Mark it on your calendar: March 31.
It’s the most important day of the year for Americans without health insurance, because it’s the last day to sign up for coverage until open enrollment in the fall.
This deadline is part of the Affordable Care Act (a.k.a. Obamacare), the law meant to increase access to health care for all Americans, prevent insurance providers from denying coverage to people with preexisting conditions and eliminate lifetime or annual caps on coverage. To date, about 5 million people have signed up—have you?
What Happens If I Don’t Sign Up?
If you don’t sign up by the last day of March, you’ll be without health insurance for about eight months. Your next opportunity to buy a plan will be when open enrollment begins on November 15, 2014.
Plus, come tax time next year, anyone who is uninsured (with the exception of a few legally exempted groups, such as members of Native American tribes and those who earn less than required to fill out a tax return) will have to pay a penalty of $95 or 1% of their income, whichever is higher. If they remain uninsured through the 2014 open enrollment season, that penalty will increase: In 2015 it will be $325 or 2% of their income, and in 2016 it will rise to $695, or 2.5%.
There are a few exceptions to the deadline, however. “You can buy a policy if there’s a qualifying event during the year, like a job status change, a loss of coverage, marriage or divorce,” clarifies John DiVito, president of private insurance exchange Flexible Benefit Service Corporation, which oversees educational site ShopGetCovered.com. “Other than that, if you don’t buy a policy before the deadline, the carriers won’t sell you one.”
Insurance carriers set a deadline to manage their own risk, explains DiVito. “If John Doe gets hit by a car, he could buy insurance in the ambulance and his claim would be covered. Part of the carriers’ agreement with the government was that they’ll take on all this risk with new customers, but there has to be a limit—the March 31st deadline.”
Where Do I Start?
If you’re aiming to get covered before the deadline, you can head directly to healthcare.gov, which will direct you to your state marketplace, or consult a qualified exchange representative, a lawyer, a CPA or an insurance agent for advice.
Once you start looking for coverage, you may even find out that, based on your income and family size, you qualify for subsidies that could reduce the cost of your monthly premium, copays and more. To qualify, though, you must apply through the marketplace.
And don’t be intimidated—you never know what health insurance will cost you until you actually start looking. “People keep reading that it’s so expensive, but you don’t know that until you go get a quote,” says DiVito. “It takes 30 seconds!”