ACA Open Enrollment Ends March 31 

In less than 10 days, the majority of Americans will be required to have a health insurance program that meets the requirements of the Patient Protection and Affordable Care Act, or ACA.  Open enrollment for 2015 ends on March 31, and enrollment will not be available again until November 15 for coverage in 2015. 

Here is the information that tax and accounting firms need to know, and what they need to convey to their clients: 

• Employers generally can start offering health insurance coverage to their employees at any time during the year.  The coverage can be obtained through an agent or broker, directly from an insurance company, or through the SHOP (Small Business Health Options Program.  For 2014, the SHOP Marketplace is open to employers with 50 or fewer full-time-equivalent employees (FTEs). If you have fewer than 25 employees, the company may qualify for tax credits through SHOP of up to 50 percent of your premiums.  More information can be found here.
• Individuals must have insurance as outlined in the ACA, unless they qualify for one of the following six exemptions:
  • Their household income is less than the IRS income tax filing requirement ($10,000 for single, or $20,000 for married filing jointly);
  • They are under the age of 26 and qualify to be carried on their parents’ health care plan.
  • They belong to certain religious sects or ministries, or of a federally recognized Native American tribe;
  • They are not able to get insurance because of hardship, or the lowest premium is more than eight percent of their household income.  They are also exempt if their insurance plan was canceled and they are unable to find another plan within the marketplace.
  • They have been uninsured for less than three consecutive months in a year;
  • Their health insurance does not meet minimum coverage standards, but the state insurance commissioner allows their insurer to continue to offer out of date plans until the October 1st, 2016, additional grace period.
• Individuals are also covered if they have health insurance under a program that qualifies as minimum essential coverage:
  • Any Marketplace plan, or any individual insurance plan they already have
  • Any employer plan (including COBRA), with or without “grandfathered” status. This includes retiree plans.
  • Medicare
  • Medicaid
  • The Children's Health Insurance Program (CHIP)
  • TRICARE (for current service members and military retirees, their families, and survivors)
  • Veterans health care programs (including the Veterans Health Care Program, VA Civilian Health and Medical Program (CHAMPVA), and Spina Bifida Health Care Benefits Program)
  • Peace Corps Volunteer plans
  • Self-funded health coverage offered to students by universities for plan or policy years that begin on or before Dec. 31, 2014
  • Other plans that may qualify.
• Individuals may also qualify for a special enrollment period of up to 60 days following certain life events that involve change in family status (for example, marriage or birth of a child) or loss of other health coverage. 

Individuals who do not purchase health insurance by the March 31st deadline will face a penalty on their 2014 taxes (payable in 2015). For 2014, the annual one-time penalty will be $95 per adult, or one percent of your total income depending on your income. For uninsured children in your household, the penalty is $47.50 per child with a maximum family penalty of $285.

The penalty increases every year. In 2015 it’s 2% of income or $325 per person. In 2016 and later years it’s 2.5% of income or $695 per person. After that it's adjusted for inflation.  Those uninsured for just part of the year will pay 1/12 of the yearly penalty for each month they are uninsured. If they are uninsured for less than 3 months, you don’t have to make a payment.

Individuals who miss the March 31 deadline will need to wait until the next open enrollment period, which will occur from November 15, 2014 to February 15, 2015.