The end of the month marks an important deadline for the Affordable Care Act (ACA). On March 31, any American without qualifying health insurance faces a tax penalty.
Whether you love or hate “Obamacare” (as the ACA is perhaps better known) the new tax ensures that every U.S. citizen and legal resident participates in it. Under the law, all Americans must be covered by either private insurance, an employer, Medicare, Medicaid, or enrollment in a state sponsored plan or else pay a fee with no coverage benefit.
This individual mandate requirement technically began on Jan. 1, 2014, but the ACA allows for three consecutive months without insurance before the tax kicks in.
However, a bit more wiggle room remains. On March 21, White House press secretary Jay Carney suggested that as long as someone starts the enrollment process before the March deadline, they still may be able to get coverage by May and avoid tahe penalty.
“As was the case for the December deadline, we’re going to want to make sure that people who are already in line can finish their enrollment,” he said. Short on details, Carney referred reporters to the Centers for Medicare and Medicaid Services, and the Department of Health and Human Services for the particulars of “how the volume will be handled.”
Seeking a Surge
Website traffic rose sharply at the end of December as an influx of folks rushed to meet the deadline to get coverage starting in 2014. According to Carney, the White House anticipates a similar surge at the end of this month, “naysayers notwithstanding.”
An adult who remains uninsured for the rest of 2014 is charged a tax penalty of $95 for the year or 1 percent of income, whichever is greater. This opt-out tax increases to a maximum of $695 per adult or 2.5 percent of income by 2016.
The 2010 health law was designed to provide affordable insurance options so that virtually everybody can get coverage—provided they sign up for a plan in time. In addition to a penalty, those who fail to get coverage before April 1 also miss out on insurance subsidies the ACA provides to people below certain income thresholds during the open enrollment period.
Those in a life transition such as marriage, divorce, a new birth, or a recent job loss are able to enroll outside of the open enrollment period. Everyone else will have to wait until Nov. 15, 2014, when the health insurance marketplace reopens.