The Obama Administration has decided to waive penalties for consumers who purchase policies on the health insurance exchange by March 31, even if the policy doesn’t start until after open enrollment ends on that date, according to new guidance issued by the U. S. Department of Health and Human Services Centers this week.
Under the federal Affordable Care Act, virtually all Americans must be insured by Jan. 1, 2014. But the U.S. Department of Health and Human Services (HHS) has previously said citizens won’t have to pay a penalty, or “shared responsibility payment”, as long as they are insured by March 31, the last day citizens can enroll for Obamacare on state health exchanges. Every state is required to have an exchange, or health insurance Marketplace, where consumers can compare policies side-by-side and obtain federal exemptions to help pay for premiums.
Under previously issued rules, policies purchased after the 15th of any given month would not become effective until the month after next. So to be insured by March 31 a consumer would have had to purchase insurance by Feb. 15. Similarly, HHS has advised citizens wanting to be insured by Jan. 1 that they must complete online enrollment by Dec. 15 — a date the administration has focused on recently as they’ve tried to reassure people there’s plenty of time to enroll despite computer glitches at www.healthcare.gov, the site of exchanges for 36 states.
In a memo issued Monday, the department said it recognizes that extending open enrollment through March 31 “implies that individuals have until the end of the initial open enrollment period to enroll in coverage through the new Marketplaces while avoiding liability for the shared responsibility payment.”
“HHS is exercising its authority to establish an additional hardship exemption in order to provide relief for individuals in this situation,” the memo continued.
Under the new rule, if an individual enrolls in a plan through the Marketplace prior to the close of the initial open enrollment period, they will be able to claim a hardship exemption from the shared responsibility payment when filing a federal income tax return in 2015. HHS said they will issue additional guidance in 2014 on how to claim exemption.
It’s another in a long list of changes issued by the Obama Administration to address quirks in the Affordable Care Act discovered during the roll-out of the law.
President Barack Obama and other supporters of the act have said adjustments are to be expected due to the sweeping reforms enacted under the law, which is fundamentally changing how health care is delivered in the United States. But tea party conservatives and many Republicans have seized upon the changes as evidence that the law was poorly conceived.
Even some Democrats have been critical of the Administration’s handling of the Oct. 1 roll-out of www.healthcare.gov, which has been plagued by computer glitches that kept millions of Americans from enrolling or even logging onto the site. Some in the President’s own party have called on Obama to extend the open enrollment period to make up for the time wasted as HHS has scurried to correct the problems.