or did not understand the requirement with an opportunity to enroll in affordable coverage this year.”
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The remaining taxpayers – about one-quarter – will take different steps. It is expected that 10 to 20 percent of taxpayers who were uninsured for all or part of 2014 will qualify for an exemption from the requirement to have coverage. A much smaller fraction of taxpayers, an estimated 2 to 4 percent, will pay a fee because they made a choice to not obtain coverage and are not eligible for an exemption.
Consumers who have questions about their taxes, need to download forms or want to learn more about the fee for not having insurance, can find information and resources at www.HealthCare.gov/Taxes or www.IRS.gov. Consumers can also call the Marketplace Call Center at 1-800-318-2596. Consumers who need assistance filing their taxes can visit IRS.gov/VITA or IRS.gov/freefile
Consumers seeking to take advantage of the special enrollment period can find out if they are eligible by visiting https://www.healthcare.gov/get-coverage Consumers can find local help at: Localhelp.healthcare.gov or call the Federally Facilitated Marketplace Call Center at 1-800-318-2596. TTY users should call 1-855-889-4325. Assistance is available in 150 languages. The call is free.
Bryan Thompson is a reporter for KHI News Service in Topeka, a partner in the Heartland Health Monitor team.
