(This article was last updated on October 17, 2016)
With all of the information available on Obamacare, it’s easy to lose track of the dates and deadlines involved. The Affordable Care Act makes it easier to find affordable coverage, but you do have a limited time period each year to enroll. If you didn’t sign up for 2016, then you’ve missed the Obamacare Deadline, and unless you qualified for an exemption or a special enrollment period and were able to get insurance after the open enrollment period ended, you will be taxed a penalty on your 2016 tax return for not complying with the law.
Fortunately, we’ve compiled a variety of information for you so that you can enroll on time in 2017 and avoid penalty charges in the future. The 2017 open enrollment period starts on November 1, 2016 and ends on January 31, 2017. We want to make it easy for our readers to understand their rights as well as their responsibilities under the Affordable Care Act. Whether you don’t have insurance and need to check out your options, or you do have insurance and want to make a switch, here are some important dates and deadlines to keep in mind when enrolling for healthcare coverage.
A Brief Overview of ACA Deadline Dilemmas
While the Affordable Care Act was officially signed into law on March 23, 2010, the new law didn’t take effect for all intents and purposes until October of 2013. The delay was partially due to confusion about Obamacare as a concept, a lawsuit brought before the Supreme Court and technical errors once enrollment began. As such, there was a series of delays that pushed the initial enrollment deadline back three months from its original date. In order to give you a better idea of the upcoming deadlines, we’ll go over a brief history of the initial deadlines and what they mean for the future.
The Affordable Care Act was upheld by a Supreme Court Ruling on June 28, 2012 and was set to be put into action during the following year. By October 2013, the federal marketplace opened for business to allow individuals to enroll in an insurance plan. At the outset, there were concerns about Obamacare from both sides of the congressional aisle, and people were hesitant to take advantage of this new healthcare system. Thanks in large part to widespread misunderstanding about the enrollment process, many people neglected to enroll right away.
To add to this widespread confusion, many people attempted to create an account with the marketplace only to be met with technical glitches and slow connections. In essence, the website didn’t work. Some politicians attempted to spin technical difficulties into a larger problem, and many people became even more uncertain about the government’s ability to manage healthcare. If the website didn’t even work, then there was a good chance the system itself was at stake. Fortunately, the technical issues were resolved.
In response to mass confusion regarding the tax implications assessed as Americans got their 2014 income taxes completed, the government decided to extend the 2015 Open Enrollment Period, just as they had done in 2014. After a series of small extensions by both the federal marketplace and the state exchanges, the final deadline to enroll in a health insurance plan in 2015 was April 30, 2015. The caveat to this extension was that it really only applied to people who had just gotten their federal income taxes done and realized that they were penalized for not complying with the law.
After the 2016 open enrollment period, approximately 11.1 million Americans had enrolled in health insurance on either the state or federal marketplace, which is called “On Exchange.” Standard & Poor’s, a division of S&P Global, is predicting lower enrollment for 2017 due to higher premium prices for unsubsidized consumers. However, the financial reporting agency does not think it’s “game over” for the marketplaces since plateauing enrollment is a natural part of the process. The agency instead anticipates a 5-year “path to stability” for exchange business as insurers learn how to adjust their prices for the market.
Upcoming Deadlines for the Healthcare Marketplace
The most important thing for you to remember is that you will need to adhere to certain deadlines in order to obtain health insurance and comply with the terms of the Affordable Care Act. Why do deadlines exist? With the exception of government assistance programs like Medicaid, all insurers stipulate deadlines for enrollment. Deadlines help insurers keep track of coverage, treatments and other aspects of their beneficiaries’ needs. Plus, yearly enrollment requirements ensure that people submit accurate information about their status and health history.
If you signed up for a plan through the marketplace in 2016, then your coverage expires on December 31, 2016 but will automatically renew for the 2017 calendar year unless you choose to change your plans. Health insurance experts, the federal government and we strongly recommend consumers to at least review their current plans during open enrollment. You might need new coverage, or you may find better options on the marketplace this year.
Open enrollment for 2017 begins on November 1, 2016 and runs through January 31, 2017. Note that the enrollment period for 2017 only lasts three months whereas earlier enrollment periods were longer. Extended deadlines were put in place to help people resolve unexpected tax issues, application errors and technical glitches. A three-month period should be the norm from now on unless the government again decides to extend the enrollment period for some reason. If this happens, you’ll be given plenty of notice.
Because enrollment periods will now be shorter than the initial open enrollment period, you should consider checking out your options ahead of time to determine the type of plan that you need. You can always access information through your state’s health insurance exchange even if you can’t enroll because of deadline restrictions. You can also apply for government assistance related to healthcare anytime of the year. Research your options ahead of time to avoid delays when it’s time to enroll or re-enroll during the 2017 Open Enrollment Period.
When does your coverage begin? Healthcare coverage purchased through the health insurance exchange begins on the first of the subsequent month as long as you enroll and pay your premiums by the 15th. For example, if you enroll before January 15th then your coverage begins on February 1st as long as you pay your premium. If you enroll on January 16th or later, then your coverage would begin on March 1st provided that you pay your premium. If you want your plan to kick in by January 1, 2017, then you must enroll in health insurance from November 1st – December 15th of this year.
Keep in mind that these open enrollment dates apply only to plans purchased or obtained through the marketplace or a private, non-work insurer. Employer-based coverage can be obtained according to their individual enrollment requirements. Additionally, you can apply for Medicaid or CHIP at any time if you qualify. As long as you have minimum essential coverage through one of these avenues, then you meet the requirements under the ACA and don’t need to stress about the open enrollment deadlines.
Enrollment Periods Offered by Private Insurers
Private insurance companies now set their enrollment periods to align with the open enrollment period for marketplace coverage. If you plan to purchase insurance through a private source or already have insurance through a private insurer, then this section will help you keep up with deadline requirements for enrollment.
Private health insurance – purchased via directly with the insurer or through third-party entities – now follows the same schedule for enrollment as on-marketplace coverage. In other words, you’ll need to adhere to the same dates and deadlines if you want to go off-exchange for health insurance. In 2017, you have from November 1, 2016 through January 31, 2017 to sign up for a plan whether you’re buying coverage from an exchange site, purchasing directly from an insurer or enrolling through a third-party entity.
Under the ACA, all plans must offer ten essential benefits; if your plan doesn’t offer these benefits or doesn’t meet other Obamacare requirements, then you will still be penalized for not complying with the law even though you have some sort of insurance coverage.
You have the option to use the Federal or your State’s Marketplace to enroll in a plan or you can use a private insurance exchange, which is a non-government-related exchange that allows people to shop and enroll in the very same plans, and receive the very same subsidies offered by the Federal or State Marketplaces. There are no differences in the prices offered by the Federal or State Marketplaces or private health insurance exchanges. The only difference is that private exchanges can show both on and off exchange plans (off exchange plans are plans offered at the full price, meaning that you cannot get a subsidy to help bring down the monthly costs of these plans) and the Federal and States Marketplaces can only offer on exchange plans.
Is there a benefit to enrolling through the marketplace? Opponents of the ACA would argue that you should continue to enroll in a healthcare plan through your current private insurer; however, there may be advantages to using the marketplace. You can see various options side by side, note the different features and choose a plan that accurately reflects your needs without the pressure of an insurance sales staff. You can also compare private plans with government options and apply for assistance where applicable. Furthermore, federal subsidies make buying insurance a lot more affordable for many families who need assistance.
No matter whether you choose to enroll in a plan on the marketplace or through a private provider during the open enrollment period, you need to be aware that the law states that you must have insurance for the whole year, minus a three-month pass. Therefore, if you are without insurance for more than three continuous months of 2017, you will be taxed for not complying with the law. The tax is prorated based on the number of months that you didn’t have coverage. The bottom line is that it’s best to simply get insurance during the 2017 open enrollment period to ensure that you are in compliance with the law and will not be taxed when you file your return in 2018.
Enrollment Requirements for Employer-Based Insurance
Employer-based coverage has its own set of enrollment guidelines. Unlike private options, employer-based insurance plans can only be purchased directly through the insurer liaison working with your company. If you’re dissatisfied with the coverage offered through your employer, then you’ll have to wait until open enrollment begins on the marketplace in order to browse through your options for private plans. Enrollment in your job-based insurance plan will depend on your employer’s specific guidelines as well as your plan. You can continue to enroll in employer-sponsored plans for as long as they meet the requirements of the ACA.
If you decide to enroll in a job-based plan, you won’t have access to the subsidies that are available on the marketplace for low- to middle-income families. Because job-based plans aren’t available on the health insurance exchange, you won’t be able to apply for assistance if you bypass the marketplace altogether. Some people have decided to drop their employer-sponsored coverage in favor of more affordable options through the insurance exchange site. You should note, however, that you can’t get subsidies on the marketplace if your work coverage is considered “affordable” by the government. Work-sponsored health insurance is typically more affordable for people than on-exchange plans at retail cost (i.e., without subsidies).
Deadlines vary according to employer, but you can only change your policy during your company’s open enrollment period or during the government’s open enrollment period beginning on November 1st. As of this year, there are no additional deadlines outlined by the Affordable Care Act regarding work-based insurance. Many companies have restrictions on the way in which you can change your plan, so check with your insurance liaison for detailed information on making the switch to Obamacare.
As healthcare reform continues to evolve, you may notice increasing changes to your policy. All healthcare plans as of March 23, 2010 must: eliminate lifetime coverage limits; eliminate the ability of insurers to cancel coverage arbitrarily; provide coverage for adult dependents until age 26; provide a clear and concise summary of your benefits; and ensure that your insurance providers spend the majority of your premiums on healthcare rather than overhead costs. If your plan doesn’t adhere to these guidelines, then you should consult with an adviser for more information.
The Effect of Obamacare on Medicare and Enrollment
If you take advantage of the Medicare program, then you probably have questions about how Obamacare affects your coverage. Rest assured that the ACA extends benefits in some respects and protects your rights under Medicare. In terms of deadlines, Medicare does not follow the same schedule as other types of insurance. You can still apply for and manage your Medicare application according to the same guidelines as before Obamacare. This section will briefly outline important dates regarding Medicare.
As always, Medicare open enrollment for Part A and Part B is offered at three different periods throughout the year: Initial enrollment begins three months before your 65th birthday and runs for three months after your 65th birthday with two additional periods during the year when you can switch or modify your plan. From January to March, there is a general enrollment period. If you enroll during this time, coverage begins on July 1st.
The open enrollment period or Annual Election Period lasts from October 15th through December 7th, during which time you can enroll in or change a Medicare Advantage plan. If you qualify, you can enroll in, switch or drop a Medicare Part D plan during the AEP as well. From January 1st through February 14th, you can dis-enroll from Medicare Advantage plans and enroll in a traditional Medicare plan.
If you qualify for Medicare, then you should apply when you’re first eligible because receiving approval and benefits can take time. Even though you’re given a total of seven months to enroll initially, you still have a lot of decisions to make regarding coverage. For example, the Medicare Prescription Drug Plan needs to be purchased when you’re first eligible or you may pay a penalty fee for late enrollment. Different aspects of Medicare have different deadlines, so check out the Medicare website for additional information on enrollment policies.
In essence, the Affordable Care Act does not affect dates and deadlines for Medicare because you won’t use the marketplace to enroll in Medicare or change your policies. However, if you want to take advantage of a marketplace plan instead of Medicare, then you will need to wait for the open enrollment period each year to review your options. You’ll also need to speak with a Medicare enrollment specialist to determine when you can change your coverage options if you want to switch to Obamacare. Otherwise, you can continue to enroll and manage your coverage as before. Special note: it’s illegal for anyone, including insurers on the exchanges, to sell you a private health insurance plan if you have Medicare.
Government Assistance: Medicaid and CHIP Enrollment
If you need financial assistance to afford health insurance, then you may be eligible for subsidies through the marketplace. Generally, subsidies are available for people who earn between 100 and 400 percent of the federal poverty line. You can check if you qualify for subsidies when you fill out your application through the health insurance exchange site.
If you can’t afford insurance even with subsidies, then you may be eligible for Medicaid or the Children’s Health Insurance Program. Medicaid and CHIP have enrollment guidelines that differ from those of the marketplace. For states that have expanded Medicaid, qualifying income is under 133% of the federal poverty level (FPL). Because of the way that income is actually calculated, the actual income limit for Medicaid in states that have expanded the eligibility requirements is 138 percent of the FPL. If your state did not expand the requirements, you will be eligible for Medicaid if you earn less than 100 percent of the FPL.
Penalty Fees for Missing the Deadline
What happens if you don’t adhere to the deadlines set forth by the ACA? If you don’t obtain insurance through a private source, through your employer or through the health insurance exchange, then the IRS will assess a penalty fine against you for each month that you lack coverage. The open enrollment period for 2017 starts on November 1, 2016 and ends on January 31, 2017. If you didn’t have coverage this year, then it’s too late to sign up unless you qualify for a special enrollment period. To avoid the penalty for next year – which will be higher than the one for 2016 – you should sign up for health insurance this fall.
Currently, the penalty fee for an individual without health insurance is the greater of $695 per uninsured adult and $347.50 per uninsured child (per family) or 2.5 percent of your annual adjusted gross income (taxable income). These fees will go up each year with inflation. Unless you qualify for a special enrollment period or qualify for an exemption from the individual mandate, you will be subject to a fine assessed and collected by the IRS when you file your annual taxes if you choose not to get insurance for 2017.
There are some exemptions to the individual mandate or shared responsibility fee. For example, federally recognized Native American tribes and people who are incarcerated will not be required to pay a fine for not having health insurance. Additionally, families that fall below the federal poverty line can receive a waiver on the individual mandate since they won’t be able to afford insurance and may be eligible for Medicaid anyway. Don’t assume that you’re exempt. Instead, check out your state’s marketplace website to see if you qualify so that you don’t miss any important deadlines.
Because the Supreme Court ruled that the individual mandate was a tax, the IRS is responsible for collecting this fee from your return each year. If you owe taxes, then the IRS will add the non-compliance fee to the total. If you expect a refund, then the IRS can deduct the amount of your penalty assessment from your refund. Otherwise, the IRS has no extended authority to collect the penalty fee. They can’t incarcerate you or levy liens against your assets as they might do for unpaid taxes, but the IRS can charge interest fees on unpaid fines so that the fee builds up over time. Businesses will also be assessed a fine for non-compliance, which is discussed in greater detail below.
Many people object to the idea that they will have to pay a fine for not having health insurance, but the fine is meant to cover people who otherwise can’t afford the costs. Also, the fee will cover an emergency situation in the event that you need healthcare unexpectedly. Obamacare works on the premise that everyone contributes an appropriate portion to the general welfare of everyone else. The more people contribute, the better the system works. Without an individual or employer mandate, Obamacare could not function effectively because there wouldn’t be enough funds to be distributed equitably.
Special Enrollment Periods for Individuals
Most people need to enroll in a health insurance plan within the time frames listed above; however, there is a special enrollment period available for people who qualify. You can get an extension of the open enrollment period within 60 days before or after a qualifying event or special circumstance. What qualifies as a special event? In general, circumstances that enable you to take advantage of special enrollment include: major life changes, such as birth, devastating family deaths, catastrophic medical situations and changes in your housing status; technical difficulties using the marketplace website; administrative errors; and loss of your existing coverage due to Obamacare. You can visit the federal marketplace anytime to see if you qualify for a special enrollment period.
The Minimum Essential Coverage Requirement
We’ve discussed the fact that you need minimum essential coverage in order to comply with the law, but you may be wondering what the government means by “minimum essential coverage.” When it comes to minimum essential coverage, you’re required to have a healthcare plan that covers the ten essential benefits listed above. After that, the plans can vary but must adhere to the ACA’s guidelines of protecting your rights as a consumer. More important, a healthcare plan that centers on short-term disability, supplemental plans or dental care only does not count toward minimum essential coverage. If you have one of these types of plans, then you will need to purchase or obtain a plan that provides the ten essential benefits mandated by law.
What Businesses Need to Know About Enrolling
If you own a business with 50 or fewer full-time equivalent (FTE) employees, then you can use the Small Business Health Options Program (SHOP) to find health insurance plans for your employees. Some states will offer the SHOP website directly through the health insurance exchange where individuals apply for coverage, but other states have chosen not to host a SHOP website. For example, Tennessee business owners will use an insurance company, agent or private broker to find a health insurance plan for their employees while New York business owners can apply for coverage options using their state’s marketplace website.
SHOP enrollment is continuous. If you’re a business owner, then you can browse through plans, apply for coverage and check your application status year-round. The open enrollment policies that affect the marketplace do not apply to SHOP customers. However, self-employed individuals need to make sure they get coverage appropriately. Self-employed workers without employees cannot use SHOP to buy insurance; if they want private or assisted coverage, then they can utilize the marketplace.
Businesses with more than 50 full-time employees are considered large businesses according to the Affordable Care Act and operate under separate guidelines. For businesses that employ more than 50 full-time workers, the ACA mandates that those employers offer healthcare coverage to their full-time staff. If employers fail to adhere to the guidelines, then they owe a shared responsibility fee for each worker they don’t cover.
Keep in mind that the employer shared responsibility fee or mandate only applies to businesses that employ more than 50 full-time workers. In other words, you do not have to insure your employees if you own a small business. However, you may be eligible for tax credits and other incentives that make insuring your workforce financially viable. These tax credits are only available through the marketplace. You can apply for tax credits and check out additional guidelines on insuring your employees by visiting the SHOP or marketplace website.
Why Enrolling on Time Matters
Enrolling in a health insurance plan through your state’s health insurance exchange, the federal marketplace or the private market can be straightforward as long as you prepare ahead of time and pay attention to the important deadlines. The Affordable Care Act seeks to provide affordable and potentially lifesaving insurance for every American, and if everyone contributes to the system, then we have a higher likelihood of effecting healthcare reform in the United States.