18,000 Californians use extended Obamacare sign-up to avoid tax penalty
California officials said about 18,000 people have taken advantage of an extended Obamacare enrollment period that was created as a final opportunity to escape the health law’s tax penalties.
The special enrollment window runs until April 30 for people who claim they were unaware of the Affordable Care Act’s financial penalties for being uninsured.
Peter Lee, executive director of the Covered California exchange, said Tuesday that since Feb. 23 more than 18,000 people have signed up for a private health plan and cited that reason for enrolling during the extended period.
Normally, obtaining a policy outside regular open enrollment, which closed Feb. 20, is reserved for people who experience a qualifying event such as divorce, having a child or losing employer coverage. That type of special enrollment is available year round.
Overall, 1.4 million Californians get their health coverage through the state marketplace.
Uninsured people can’t avoid a health-law penalty for lacking coverage in 2014. But there’s still time to do something for the 2015 tax year.
“It’s not too late to avoid a penalty for 2015,” Lee said. “2014 is water under the bridge. You can’t affect that.”
Lee said the exchange is working with tax preparers and other government agencies to help ensure that people aren’t surprised by the federal penalties.
An individual making $40,000 who can afford coverage would face a tax penalty of about $600 for being uninsured in 2015, Lee said.
A family of four with a household income of $70,000 might have to pay nearly $1,000 to Uncle Sam for lacking health coverage this year, according to the state.
“Some people are just now discovering that being uninsured can be an expensive proposition,” Lee said. “We don’t want there to be any surprises.”
Consumers can seek an exemption from the federal mandate to buy health insurance. Grounds for getting exemptions include financial hardship and religious reasons.
For the 2014 tax year, the penalty for being uninsured is $95 per adult or 1% of modified adjusted gross income, whichever is greater.
Those penalties are increasing for future tax years. For 2015, they rise to $325 per adult or 2% of income, whichever is higher.
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