Approaching Deadline to Individual Penalty

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Last summer President Obama delayed the penalty provisions for employers with 50 or more full time equivalent employees until 2015, and in early February of 2014 the administration provided further relief for employers, postponing some penalties for some employers yet again.  The ACA mandate that US citizens and residents have health insurance coverage or pay a penalty remains in place for 2014 however, and an important deadline for compliance is quickly approaching.

There are a number of ways in which an individual can comply with the requirement that he or she have health insurance.  A person can maintain compliant coverage through his employer, or he can have Medicare, Medicaid, or Veteran’s Insurance or a similar public benefit. He can also purchase individual health insurance either through a government exchange or outside of an exchange; see IRS’ frequently asked questions.   Individuals who do not have health insurance by March 31, 2014 will likely be subject to the penalty, and may be unable to obtain insurance coverage until 2015 without a qualifying event. The penalty for not having health insurance in 2014 is the greater of $95 or 1% of adjusted household income, and those penalties are scheduled to rise in 2015 and 2016 at which time they are the greater of $695 or 2.5% of adjusted household income. 

Unless we have further changes in the law, the open enrollment period to apply for health insurance coverage for 2015 is limited to a two month period, beginning in mid-November and extending through January. The government created a longer open enrollment period for 2014 in part because of the challenges people faced in working with the government exchanges.

Business Benefits Insurance Solutions associates are happy to assist people with their individual health insurance decision and purchase. It is quite possible that the exchanges and the carriers may experience volume related challenges similar to those experienced when they opened in October and again as the January 1, 2014 deadline loomed. We encourage people who wish to explore their options in the individual marketplace to do so soon rather than to wait until the end of March.