Today's the big day -- and for most of us, the last day -- to apply for individual health insurance during the inaugural open enrollment of the Obamacare public health exchanges, which draws to a close at midnight. After today, unless you qualify for a special enrollment period, you won't be able to purchase individual health coverage again either on your state's public exchange or through the private market until Nov. 15.
If you already have health insurance through your employer, or if you purchased or applied for coverage through your state's exchange or the federal HealthCare.gov site that serves the 36 states that didn't build their own, congratulations!
Not only are you compliant with the individual mandate that requires most of us to obtain health insurance or face a tax penalty on our 2014 federal income taxes, but you've successfully minimized one of life's handful of known hazards that can seriously endanger your financial well-being: health care costs.
More time if you start the process
If you want to obtain health insurance before the door slams shut, your best, and perhaps only, hope of doing so is to sign onto HealthCare.gov or your state exchange TODAY and begin the application process. Last week, the Obama administration agreed to postpone the deadline on exchange plans until mid-April for those who have an application in the works at HealthCare.gov by the close of business on March 31 and request an extension.
Spoiler alert: You may face a last-minute rush. In fact, a message on HealthCare.gov warns of "especially high demand" and says applicants may find themselves in a queue "to ensure the best possible shopping experience." Some users had found the site down for maintenance early on Monday.
Why does Obamacare have an open enrollment period anyway? Simple: Otherwise, many consumers would purchase coverage only when they get sick. Insurers call this "adverse selection." It would leave insurance companies neck-deep in bills with little revenue to pay them.
10 things to know for deadline day
Depending on your circumstances, here are some deadline day tips that could come in handy:
- After today, you may still be able to purchase exchange coverage during a special enrollment period if you have a "qualifying life event," such as you get married, move, give birth, adopt a child, lose health coverage due to divorce or a job loss, or have a sudden change in income that affects your tax credits or out-of-pocket subsidies. But it's not automatic. You must request a special enrollment period through your state exchange.
- During a special enrollment period, you'll be able to shop for plans on the exchange as well as through the private market.
- If you have a qualifying life event, don't delay. In most cases, the special enrollment period to buy or change your health plan lasts just 60 days.
- The door never closes on applying for coverage through Medicaid or the Children's Health Insurance Program, or CHIP. In the 26 states that have expanded Medicaid under the Affordable Care Act, childless low-income adults are now eligible for the first time.
- You can remain uninsured and still be exempt from the tax penalty if: your income is so low you're not required to file an income tax return; health insurance would cost more than 8 percent of your income; you belong to certain federally recognized tribes or religious sects; you're incarcerated; you're in the country illegally; or you're uninsured for fewer than three months of the year.
- If you live abroad for more than 330 days of the year, you're automatically exempt from Obamacare.
- If you have health insurance for at least one day in a given month, you'll receive credit for being insured the entire month under federal regulations. If you have coverage for part of the year, you'll owe a prorated tax penalty.
- The individual mandate has no effect on your 2013 tax return. It has taken effect only this year.
- The individual mandate penalty for 2014 is 1 percent of your annual income above the tax-filing threshold (currently $10,150 for individuals) or $95 per adult (to a maximum $285 per family), whichever is greater. Next year, it increases to 2 percent of income or $325 per adult.
- Avoid the rush next fall. Shoppers will still be able to browse health plans on the exchanges after open enrollment ends.
Want to read more about the individual mandate? Check out my health mandate primer.
Follow me on Twitter: @omnisaurus.
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