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Covered California extends enrollment

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Covered California is offering a special, extended enrollment opportunity for consumers who did not know there would be a tax penalty for being uninsured in 2014, or for those who learned they may face a penalty later this year.

Extending through April 30, consumers remain eligible to apply for health coverage during the special enrollment period by proving that they did not realize there was a tax penalty. This can be done by visiting CoveredCA.com and selecting “Informed of Tax Penalty Risk” when completing the application.

“For the first time, health care and taxes are now linked arm in arm,” said Peter Lee, executive director of Covered California. “The law requires everyone to be insured, and if you’re not, you may face a significant financial penalty when you file your taxes this year.”

The new tax penalty for being uninsured—known as the “shared responsibility payment”—has reportedly motivated many consumers to purchase insurance this year during the Nov. 15, 2014 through Feb. 15, 2015 enrollment period via Covered California. However, many people who were supposed to have purchased insurance may have been unaware of the penalty and did not know about the requirement when they had (or will have) their tax return filed by a professional. Persons who file their own tax return are required to state if they do or do not have current health care coverage.

Californians who have had a “life-changing” event such as having a baby, getting married, losing their health care coverage because they’ve changed jobs or moved to another area can now qualify for the special enrollment as long as they do so within 60 days of the qualifying “life event.” The penalty for going without insurance is expected to rise sharply this year: Persons who can afford insurance but do not purchase it may be subject to a fine of $325 per adult in a household, or pay 2 percent of their annual income, whichever amount is greater.

“We don’t want anyone to feel blindsided by the shared responsibility payment,” Lee explained. “That’s why we are establishing this limited-time special enrollment that builds on the broader availability of coverage for Californians who have a change of circumstance making them eligible outside of open enrollment. If you don’t realize the tax consequences of not having insurance, you can enroll in a Covered California plan through April 30.”

Here’s what the tax penalty can mean. A single person earning $40,000 per year will pay a penalty of about $300 for being uninsured in 2014. A family of four earning up to $70,000 per year will pay a penalty of about $500 for being uninsured last year. The penalties will  increase this year to $600 for the person earning $40,000 per year and up to $1,000 for the aforementioned family of four. Lee said the possible $1,000 tax could “certainly” be better used for typical living expenses.

“That’s $1,000 that could be used to provide protection and security to their family and give them the peace of mind they deserve,” he said. “Because of the subsidies available, may people will find it actually costs less to buy insurance than to pay the penalty.”

Covered California is the state marketplace for the federal Patient Protection and Affordable Care Act. It is in partnership with the California Department of Health Care Services and was charged with creating a new health insurance marketplace in which individuals and small businesses can get access to affordable health insurance plans. Covered California is designed to help individuals determine whether they are eligible for premium assistance that is available on a sliding-scale basis to reduce insurance costs, or whether they are eligible for low-cost or no-cost Medi-Cal.

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