National News

October 28, 2013

White House OKs limited waiver on health penalty

WASHINGTON — With website woes ongoing, the Obama administration Monday granted a six-week extension until March 31 for Americans to sign up for coverage next year and avoid new tax penalties under the president’s health care overhaul law.

The move had been expected since White House spokesman Jay Carney promised quick action last week to resolve a “disconnect” in the implementation of the law.

It comes as technical problems continue to trouble the website designed as the main enrollment portal for people who don’t get health care at work.

As a consequence, Republican lawmakers, and some Democrats as well, are calling for a one-year delay in the penalties most Americans will face starting next year if they remain uninsured. Monday’s action by the administration stops well short of that, and amounts only to a limited adjustment.

Under the latest policy change, people who sign up by the end of open enrollment season on March 31 will not face a penalty. That means procrastinators get a grace period.

Previously you had to sign up by the middle of February, guaranteeing that your coverage would take effect March 1, in order to avoid fines for being uninsured.

The extension — granted for 2014 only — addresses confusion that was created when the administration set the first open enrollment period under the law from Oct. 1-March 31.

The problem was that health insurance coverage typically starts on the first day of a given month, and it takes up to 15 days to process applications. So somebody signing up March 16 — well within the open enrollment period — wouldn’t get coverage until April 1, thereby risking a penalty for being uninsured part of the year.

The administration “has determined that it would be unfair to require individuals in this situation to make a (penalty) payment,” the Health and Human Services department said in guidance issued Monday evening. As a result, the department is creating a special one-time hardship exemption for people who get covered by March 31. And they won’t have to file additional paperwork to apply for the exemption.

The mandate to carry health insurance is the most unpopular requirement of the health care law. It’s meant to nudge as many people as possible into the insurance pool. That would help keep premiums in check, since the law also forbids insurers from turning away people with health problems.

Mindful of the need to sign up lots of healthy uninsured people, the administration released an analysis Monday that concludes nearly half of uninsured single young adults could buy a “bronze” level plan for $50 or less a month, after tax credits to offset the cost of premiums.

The inconsistency between the law’s coverage requirements and the administration’s schedule for the initial open enrollment season was first pointed out by the Jackson Hewitt tax preparation company.

 

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