Missed the ACA enrollment deadline? Options are limited, but available

By Greg Grisolano, Land Line associate editor | Thursday, April 07, 2016

Here at Land Line we rely on Jon Osburn, the skipper of the Spirit of the American Trucker tour truck, to help keep us apprised of what our members are talking about on the road. Jon says lately he’s had a ton of members asking questions about health care coverage under the Affordable Care Act – specifically, how can they avoid the tax penalty for next year, and what can they do if they still need some kind of insurance this year.

While the open enrollment deadline ended on Jan. 31, there are still some options for getting health insurance coverage for medical needs, according to Rick Welsh, president of Welsh and Associates, a Kansas City-based health care and insurance consulting business that works with OOIDA’s Medical Benefits Group.

“There are really two issues here – getting the insurance coverage to protect yourself from financial catastrophe, and then there’s also the issue of what you need to have this for tax reasons to avoid a penalty,” Welsh said in a recent interview with “Land Line Now.”

Welsh says that insurance providers are offering short-term medical policies to address the first issue, but notes that the short term plans do not satisfy the requirements necessary to avoid a tax penalty.

“What it does do is it gives you insurance,” he said. “If something goes wrong, you can go to the hospital and present your card. All the major insurance carriers have short-term medical policies.”

But there’s a catch. While the ACA policies are guaranteed-issue (meaning you can’t be turned down), the short-term medical policies do ask some medical questions about catastrophic medical coverage.

“They’re just not wanting to pick up folks that have consciously blown off buying insurance,” he said. “If you have anything major wrong with you, they’re not going to accept you. The answer will be no.”

When it comes to avoiding having to pay the tax penalty for not having health insurance, or for buying a plan that’s not ACA-compliant, the only way to avoid such a penalty is to have a qualifying event occur, which will allow you to purchase a qualified marketplace plan.

For those folks that have just made the decision or just fell asleep during the open enrollment and did not get signed up, there isn’t anything they can do right now to obtain coverage that will get them out of a tax penalty.”

Those who did not enroll in a qualifying plan during the open enrollment period will be unable to purchase health insurance in 2016 unless they have a qualifying event such as loss of job, marriage, divorce, birth of a child or moving to another state.

Welsh says that in a situation of loss of coverage due to separation of employment, a person will get a Certificate of Credible Coverage from their prior carrier, which must be provided at the time of enrollment. If they did not have insurance through that employer, they will not qualify for a special enrollment.

In the case of moving from one state to another, insurance companies will ask for a utility bill from their prior residence and a new utility bill for their new residence.

A recent report from the Kaiser Family Foundation predicts that the average individual penalty for not having insurance will rise to $969, an increase of 47 percent over the previous year. 

The ACA mandates enrollment in a qualified health insurance plan for most Americans. For those not exempt by law, failure to do so will result in a penalty assessed on your federal income taxes. The tax penalty is increasing to 2.5 percent of your yearly household income for not enrolling in a qualified plan during 2016. The maximum penalty is the national average premium for a Bronze insurance plan. Fees are paid as a part of the filing process for federal income tax returns.

“You’re going to be paying $3,000 to $4,000 in penalties, so you might as well be buying the insurance,” Welsh said. “And that’s exactly the point (of the penalty).

Even if you have a qualifying event and are able to sign up for an ACA-compliant plan outside the open enrollment date, it’s still possible to have to pay a penalty for the months you weren’t covered. The amount would be one-twelfth of the total penalty for each month you didn’t have coverage.
 
The Medical Benefits Group is available to offer advice and guidance to members about the ACA and health insurance in general.

Consumers with questions are encouraged to contact the HHS call center at 800-318-2596 or visit the HealthCare.gov website where they can find local help. Agents in OOIDA’s Medical Benefits Group are also available from 7:30 a.m. to 5:30 p.m. CST, Monday through Friday, at 800-715-9369 or via email at MedBen@ooida.com.

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