So you missed the Obamacare deadline? Here’s what to do

You may be in for a rude awakening today if you're uninsured and missed yesterday's enrollment deadline for Obamacare coverage in 2014.

Of course, like everything having to do with the government, there are some loopholes and ways to pick up coverage this year. But for many uninsured Americans who dragged their feet or opted against buying coverage, the decision could prove costly not only this year, but next.

"After the deadline, technically you cannot buy any insurance," notes John DiVito, president of private insurance exchange Flexible Benefit. "I think you'll find a lot of people who missed out on this opportunity. Some read that coverage was expensive, and were intimidated, or thought they would still be able to buy it later in the year."

There are three loopholes, however, which could allow some Americans to still get coverage:

1) Tech glitches. Consumers who had trouble enrolling in a health care plan under the Affordable Care Act will receive an extension through mid-April to enroll. However, it's unclear how consumers will be asked to prove they were stymied by tech glitches, or if it will be on an honor system, DiVito notes. On Monday, the last day to enroll, HealthCare.gov experienced two brief outages amidst a high volume of last minute sign-ups.

2) A "qualifying life event." People who had a major change in their life -- such as losing their job or getting a divorce -- can enroll in a plan, but consumers will have to show proof, DiVito notes. Voluntarily losing coverage because you failed to pay your premiums isn't considered one of those events, Healthcare.gov notes.

3) Buy short-term insurance. Yes, this stop-gap measure exists, but be prepared: these plans -- which last for less than 12 months -- carry some downsides. For instance, they may not cover preexisting conditions and don't qualify as an Obamacare "minimum essential coverage," which means you'll still be on the hook for penalties.

So what are the penalties? Many consumers are also confused on this point, DiVito notes.

While it's true that some uninsured will pay what appears to be a nominal $95 fee, that's not the whole story. The fact is that the 2014 penalty is either $95 per person for the year, or 1 percent of your income above the tax filing threshold of about $10,000, depending on which is higher.

That means that an individual with income of $50,000 would pay a penalty of about $400 on their 2014 taxes. That penalty, by the way, will rise to 2 percent in 2015.

"Many people are not going to know about penalty until after they pay taxes," DiVito adds. "It's going to be a chunk pulled right out of their return."

For people who missed the deadline and don't qualify for the loopholes, there's a bright light toward the end of the year: the enrollment period will open again in November, with insurance coverage starting in January 2015.

Until then?

"Stay healthy until January 1," notes DiVito.

  • Aimee Picchi

Comments

Market Data

Market News

Stock Watchlist