Health insurance options available for late enrollees

Today, we bring you a guest blog from TaxSlayer Pro partner VelaPoint Insurance to help tax professionals learn more about health insurance options for individuals who didn’t enroll during open enrollment.

Is it too late?

By Libby Anderson, VelaPoint

Tax season is really just beginning to ramp up, and your hands are about to get very full. One more thing to worry about? Your clients’ health insurance. As you know, under the Affordable Care Act, eligible individuals must have some kind of qualifying health coverage—insurance through an employer, Medicaid, an individual plan purchased from the Marketplace or directly from an insurance company, etc. If they don’t, they may be forced to pay a tax penalty.

Anyone who went without coverage for more than two consecutive months in 2015 will most likely be penalized when filing their 2015 federal return, and you get to be the bearer of that bad news. And you get to follow it up with even worse: if they didn’t already buy insurance for 2016, it’s probably already too late to do so, and they’re going to be penalized again.

When the Affordable Care Act took effect, it didn’t just guarantee coverage for those with pre-existing conditions and offer subsidies to help pay premiums. It instituted what are known as open enrollment periods: the only time during the year that most Americans can enroll in individual health coverage. The enrollment period for all of 2016 ended on January 31, well before you’ve even had contact with most your clients for 2015 filing. Anyone who didn’t enroll during open enrollment may be stuck without health coverage for the rest of the year.

This can be frustrating for everyone involved. But your clients still have options. Outside of open enrollment, it’s possible for them to enroll in Affordable Care Act coverage if they’ve experienced a qualifying life event. Some examples of qualifying life events are:

  • A change in employment
  • Getting married or divorced
  • Adding to your family through birth or adoption
  • Citizenship status changes
  • A change in eligibility for programs like CHIP and Medicaid

If these don’t apply to your clients, they still have options for protection. Short-term medical policies are designed to cover individuals between other health insurance, like waiting for employer coverage to kick in or a 2017 plan to be purchased during open enrollment. Short-term plans are ideal for those who are relatively healthy and are typically significantly less expensive than regular health coverage. However, the coverage may be less robust and enrolling in short-term medical coverage won’t keep your clients from being penalized.

Explaining your clients’ health insurance options goes well beyond your job duties. Foreseeing this issue, TaxSlayer has partnered with VelaPoint Insurance, a national insurance brokerage, to help connect your clients with licensed experts. And even better, it’s possible to earn additional revenue when you refer your clients. Learn more about the VelaPoint Referral Program here.