The deadline for open enrollment under the Affordable Care Act officially came to a close on Feb. 15th, but millions of Americans still hesitated to take the plunge. If you missed the boat on insurance, then you may still have some options for getting covered so that you don’t face a penalty fee next year. It’s too late to enroll on state or federal marketplaces for most people, but that doesn’t mean you can’t sign up for great coverage. You will, however, need to act fast. Below, we outline four options to consider if you didn’t sign up for insurance during the open enrollment period this year.
#1: Check if you qualify for an exemption.
Open enrollment may have ended mid-February, but you may still qualify to sign up on the marketplace if you meet certain conditions. Let’s say that you moved recently, lost your job, got married or adopted a child before open enrollment ended. These and other similar situations count as “qualifying life events,” and they may qualify you for a special enrollment period. People who meet the requirements listed on the HealthCare.gov website will need to submit proof that they experienced a major life change that prevented them from signing up for health insurance on time. If the government acknowledges your request, then you can still use your state or federal exchange site for coverage.
You should also know that if you’re a member of a federally recognized Native American tribe or an Alaska Native shareholder, you can use the marketplace all year long. These groups don’t have any restrictions on when they can sign up, and they can modify existing coverage once every month. Aside from your membership in one of these groups or a special qualifying period, you can check the marketplace site to see if you qualify for an exemption from the penalty fine even if you can’t sign up. Things like incarceration, job loss and foreign charity work may let you off the hook for fees next year.
#2: Enroll in short-term coverage until October.
Did you know that you can enroll in temporary coverage through a private insurer? This type of insurance is called “short-term health insurance,” and it’s reserved for people who need coverage for a limited time period. Short-term insurance features pros and cons that you need to consider before you sign up. For example, short-term health plans work well for single, healthy individuals with few medical needs. People with chronic health problems or those over the age of 65 may not even qualify for a plan.
Temporary insurance works on the idea that you only need it while you’re in transition. Since the next open enrollment period doesn’t start until October you can sign up for a short-term health insurance plan now so that at least you have some type of coverage in the interim.
You should note that short-term coverage does not count as qualifying insurance under the Affordable Care Act. If you sign up for temporary insurance, you’ll still be charged a penalty fee next year. On the bright side, having a policy in place protects you from unexpected situations, which can be much more expensive without insurance. It’s better to pay for limited short-term coverage than to worry about seeing the doctor sans insurance.
#3: Sign up late with a private or employer-based insurer.
The open enrollment deadline was set by the government and applies to the sign-up period specifically for state and federal marketplaces. Many private insurers and employers now follow the same schedule because it’s easier, but they don’t have to. Some insurers sell insurance policies directly to consumers all year or during alternate enrollment periods. Similarly, your employer may host its own enrollment period. If you can find a private company or employer-sponsored plans that offer enrollment outside of the government’s time frame, then take advantage of these periods to get covered.
There are a couple of advantages to this plan. First, the government assigns fees on a pro-rated basis, and you only get charged a penalty fee for every month that you lack insurance excluding a three-month gap. In other words, if you signed up for health insurance in March, you probably won’t owe any fees because the government essentially spots you three months. You’ll pay less in fees the sooner you sign up for insurance.
Second, you may find that working directly with an insurer or your company’s insurance administrator is easier than signing up on the marketplace. Federal and state marketplaces boast the benefit of subsidies that reduce the cost of monthly premiums. But not everyone qualifies for cost assistance, which means you might find better luck going to the source on your own. Despite what you may have heard, insurance companies aren’t always out to gouge you, and signing up directly, via a broker or through work could yield positive results.
#4: Take a risk by not signing up at all.
You always have the option to forgo buying insurance altogether, but there are some reasons why this approach may not work for you or your family. For one thing, skipping out on insurance means you’ll face hefty fines when you file your taxes next year. In 2014, the penalty fee for not getting covered was the greater of $95 or 1 percent of your taxable income. For 2015, that fee jumps significantly. You’ll pay either $325 or 2 percent of your taxable income, whichever is higher. The government’s “shared responsibility fee” will also increase each year, so decide if you’re willing to fork over hundreds of dollars without gaining any benefits in return.
Penalty fees aren’t the only reason to sign up for health insurance. The cost of monthly premiums might seem high, but the long-term cost of refusing insurance can seriously outweigh the short-term monthly savings. A routine, 10-minute doctor’s visit can cost a patient more than $200 cash. With insurance, that same visit might cost a $20 copayment. Like all forms of insurance, medical coverage ensures that you have access to affordable help when you need it. You can risk your health and your tax return by refusing to sign up, but be sure to weigh the pros and cons before you make a final decision.