Do I need to sign up for ACA for a few weeks to avoid penalty?

March 28, 2014 11:15 AM

ACA penalty question. There is a 99% likelihood that I am about to be hired by a company that will provide me health coverage beginning on April 7th. I have not been given a formal offer, but I have been given verbal assurance, and I have every reason to believe I will receive an offer next week. The ACA deadline is March 31st. Do I need to sign up for ACA to cover the week between March 31 and April 7 in order to avoid paying a penalty?

I am currently working as a contractor, with no benefits, for a company that is about to make me permanent, with benefits. I have not received a formal offer, but I had an interview yesterday at which I received verbal assurance that I would be hired, starting around April 7th.

I am currently uninsured and in good health. As there is a 99% likelihood that I'll have health coverage provided through my company starting in a week or two, I am reluctant to sign up for ACA. However, I want to avoid a penalty at the end of the year.

Do I need to sign up for ACA coverage to avoid the penalty, or will it be sufficient that I am insured from April 7th forward? I admit to being pretty confused about the requirements and regulations.

Thanks so much for your help.

posted by scarylarry to Work & Money (5 answers total)

Best answer: The deadline has been extended, sort of:

Under the new rules, people will be able to qualify for an extension by checking a blue box on HealthCare.gov to indicate that they tried to enroll before the deadline. This method will rely on an honor system; the government will not try to determine whether the person is telling the truth.

So you might want to "start" signing up, then check that box and go back after April 7th to cancel your "started" signup.
posted by Etrigan at 11:22 AM on March 28, 2014 [5 favorites]

Best answer: I heard it discussed on the radio yesterday, and the guy said that if you had started the enrollment process online by March 31 you'd be granted a grace period to finish the enrollment. Etrigan beat me to it - I'd start enrolling online but not complete it just to cover your bases.
posted by TallulahBankhead at 11:24 AM on March 28, 2014 [1 favorite]

Best answer: According to this breakdown (see "How the ObamaCare Tax Penalty Works" section), :

"If you’re uninsured for just part of the year, 1/12 of the yearly penalty applies to each month you’re uninsured"
and
"The penalty is pro-rated for the number of months you are without health insurance, though there is no penalty for a single gap in coverage of less than 3 months in a year."

So I think you're good.
posted by ThePinkSuperhero at 11:24 AM on March 28, 2014 [3 favorites]

Best answer: Not an ACA lawyer, just dealing with this personally. The 2014 notices of coverage which employers must send are due to taxpayers and the IRS by Jan. 30, 2015--it's envisioned it will be a process just like the W-2 process. You demonstrate your 2014 coverage when you file your 2014 taxes in April 2015. So, your coverage starting April 7 2014 should get you a notice in time for your 2014 taxes next year. I have not seen any information about partial year coverages, which is the crux of your question, unfortunately.

Also, if you sign up right now, coverage won't start before May 1, and you don't have to pay your premium right away. So, I would think you could complete the application process and not pay your premium and cancel the coverage.
posted by crush-onastick at 11:26 AM on March 28, 2014 [1 favorite]

Response by poster: Super helpful responses, everyone. These things confuse and overwhelm me, and you've made it much clearer! I really appreciate it.
posted by scarylarry at 11:30 AM on March 28, 2014