With health reform surpassing its reach over health insurance to cover tax filing and penalties, Obamacare has brought in new variables this year for a majority of American population. Health insurance coverage or tax penalties, Americans would either have to go with one of these two paths in 2014-2015. For people who did not buy health insurance by the end of Open Enrollment period on March 31, 2014, tax penalties would creep in during tax filing. If you missed the open enrollment period and still want to shield yourself from these tax penalties, you might cover yourself, literally and metaphorically, in the Special Enrollment Period (SEP).
So, what is this special enrollment period?
At the outset of Obamacare, Americans were given two opportunities to get health insurance, in open enrollment and in special enrollment. While open enrollment period was open for everyone, special enrollment period required certain conditions to preexist before people could apply for coverage under the special enrollment period. A special enrollment period, as defined by Obamacare, is a 60-day window which qualifies anyone with a change in life conditions expressed by pivotal life events to get health insurance through www.healthcare.gov without the limits of open enrollment period. This special enrollment period can kick in whenever there is a life-changing event, as defined by PPACA.
Do you qualify for special enrollment?
Qualification for special enrollment period is based solely on life events, which are listed in the Affordable Care Act. Out of the many available, the following are the common ones that make you eligible for application under the special enrollment period.
• Change in relationship status – Marriage or Divorce
• Addition of a new family member through birth or adoption
• Change in address or immigration status
• Loss of a dependent/family member
• Loss of health coverage through unemployment, maturing off parental plans, expiry of COBRA
• Increase in income that collectively affects your eligibility for tax credits or cost reductions
What to do if you are qualified?
While states might have some special requirements for processing applications under the special enrollment period, the basic requirements are common across the country. If you do qualify for the special enrollment period, the following checklist should prepare you for the process.
1) Be ready with your family’s basic information – Keep information like social security number, contact information, date of birth, name etc. ready for all family members who wish to apply for coverage. Other than personal information, household income and other such information will help you determine the subsidies you are eligible for and the plans you can buy.
2) Keep track of required documentation – While some states do not require you to submit documents proving the life event for special enrollment, other states might require you to submit proof before validating your special enrollment period. It would be better to know which documents would be needed in your state beforehand.
3) Plan Determination and Shopping – Once you are verified for special enrollment eligibility, you would be required to buy a plan from the health exchange. Knowing about the plans and their coverage beforehand is a better way to get health insurance that matches your needs. If you are on a private health insurance exchange, you can make use of the guided shopping experience that can help determine the best health plan that matches your family’s needs.
4) Get Started ASAP – Although the 60-day window provides you with a considerable margin, it is always better to start early as health insurance shopping might take up considerable time. The 60-day period begins from the date of the qualifying life event and you should apply for coverage as soon as you can.
Are there any alternatives to special enrollment if you don’t qualify?
In case you do not qualify for special enrollment, there are some alternatives that can help you save tax penalties or get health insurance, or both.
1) Look for alternate coverage options – Other than Obamacare insurance, you might be eligible for CHIP or Medicaid. Enrollment for them is open all year round.
2) Upcoming Open Enrollment Period – From November 2014 to February 2015, a new open enrollment period will begin on the health insurance marketplace. Instead of the special enrollment, you can very well make use of this period.
3) Grace Period for Tax Penalty Annulment – In case you remain uninsured for less than 3 months in the year, you will not be required to pay tax penalties. Therefore, if you are unable to enroll through special enrollment but still have the grace period left, you can very well wait for the coming open enrollment period without the risk of running a tax penalty.
4) Exemptions – Some life events might exempt you from the health insurance mandate of Obamacare. A detailed list is available on the federal marketplace website.