Obamacare Penalties May Be Delayed

The Obama administration may give Americans an extension on how long they can go without health insurance before facing a penalty under the Affordable Care Act, MarketWatch has learned.

The health care law requires most people to have health insurance by Jan. 1, 2014 or face a penalty, but the Administration may postpone when those penalties will go into effect. The law allows for “short coverage gaps” of up to three months before imposing the penalty, which is $95 or 1% of an individual’s income (whichever is greater) next year. Under the current rules, someone would have to be covered by March 31, an official with the Department of Health and Human Services confirmed, which is the final day that people will be able to purchase health insurance on the public exchanges, or marketplaces, created by the ACA.

But the Administration is currently working to revise its policy to ensure that people who wait till the last day in March to sign up will not face a penalty, the HHS official clarified. That means that people may go uninsured till April or May without paying a fine, as it takes up to two weeks to process health insurance applications, and new health policies take effect on the first day of each month. A last-minute March 31 application, for example, might be processed by mid-April for coverage starting May 1.
As the law stands now, in order to be covered by March 31, people would actually need to have insurance by March 1. And since it takes up to two weeks to process insurance applications, consumers would have to apply by Feb. 15, the Associated Press reported recently. (People must apply by Dec. 15 if they want coverage starting Jan. 1.)

The Administration, however, has recognized that there’s a “disconnect” between the actual and effective deadlines, as the deadline to get health insurance in time to comply with the ACA is currently six weeks earlier than the final deadline to buy it. Now, the Administration is working to make sure the two deadlines line up with each other, says the HHS official. An announcement about when it will enforce the penalty for being uninsured, and whether that penalty will be delayed beyond the de facto March 31 deadline, will come shortly. The insurance requirement still kicks in Jan. 1, and the enrollment period will close March 31 as planned, the official adds.

Read more at MARKET WATCH.

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