DC HBX: Special Enrollment Offered to Uninsured District Residents Facing IRS Tax Penalties

Health Benefit Exchange Authority

Tuesday, March 10, 2015

Special Enrollment Offered to Uninsured District Residents Facing IRS Tax Penalties

Individuals and families can sign up from March 15 through April 30, 2015.

Yesterday, the DC Health Benefit Exchange Authority (HBX) adopted a unanimous recommendation from its Standing Advisory Board to allow a Special Enrollment Period (SEP) for District residents who may be subject to a federal tax penalty because they did not have health insurance. These District residents may be learning about the penalty for the first time when they file their 2014 federal tax returns.

This Special Enrollment Period starts March 15, 2015, and ends on April 30, 2015. To qualify, a resident must attest that when the person filed their 2014 federal tax return, the taxpayer paid a tax penalty to the IRS for not having health coverage in 2014. A person can also qualify if when preparing the 2014 federal taxes the taxpayer first became aware of, or understood the implications of, the tax penalty after open enrollment ended on February 15, 2015. With this new SEP, even though open enrolled ended, a qualified person can shop and enroll in affordable health insurance through the District’s on-line marketplace called DC Health Link.

“As the tax filing deadline approaches, some District residents are realizing that they have to pay a tax penalty to the IRS for not having health coverage last year,” said Diane C. Lewis, M.P.A., chair of the DC Health Benefit Exchange Authority Executive Board. “We want to make sure that District residents have an opportunity to avoid paying tax penalties to the IRS, which is why we will be offering a special enrollment period for residents to enroll in affordable, quality health insurance.”

Individuals who did not have health coverage in 2014 are required to pay a tax penalty to the IRS. The penalty is 1% of gross household income over the federal income tax filing threshold (the minimum amount of gross income an individual or family must make to be required to file a tax return) or $95 per individual—whichever is greater. For 2015, the penalty increases to $325 per individual, or 2% of gross household income over the tax filing threshold—whichever is greater.

Uninsured District residents who do not enroll during this Special Enrollment Period and do not qualify for other SEPs will not be able to sign up for coverage until the 2016 Open Enrollment Period, which starts November 1, 2015. These residents may be subject to a federal tax penalty when they file their 2015 federal income taxes. Residents who are eligible for Medicaid can enroll throughout the year.

Background

The Affordable Care Act provides individuals, families, and small businesses in the District of Columbia with affordable options for quality health insurance through a new online health insurance marketplace called DC Health Link. For 2015, there are 31 different private health insurance options (this includes 3 catastrophic plans) from Aetna, CareFirst Blue Cross Blue Shield, and Kaiser Permanente for individuals and families. There are 192 private health insurance options for small businesses from Aetna, CareFirst Blue Cross Blue Shield, Kaiser Permanente, and United Healthcare. Residents can also apply for public insurance called Medicaid. DC Health Link is endorsed by the DC Chamber of Commerce, the Greater Washington Hispanic Chamber of Commerce, the Restaurant Association Metropolitan Washington, and the National Association of Health Underwriters.

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