January 31st marks the last day for the 2016 Open Enrollment Period (OEP), enabling Americans to purchase compliant health insurance. As of Jan. 20, 2016, an estimated 8.8 million people living in the 38 states using the federal Marketplace, HealthCare.gov, have purchased plans. This is in addition to the 2.7 million utilizing state-run exchanges, for an impressive total of about11.5 million purchased plans.
For those who do miss the deadline, the possible outcomes include serious tax penalties, which have increased since 2015. You may also find yourself stuck with lower-quality policies — or none at all. Here is some more information for those missing the 11:59 p.m., Jan. 31, 2016 enrollment deadline.
1.) Tax penalties – Failing to enroll could mean substantial IRS-imposed tax penalties, although hardship exemptions may be available. But should you have to pay, you’re looking at the greater of: $695 per adult and $347.50 per child, for a maximum of $2,085 per family; in 2015, these were $325 and $162.50, respectively; or, 2.5 percent of your income above the tax filing threshold, compared to 2015’s 2 percent.
2.) Inability to purchase coverage – If you don’t enroll during the OEP, you could be denied future coverage. But you may be eligible for a Special Enrollment Period (SEP), an enrollment window outside of the OEP. SEPs are granted for specific life changes, known as a Qualifying Life Events (QLEs), including:
- Childbirth or adoption
- Loss of coverage
- Income changes
- Changes in citizenship
SEPs usually begin 60 days after a QLE, but consumers may enroll up to 60 days before, preventing any coverage gaps. However rules are stricter for 2016 so consumer’s should attempt to enroll during the OEP to avoid any issues.
3.) Short-term health insurance – Short-term (or temporary) policies offer less-expensive, temporary (1-12 months) coverage. ACA-compliant plans must cover at least the 10 Essential Health Benefits, while short-term plans only cover emergencies (and not pre-existing conditions). They do not meet the ACA’s standards, so you would still face tax penalties. They’re are not eligible for subsidies and there may be coverage gaps.
4.) Self-pay – Paying out of pocket for medical expenses means being hit by tax penalties, as well as paying a lot of money. For example, the average three-day hospital stay costs about $30,000, while broken leg treatment could be as high as $7,500.