ObamaCare fines loom for uninsured
ObamaCare fines loom for uninsured
By Elise Viebeck - 12/17/14 06:00 AM EST
People without insurance are running out of time to avoid
the hefty ObamaCare penalties that the IRS will be handing down in 2016.
Consumers face a Feb. 15, 2015, deadline to buy
insurance, after which those without coverage could be hit with fines of $325
per adult or 2 percent of family income, whichever is higher.
Uninsured people looking to escape the penalties are
turning to the exchanges before they close, while insurance companies and tax
preparers are seizing on the looming tax hit as a business opportunity.
One recent mass mailer from CareFirst BlueCross
BlueShield obtained by The Hill warned potential customers in the Washington,
D.C., region that going without health insurance coverage would come with a
steep cost.
“When you don’t have health insurance ... you put your
financial security at risk,” the mailer states. “That’s because under the new
Affordable Care Act legislation, millions of Americans will have to pay an
increased penalty tax of at least 2 percent of their income in 2015 if they go
uninsured.”
The “good news,” the letter said, is that CareFirst
BlueCross BlueShield has “solutions” to help people avoid the penalty,
including coverage that is “compatible with financial assistance or free money
from the government that will help qualifying individuals pay for insurance.”
The company declined to comment on the mailer.
The message is part of a shift in focus for the health
insurance industry as ObamaCare continues a relatively smooth second year of
enrollment.
Last fall, issuers were hesitant to mention the mandate
as technical glitches plagued HealthCare.gov and stopped some consumers from
enrolling.
The penalties for going without health insurance were
also more modest, with uninsured people due to pay $95 per adult or 1 percent
of family income this tax season. Under the second-year enrollment rules,
families that forgo insurance could end up owing $1,000 or more.
Tax preparation companies are touting their expertise in
handling the IRS’s ObamaCare rules as they gear up for a new filing season.
Part of the pitch is helping consumers avoid the mandate
through an exemption if they are eligible.
A variety of hardship qualifications makes this route
possible for many people, including those who experienced the death of a close
relative, had their previous health plan canceled or saw an increase in
necessary expenses due to caring for an aging family member.
“There are a lot of people who will qualify for an
exemption,” said Avalere Health CEO Dan Mendelson. “If a company can save
someone the 2 percent fine on $50,000 of income, that is significant.”
Firms are also offering to help current enrollees understand
how changes in income can affect their tax credits to buy coverage. In some
cases, they can also help the uninsured select health plans.
In promotional materials, H&R Block and Jackson
Hewitt Tax Service say they can provide consumers relief, arguing that
healthcare reform is making tax planning more difficult.
“The ACA [Affordable Care Act] has changed the landscape
of both healthcare and tax,” H&R Block states online, inviting consumers to
calculate their mandate penalty or receive a “tax impact analysis” when they
become a client.
Jackson Hewitt urges consumers to stop by one of its
locations, promising that their employees “work harder to keep up with the
latest tax law changes to protect you from possible penalties — not everyone
else does.”
The marketing around the healthcare law is taking flight
at a time when surveys show the public remains deeply confused about the
mandate.
Almost half of U.S. adults are unaware they must report
their health insurance status on their 2014 tax returns, according to a
TurboTax survey released earlier this month.
And while about three in five uninsured people know the
law penalizes people without coverage, nearly 90 percent do not realize the
2014 deadline has already passed.
As a result, experts are urging insurers and the federal
government to do more to emphasize the mandate this enrollment period.
Mendelson said the insurance industry is talking about
the penalties more than last year, though the Obama administration has not yet
adopted that approach.
“You have to remember that most people will sign up for
this benefit in the very last weeks before they have to, so you wouldn’t want
to message negatively until the end,” he said. “They have a choice about
whether to motivate by fear or by benefit. I think the fear might come late.”
Anne Filipic, president of the campaign-style group
Enroll America, said the mandate is coming up more frequently this year.
“We will always lead our conversations with the great
benefits that are available to consumers,” Filipic said in a joint interview
with The Hill and The Wall Street Journal last month.
“As for the fine, that is something that we will
communicate to consumers about as well. It’s about delivering the facts.”
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