For consumers, the intent focus on “enrollment” with people cheering or booing as the numbers rise and fall in a style more suitable to the Super Bowl than a Healthcare law is largely irrelevant to most individual’s lives (much like the ultimate score in a Super Bowl).
However, as tax season approaches, there is an instance where the “ENROLLMENT METRIC” that is largely not connected to our struggles with health care and health insurance in our own lives is relevant, and that’s TAX TIME.
I don’t like Obamacare and you should always consult a tax expert. These are boilerplate warnings that have little impact on this article which considers how consumers can benefit this tax year from the messiness of Obamacare by understanding the ENROLLMENT METRIC and the government’s primary interest in claiming higher enrollment numbers in order to justify bad law.
By focusing on the government concern with enrollment, many consumers will be able to avoid a negative TAX impact from Obamacare because in forgiving itself its imperfections, the government has allowed some of those tolerances of its own incompetence to trickle down to you and me, the common consumers.
The government’s desperation to preserve the law known as Obamacare has resulted in a lot of chaos and governmental bickering, but it’s not all bad for consumers. If your issue tends to discourage enrollment, you can expect a fight from the government. If your issue tends to support the enrollment figures the government comes up with then there’s probably a way out for you.
Start with the individual mandate that requires certain individuals to purchase health insurance or pay a penalty. This year, it’s largely the “honor” system since the employer part is put off until next year.
The “honor” system and the individual mandate: This year the honor system extends to individuals who had non-Obamacare (through the state or federally facilitated marketplace) health plans with the requirement to check off a box that states you had health insurance.
This honor system mirrors the self-attestation permitted for individuals trying to get Obamacare plans with Obamacare subsidies, which actually goes against the verification requirements that are included in the Affordable Care Act. Therefore, because of the government’s disorganization, individuals are merely held to the standard of the honor system when it comes to the individual mandate.
But how about if you took advance payment premium tax credits and shouldn’t have? Again, the government is a huge perpetrator when it comes to paying the premium tax credit when it shouldn’t have. Its own report this summer uncovered a vast majority of fake applicants given subsidies simply based on the sloppiness of the government’s verification process. Then there were the individuals who were paid in spite of failure to provide the government with the necessary documentation required such as citizenship documentation in order to receive the payments. And the anticipated defense of payment of premium tax credits to all enrollees whether they complied with the law’s limits that such payments be available only to enrollees through state exchanges, the issue that the Supreme Court will consider in King v. Burwell.
Naturally, the law, the Affordable Care Act requires repayment of these overpaid amounts BUT again, the government is very forgiving of itself and in this case the same will apply for many consumers who were overpaid (in other words paying lower amounts for health insurance than they should have) and many of them will be fully forgiven or have to repay lower amounts than what they owe, or will receive extensions on when such repayments of amounts if any would have to be repaid by.
In Notice 2015-9 the IRS addresses, “ PENALTY RELIEF RELATED TO ADVANCE PAYMENTS OF THE PREMIUM TAX CREDIT FOR 2014,” which provides “relief” for taxpayers “…from the penalty under § 6651(a)(2) of the Internal Revenue Code for late payment of a balance due and the penalty under § 6654(a) for underpayment of estimated tax,” for 2014. The details can be viewed at http://www.irs.gov/pub/irs-drop/n-15-09.pdf.
Procrastinator’s Dream: Then there’s the enrollment deadline for enrollees, this year it goes through February 15th, far longer than the enrollment time given to the majority of Americans on employer-sponsored health plans.
According to CMS Guidance of December 14, 2014, “Bulletin #14: Guidance for Issuers on 2015 Reenrollment in the Federally-facilitated Marketplace (FFM),” even the February 15th deadline is not necessarily the end of the options to reenroll depending on the circumstances of the person who failed to enroll (eg allowing for efforts to reenroll that have not resulted in completed enrollment).
Then there’s the three-month cancellation process in Obamacare for Obamacare entitlement recipients: See post, “Amazing Grace Period Section 1412 PPACA/45 CFR 156.270,” “The Government will continue to pay THEIR SHARE of premiums to the insurance company for 90 days. As long as you paid at least ONE MONTH of the benefits year, you CANNOT be terminated before 90 days (like three missed payments). You still have insurance coverage as long as you PAY IN FULL by the time the 90 days is up).”
But the IRS is likely to be tougher when it comes to consumer actions that threaten its often inaccurate, highly estimated but of paramount importance ENROLLMENT METRIC. Ask yourself the question, “Does my situation encourage or discourage enrollment?” If you answered encouraged enrollment, it’s safe to assume that you’ll find a fairly painless way out of your tax situation. If your answer is that it discourages enrollment then likely you will face stiffer penalties.
For instance, for those who DON’T attempt to enroll in Obamacare by February 2015 who are paid-up members of a former Obamacare plan that is still being offered, likely you’ll still be paying for Obamacare as part of the automatic passive renewal rules the IRS has put in place, even if changes to your plan result in less coverage, higher copayments, higher coinsurance, and higher deductibles(see “Bulletin #14: Guidance for Issuers on 2015 Reenrollment in the Federally-facilitated Marketplace (FFM)”).
Healthcare.gov “encourages” individuals to return to their website within the enrollment period to avoid such an outcome. Further, once enrolled your plan your coverage will continue for the year as CHANGES after the enrollment date February 15, 2015, are less easily accomplished.
Healthcare.gov in its “Changing Health Plans after you Enroll” provisions warns that after open enrollment, February 15, 2015 that “…most people can’t enroll or make changes to their 2015 plan unless they qualify for a special enrollment period.” To cancel coverage requires individuals to “select the red ‘Terminate/end all coverage’ button,” (Healthcare.gov.)
The Enrollment metric is also how we can understand the government’s rapid response to individuals who were unable to “keep their plans,” with the implementation of the “option” to enroll in an Obamacare plan, even if it’s only a catastrophic plan, suspending the age limit on the availability of such plans (30 years old) in order to capitalize on their non-compliance with the ACA by boosting enrollment.
We’ve also seen the government’s startling disinterest in serious matters that don’t impact “enrollment in Obamacare,” including the family glitch making healthcare through employers unaffordable for many families because of the steep rise in dependent coverage, the failure to address the government’s own finding that many Obamacare plans do not comply with the ACA in terms of numbers of providers, as well as the alarming number of people found to be putting off healthcare because of the increased costs facing consumers (estimated at about one-third of us).
So, this tax season, for tax purposes, if you can show just about any attempt to get insured, you’re likely not going to be facing serious risk of “punishment” from the government because for the government the only thing that has mattered is justifying the law, not its impact on consumers. For the government its single-minded determination to justify the law is expressed in terms of the largely artificial, oft-changed number of how many enrollees the government claims participate in Obamacare.
