Obamacare Enrollment Extensions -- What Happens if You Missed the Deadline?

It certainly didn't go off without a hitch.

The deadline to sign up for health insurance under the Affordable Care Act came and went on March 31, but enrollment websites crashed, marketplace phone lines groaned, and waiting times stretched on and on. Some made it through, securing approved health care plans, but some did not.

While the campaign to get 7 million Americans signed up for insurance via the federal HealthCare.gov exchange may have hit its stated mark -- and many more applicants used state exchanges to add their names to the rolls of the insured -- others have yet to successfully comply with the new health insurance mandate (or even begin the process).

Now, for the millions who remain uninsured in the U.S., consequences loom. Some may be eligible for extensions or even exemptions, but only under certain circumstances. In light of these facts, let's look at scenarios for extensions and consequences under the ACA.

ACA extensions: second chances
For some, it was as if they had waited in line to get into a new restaurant, finally gotten a table, and then been told by the waiter that the kitchen was closed. Still, if you were caught in a HealthCare.gov or state-exchange holdup because you couldn't access overloaded exchanges, you may have a second chance coming.

The new federal deadline -- a special enrollment period – already allowed registrations delayed by exchange-related problems to be finished as late as April 30 for those who submitted a paper application by April 7. That extension applied to individuals living in states where insurance enrollment under the Affordable Care Act is conducted through the federal exchange.

But other extensions are also available in states with their own exchanges, as well as in the District of Columbia. In each case, individuals must have started their application before midnight on March 31. What follow are new dates, as compiled by HealthPocket.

  • California: April 15
  • Colorado: May 31
  • Kentucky: April 15
  • Maryland: May 1
  • Massachusetts: April 15 (in special cases, June 30)
  • Minnesota: May 1
  • Nevada: May 30
  • New York: April 15
  • District of Columbia: April 15

In a number of other states, officials have promised an extension but not specified a new deadline. Others are responding to the logjam by creating a one-on-one special assistance period, supplying consultants to help the individual directly. The states falling into these two categories are Connecticut, Hawaii, Oregon, Rhode Island, Vermont, and Washington. 

There are exceptions to the ACA enrollment window for "qualifying" events during the period in which enrollment is closed. These include moving, getting married or divorced, and losing your group coverage. Under such circumstances, you should be able to acquire new ACA-compliant insurance under the terms of the law.

There are also a variety of outright exemptions to the ACA's mandate for individuals. These include religious and tribal reasons, qualifying life events and financial hardships, and Medicaid ineligibility owing to a state's refusal to expand that system.

Enrollment and fines: before the next window opens
What happens if you missed the March 31 deadline, you don't qualify for an exemption, and you fail even to meet the extensions?

  • The federal law imposes an annual penalty of $95 upon the individual. The penalty for unenrolled children is $47.50 per child, with a cap set at either $285 per family or 1% of income, whichever is higher.
  • Fees increase in 2015 to $325 per adult and $162.50 per child (up to $975 per family) or 2% of family income, whichever is greater.
  • In 2016, the penalties rise to $695 per adult and $347.50 per child (up to $2,085 per family) or 2.5% of family income, whichever is greater.

Penalties get folded into tax returns filed for the year in which they are incurred. And these fines only kick in, starting this year, if you go for three months or more without a minimum of ACA-compliant insurance.

A potential complication, however, is that if you don't enroll by the final deadlines of the extensions, insurance companies don't have to sell you compliant coverage until the next open-enrollment period begins -- the next window is scheduled to open on Nov. 15.

Granted, you might be able to purchase noncompliant insurance, but you'll likely still be exposed to the tax penalties for that year. That's still a better scenario, however, than facing the financial consequences of an illness or injury without coverage, which could wipe out savings and cripple your household.

Foolish takeaway: changes in the states
Even in states that worked to support the ACA, setting up exchanges to facilitate the process, insurance officials and agents are seeing the law impact their clients in some adverse ways.

Take Connecticut, for example, where Kevin Murray, an agent at the HIQS Group, works to link residents and multiple insurance carriers. On the one hand, the ACA guarantees that individuals will not be turned away at the insurance desk because of a pre-existing health condition. On the other hand, if they have a pre-existing condition but failed to meet the deadlines, there's little Murray can do until the window reopens.

Murray explains: "Prior to ACA, if one came to us with a pre-existing condition, we were able to procure them health insurance by either enrolling the self-employed individual in a 'group of one' -- as new groups were not subject to pre-existing exclusions -- or we could enroll them in the State of Connecticut Charter Oak program for the uninsured."

But now, according to Murray, the enrollment-window rules supersede such workarounds: "ACA has done away with these two safety nets, reducing those options for our clients."

Getting more people insured is a goal of the Affordable Care Act, and it's a good one overall, but in some cases the new federal rules limit which states have been able to help individuals facing the kind of health care challenges Murray describes. It will be a test of the law to solve those problems so individuals in extraordinary need still get insured -- even if they've made problematic choices in the run-up to their crisis.

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