Covered California extends window to sign up for health insurance

Californians who face a tax penalty next year because they don’t have health coverage will be given an opportunity to reduce the fine by Covered California, the state’s health insurance exchange.

All they have to do is purchase insurance, ASAP.

The exchange is creating a special enrollment category for taxpayers currently without insurance, allowing them to purchase coverage outside the fixed enrollment period.

Those who enroll by the deadline of April 30 will only have to pay a penalty for the months during 2015 when they lacked insurance. Without the new enrollment period, taxpayers with no insurance would pay a penalty for the entire year.

The agency said this week that the need for such an enrollment category has become apparent as more California taxpayers are finding out they will have to pay a tax penalty this year because they did not have insurance last year. Covered California hopes the special enrollment category will encourage uninsured residents to become insured this year.

“At this point, they can’t avoid the penalty. But we can help them minimize it to the maximum extent possible,” said Lizelda Lopez, a Covered California spokeswoman.

“We recognize that this is the first time that taxes and health care are going hand in hand,” Lopez said. “Many (taxpayers) do not know that the Affordable Care Act includes a penalty if you don’t have insurance.”

The most recent open enrollment period for an exchange health plan ended on Feb. 15, though people who started the enrollment process before the deadline were given an extension to Feb. 22. The next open enrollment period won’t come around until sometime in the fall.

People who do not have coverage in 2015 will be fined on next year’s tax returns. However, they can reduce the penalty by purchasing coverage before April 30.

For example, those who enroll on April 30 likely will not receive health coverage until the beginning of June. Their tax penalty would likely be for five months, Lopez said.

This year, taxpayers who chose to go without health insurance in 2014 must pay the penalty, which was $95 per adult and $47.50 per child, or 1 percent of their adjusted growth income - whichever is higher. Next year, the penalty increases to $325 per adult and $162.50 per child (up to $975 per family) or 2 percent of adjusted income, whichever is higher.

In addition, there are a number of “life events” that allow people to enroll in health insurance outside the fixed enrollment periods, essentially at any time of the year.

Such circumstances include those who have had a baby that they want to add to a plan; those who get married and want to add a spouse to a plan; people who moved outside their plan’s coverage area; young people who can no longer be on their parents’ plan because they turned 27; and those who have lost a job and their health insurance.

You can reach Staff Writer Martin Espinoza at 521-5213 or martin.espinoza@pressdemocrat.com. On Twitter ?@renofish.