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The Affordable Care Act open enrollment deadline is January 31, 2016. This period is a dedicated moment in time when individuals can sign up for health insurance through a government portal (i.e. Healthcare.gov).

Failure to comply will result in a fine. But everyone is busy. Everyone has different responsibilities and sometimes signing up for health insurance gets pushed back on the to-do list. What happens if you just run out of time and are unable to meet the January 31st deadline? Does that mean you can’t get health insurance for a whole year?

Individual Shared Responsibility Payment

The Affordable Care Act states that if you are able to pay for health insurance, you’re required to acquire health insurance that meets the minimum essential coverage. This penalty is calculated in two different ways. First, there’s the percentage of household income. The second is based on a per person basis.

Percentage of Income

  • 2.5 percent of household income
  • Maximum: Total annual premium for national average price of a Bronze plan sold through the marketplace.

Per Person

  • $695 per Adult
  • $347.50 per Child Under 18
  • Maximum: $2,085

You only have to pay for family members that don’t have health insurance. If you do have coverage for part of the year, then you owe 1/12 of the annual amount for each month you don’t have coverage. There is a short-gap exemption if you’re uncovered for only 1-2 months.

What if You Miss the January 31st Deadline?

If you do miss the open enrollment period, is there anything you can do? The short answer is yes.

There are exemptions in certain cases if you are unable to sign up for health insurance during the open enrollment period. The special enrollment period is available to individuals who miss the open enrollment deadline due to a change in family changes, you lose your current plan, move to a new state, changes in your income, move to a new state, death of a covered member in your household, or have another recognized hardship.

If you believe that you might qualify for the special enrollment period, you can see if you qualify for an extension.

Why Isn’t There Year-Round Enrollment?

The reason why the government doesn’t allow for a year-round enrollment period is based on concerns from insurance carriers. If people are allowed to enroll whenever they’d like, people won’t enroll until they’re sick.

If people only enroll and pay for health insurance when they’re sick, this causes something called “adverse selection” or rigged trade. Insurance works because a large pool of people are paying into the health insurance pool on a monthly basis. If people aren’t paying into the pool, then there isn’t money to cover medical procedures.

Can I Still Get Health Insurance Outside of Open Enrollment?

There are private insurance plans outside of Open Enrollment that count as your minimum essential coverage. To find a plan outside of a government marketplace, you must contact an insurance company, agent, or broker.

While you won’t be fined for not having medical insurance if you purchase a healthcare plan outside of the open enrollment period, it does disqualify you from tax credits. So be sure to sign up for your health insurance before the January 31, 2016 deadline.

You are required to have health insurance. Don’t put yourself or your family in a precarious situation because you forget to enroll before January 31st. In the event that you do miss the deadline, you do have options for an extension or to acquire health insurance outside a government marketplace.

Image Courtesy of Niklas Rhose

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