Open enrollment ended yesterday, but there are widespread extensions in most exchanges through the end of this week or even the end of the month in some states. Connect for Health Colorado shared a tweet and facebook update Sunday evening, clarifying that for anyone who had begun the enrollment process but didn’t have it finished by the end of the day, the exchange would work with them to get the enrollment completed over the next few days.
All customers who have started the process today & were not able to complete, we will work with you over the next few days to finish up.
— C4HCO (@C4HCO) February 16, 2015
So that’s good news, and it’s similar to what’s going on in most states.
But for the last year, I’ve had a particular special enrollment period (SEP) on my list of things I’d create if I had a magic wand: I’d love to see a SEP for people who file their 2014 tax return after February 15 (ie, between now and April 15), and find out at that point that they owe a penalty for not having insurance in 2014. As it stand now, a person in that situation is particularly out of luck: Not only do they owe a penalty for 2014 (and it’s not just $95), but they’re also stuck with a penalty for all 12 months of 2015 unless they happen to have a qualifying event that triggers a SEP. Because outside of open enrollment, unless you have a SEP, you can’t get coverage until the following year. Open enrollment doesn’t start again until October, and that will be for coverage that begins in January 2016.
So people who find out at tax filing time that they owe a penalty for 2014 are going to be on track to owe one for 2015 too, with no option to rectify the situation. And the penalty for 2015 is higher:
$325 per uninsured adult (half that amount for a child) up to $975 for the household,
OR 2 percent of taxable income, whichever is greater.
But if we institute a SEP that covers the rest of the tax-filing season, those people would at least be able to avoid (or partially avoid) a penalty for 2015 by enrolling in health coverage after filing their 2014 tax return. Assuming the SEP would continue until at least April 15, people who enrolled by March 15 could have coverage effective April 1 and would be exempt from the penalty altogether for 2015, assuming they keep the coverage in force for the rest of the year (there’s no penalty for one short gap in coverage of up to three months, so if you get coverage effective April 1, you’re only uninsured for January, February and March, and thus would not face a penalty). People who enroll between March 16 and April 15 could have coverage effective May 1, which would mean that they’d have a four month gap in coverage. Without some sort of administrative relief, this would result in a prorated penalty being assessed for the first four months of the year, but that’s better than a penalty applied to all 12 months.
I’ve been discussing this issue with CMS/HHS lately, and although this was not among the SEPs that were proposed in the preliminary regulations that were issued in November (final regulations should be coming soon), it’s possible for them to issue SEPs without going through the normal channel of proposing regulations, soliciting comments, and then finalizing them (a process that normally takes two or three months).
I was thrilled to see that Washington’s state-run exchange issued exactly this sort of SEP today, and it runs through April 17. So here’s my official request to CMS/HHS and/or Connect for Health Colorado:
. @C4HCO Can we please create SEP 4 ppl who file taxes after 2/15 & find out they owe a 2014 penalty? Let's help them avoid a 2015 penalty.
— LouiseNorris (@LouiseNorris) February 17, 2015
Create a special enrollment period for people who file their taxes after February 15 and find out that they’re being assessed a penalty for not having coverage in 2014. The ACA has not been widely understood by the general public. Last fall, 89% of uninsured Americans didn’t know when open enrollment was scheduled to begin, and more than half of them didn’t know that the ACA provides subsidies to make coverage more affordable.
But although the ACA and exchanges are still new to many people, tax season is not. I’d bet that just about all Americans know that taxes have to be filed by April 15. And while there are probably quite a few people who are still unaware of the penalty for being uninsured (or at least the details of how it works, including the fact that it could be a lot more than $95 for last year, and far more than that for this year), those people are probably going to file taxes in the next several weeks. So instead of saddling them with another penalty for 2015 and no way around it, let’s give them an opportunity to enroll. After all, that’s what the ACA is all about: health insurance coverage for as many people as possible. It’s always been more about the carrots than the sticks, so let’s keep it that way.