PPACA and the IRS:
CMS Announces Special Enrollment Period (SEP) for Tax Season



On February 20th, The Centers for Medicare & Medicaid Services (CMS) announced  a "Special Enrollment Period" (SEP) for individuals and families who did not have health coverage in 2014 and are subject to the tax penalty or "shared responsibility payment" when they file their 2014 taxes in states which use the Federally-facilitated Marketplaces (FFM). This special enrollment period will allow those individuals and families who were unaware or didn't understand the implications of this new requirement to enroll in 2015 health insurance coverage through the FFM.


For those who were unaware or didn't understand the implications of the fee for not enrolling in coverage, CMS will provide consumers with an opportunity to purchase health insurance coverage from March 15 to April 30. If consumers do not purchase coverage for 2015 during this special enrollment period, they may have to pay a fee when they file their 2015 income taxes.


To be eligible for this Special Enrollment Period (SEP) you must live in a state that utilizes a Federally Facilitated Marketplace (FFM) and meet the following criteria:


  • Currently are not enrolled in coverage through the FFM for 2015,
  • Attest that when they filed their 2014 tax return they paid the fee for not having health coverage in 2014, and
  • Attest that they first became aware of, or understood the implications of, the Shared Responsibility Payment after the end of open enrollment (February 15, 2015) in connection with preparing their 2014 taxes.


The special enrollment period will begin on March 15, 2015 and end at 11:59 pm E.S.T. on April 30, 2015. If a consumer enrolls in coverage before the 15th of the month, coverage will be effective on the first day of the following month.  This year's tax season is the first time individuals and families will be asked to provide basic information regarding their health coverage on their tax returns. Individuals who could not afford coverage or met other conditions may be eligible to receive an exemption for 2014.


Most taxpayers (about three quarters) will only need to check a box when they file their taxes to indicate that they had health coverage in 2014 through their employer, Medicare, Medicaid, veterans care or other qualified health coverage that qualifies as "minimum essential coverage." The remaining taxpayers  (about one quarter) will take different steps. It is estimated that 10% to 20% of taxpayers who were uninsured for all or part of 2014 will qualify for an exemption from the requirement to have coverage. A much smaller fraction of taxpayers, an estimated 2% to 4%, will pay a fee because they made a choice to not obtain coverage and are not eligible for an exemption.


Americans who were not insured during some or all of 2014 may be subject to the following tax penalty:


$95 per person (max of 3 per family) or 1% of your income - whichever is greater


The penalties for not having health insurance will increase as follows throughout the coming years:


2015 - $325 per person (max of 3 per family) or 2% of your income - whichever is greater

2016 - $695 per person (max of 3 per family) or 2.5% of your income - whichever is greater


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