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Could uninsured Americans get a second chance to avoid a fine?

Health and Human Services Secretary Sylvia Burwell discusses Obamacare tax penalties and Supreme Court challenges to the ACA
Could uninsured Americans get a second chance to avoid a fine? 01:45

Health and Human Services Secretary Sylvia Burwell said Wednesday that the administration will decide within two weeks whether to offer a special open enrollment period to consumers facing tax penalties under the Affordable Care Act because they opted not to purchase health insurance.

The health care reform law requires adults to sign up for coverage or pay a fine. Those who lacked health insurance in 2014 will have to pay either a flat fee of $95 or 1 percent of their annual income -- whichever is higher -- when they file their returns this April. The penalty for lacking coverage in 2015 increases to either 2 percent income or $325, and in 2016, that penalty will jump to 2.5 percent of income or $695.

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How does Obamacare affect tax returns for this year? 01:45

Thanks to a series of exemptions that have pushed wide swaths of Americans out of the reach of the individual mandate, the penalty may affect fewer households than expected. Most of the 14 exemptions offered by the administration deal with hardship like domestic violence, property damage from a fire or flood, or the cancellation of an insurance plan. And those exemptions come on top of the groups that were carved out of the law when it was written in 2010, including illegal immigrants, Native Americans, and certain religious groups.

The net result: Up to 90 percent of uninsured Americans won't be forced to pay a fine in 2016, as the Wall Street Journal reported last year.

The announcement about tax penalties came at a press conference during which Burwell highlighted robust enrollment in the law's exchanges during its second annual open-enrollment period, which ended last Sunday. According to the administration, 11.4 million people selected a plan through the law's insurance exchanges or were automatically re-enrolled, including 8.6 million people through HealthCare.gov, the website for the federal exchange, and 2.8 million through the state-based exchanges.

The administration has estimated that 6.5 million people who signed up for insurance through the federal exchange by the end of January would receive tax credits to help them afford that coverage. A lawsuit that will be argued before the Supreme Court in March, though, carries the possibility that those tax credits could be struck down.

The fate of the subsidies rests on how the court interprets an ambiguous piece of language in the health care reform law.

Section 1311 of the law says the federal government will give subsidies to eligible consumers who buy insurance from an exchange "established by the State." Foes of the law have interpreted that language to mean subsidies aren't available to customers in the 34 states whose exchanges are operated by the federal government.

Burwell projected confidence in the law's future on Wednesday, though, saying she's "confident" the Supreme Court will not rescind subsidies that have helped millions of Americans purchase health insurance.

"The question of people losing those subsidies...is not what we believe will happen in terms of the court," Burwell told reporters. "We're confident about our position, and believe that the United States Congress would not have passed legislation that would so exclude people from states across the country."

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