Tax Penalties Waived for Many Taxpayers
The Centers for Medicare and Medicaid Services (CMS) has issued a press release announcing the introduction of a special enrollment period (SEP) for individuals and families who did not obtain the required health insurance coverage for 2014 and would otherwise be subject to a fee.
This fee, also known as the shared responsibility payment, would normally apply to individuals and families who did not obtain qualifying health insurance coverage by the February 15 deadline. This special enrollment period will apply to individuals who were either unaware of or did not understand the implications of the requirement to have health insurance.
The special enrollment period for the Federal health insurance exchange will run from March 15 through April 30. Taxpayers who fail to take advantage of the special enrollment period may be required to pay a fee when they file their income taxes for 2015.
In order to be eligible for the special enrollment period, taxpayers will need to meet a number of criteria. Those qualifying criteria include:
- Having paid the fee for not having health insurance coverage in 2014
- Attest to the fact that they only became aware of or understood the implications of the shared responsibility payment after the open enrollment deadline of February 15 had passed.
Different Deadlines for State Exchanges
While the original deadline for obtaining health insurance through the Federal healthcare exchange expired on February 15, that deadline does not apply to all state exchanges. Taxpayers whose states have established their own exchanges will need to check their own deadlines and make sure they comply with the applicable requirements.
The list below shows the states that have set up their own healthcare exchanges and lists their applicable enrollment deadlines. Taxpayers who reside in those states should refer to this information when enrolling in health insurance.
|Colorado||February 15 except for qualifying life events|
|Connecticut||February 15 except for qualifying life events|
|District of Columbia||February 15 except for qualifying life events|
|Hawaii||February 15 except for qualifying life events|
|Idaho||February 15 except for qualifying life events|
|Kentucky||April 30 for residents confused about the tax penalties for non-enrollment|
|Maryland||February 28 for residents who have already begun the enrollment process|
|Minnesota||April 30 for residents facing a tax penalty|
|New Mexico||April 30|
|New York||Special enrollment period through April 30|
|Oregon||February 15 except for qualifying life events|
|Rhode Island||February 23|
|Vermont||February 15 except for qualifying life events|
|Washington||April 17 for residents who had problems enrolling|
Qualifying life events for coverage outside the official open enrollment period include things like marriage and divorce, the birth or adoption of a child, loss of employment or the involuntary loss of other health insurance.
Incorrect Tax Forms Issued
While the deadline extension is an important consideration for many consumers, even people who currently have health insurance need to be aware of another glitch involving the Affordable Care Act, the Federal healthcare.gov website and the various state health insurance exchanges.
Approximately 800,000 tax forms for 2014 will have to be reissued. Those tax forms contained incorrect information regarding premiums paid and the subsidies for which taxpayers were eligible.
This error involved form 1095-A, a brand-new IRS form used to report subsidies received and premiums paid for health insurance bought through the Federal and state exchanges. Taxpayers who have already received their 1095-A forms should not file their income taxes without first verifying that the 1095-A forms they received were correct.
Taxpayers who feel they may be affected by the 1095-A glitch should log on to their accounts at healthcare.gov and go to the tax forms section. Affected taxpayers will see a notice that the form they received was incorrect, along with further instructions for obtaining a corrected form. The administration expects to have all the corrected 1095-A forms in the mail by the end of March, giving taxpayers enough time to file their taxes by the April 15 IRS deadline.