How to Cope With Obamacare Deadlines and Penalties

The ultimate fate of the Affordable Care Act (ACA) – the federal law known as Obamacare – remains up in the air as President-elect Trump prepares to take office. Trump repeatedly vowed to wipe the law off the books during his presidential campaign. But time marches on. Both individuals and employers must continue to meet the deadlines imposed under the ACA until, if and when, the law is actually repealed or modified.

For instance, the open enrollment period for 2017 that is available through the health insurance marketplace kicked off on November 1, 2016. That was the first day that individuals were able to enroll, re-enroll or change a marketplace insurance plan or 2017. The government delayed the delayed for the final day of enrollment to December 19, 2016, resulting in record sign-up numbers. Coverage for these enrollees starts on New Year’s Day – January 1, 2017.

But individuals still have a little more time to get their affairs in order. The last day you can enroll in a 2017 health plan, or change plans, is January 31, 2017. After this date, you’re shut out for the rest of 2017 unless you qualify for a special enrollment period.

Generally, individuals are required to obtain at least minimum essential health insurance coverage, or pay the ACA penalty for the months in which you don’t have coverage. In some cases, however, you may qualify for an exception (e.g., due to certain income limits or hardships). The penalty is paid to the IRS when you file your tax return for the year in which you don’t have the requisite coverage.

The amount of the penalty for individuals is the greater of a dollar amount or 2.5 percent of household income (up to the national average price of a “Bronze plan” sold through the health insurance marketplace). For 2016, the dollar figure is $695 per adult ($347.50 per child under age 18), up to a maximum of $2,085. That’s a hefty increase from the greater of 2 percent of household income or $325 per adult ($162.50 per child under age 19), with a maximum of $975, in 2015. The income percentage for 2017 will remain the same, but the dollar limits will be adjusted upward.

Employers with 50 or more full-time employees or full-time equivalents are also on the hook if they don’t provide minimal essential coverage to eligible employees. For 2016, the penalty is generally equal to $2,160 per full-time employee (minus the first 30 employees). This figure increases to $2,660 per full-time employee for 2017.

What will happen if Obamacare is “repealed and replaced” as President-elect Trump has promised? No one is certain how this will affect requirements for 2017, but at the very least it is likely that penalties imposed for coverage omissions in 2016 will still be be enforced. The best thing to do is to continue to operate under the existing rules until any changes are officially written into law. We will provide updates on significant developments.