Tips for the Uninsured as Tax Day Approaches

Guest Blog by Ciara Johnson, RWV-NY Intern and MSW Student at Columbia University

The rate of uninsured people in the United States has dropped to 11 percent, according to a Gallup poll released earlier this month. That’s the lowest uninsured rate since Gallup began tracking it eight years ago. Still, that is a lot of people facing potential penalties as this year’s tax deadline approaches. What do you need to know if you are one of these uninsured people, or you are someone working with uninsured people? Here are a few tips.

pay taxesThe penalty for not having health insurance has gone up again this year. April 18 (yes, the IRS has changed the deadline for this year!) is the third tax deadline for which the Affordable Care Act (ACA) penalties for not having health insurance will apply. According to the healthcare.gov, this year’s penalty went up from 2 percent to 2.5 percent of your yearly household income. With the increase, you will have to pay roughly $695 per adult and $347.50 per child under 18. The maximum penalty, which is equal to the cost of the yearly premium for a bronze plan, is $2,085.

Anyone who can afford health insurance as determined by your yearly income, but chooses not to buy it, will have to pay a penalty.

Who is exempt from the tax penalty? Generally, whether you qualify for an exemption from the tax penalty depends on your household income. If the lowest priced bronze-level health plan available to you through the health insurance marketplace in your state costs more than 8.05% of your household income, then your coverage is considered to be unaffordable. In this case, you can claim an exemption by filling out and submitting IRS Form 8965 with your 2015 tax return. You can also mail in an exemption application.

An exemption can also be granted based on a number of circumstances. Many are “hardship” exemptions for people who have suffered bankruptcy, the death of a close family member, eviction, homelessness, caring for an ill family member or other disruptive life events. Other exemptions are for categories of people, such as Native Americans and people who have religious objections to medical care. For more information on the exemptions process, visit healthcare.gov.

Couldn’t afford the expensive coverage your employer offered? You moneywill qualify for an exemption from the tax penalty if you can show that the cost of the coverage would have been more than 8.05 percent of your income.

What if you had health insurance for part of the year? If you only lacked coverage for one or two months during 2015, then you will qualify for the “short gap exemption” from paying the penalty. If you were uninsured for a longer period, you will pay a fee that is a pro-rated fraction of the annual penalty. So, for example, if you were uninsured for six months, you would pay half the annual penalty.

If you are facing a penalty, can you sign up for coverage now and avoid paying it? No. In previous years, there was a special enrollment period that allowed still uninsured people to apply for affordable private health insurance through the ACA marketplaces at tax time. However, there is no special enrollment period this year for those facing penalties for being uninsured in 2015.

The next open enrollment period for marketplace coverage starts November 1. It would be a good idea to mark this date on your calendar if you are still uninsured and facing a tax penalty this month. However, be aware there are some circumstances in which you can apply for coverage before then. For example, if you experience a “qualifying life event,” such as getting married or having a child (and in New York, becoming pregnant or suffering from domestic violence or spoumagnifying glasssal abandonment), you may apply for coverage right away during a Special Enrollment Period. In addition, people can apply for Medicaid and Children’s Health Insurance year round. Examine whether you might qualify for one of these options by contacting a Navigator, or going to New York’s Marketplace, NY State of Health.

If you do have health insurance coverage, how must you prove this when filing your tax return? You are not required to submit proof of health care coverage when filing your tax return, but you should keep these records on hand to verify coverage if necessary. Acceptable forms of proof of insurance include: 1095 information forms sent to you by your insurer or employer, insurance cards, explanation of benefits statements from your insurer, W-2 or payroll statements reflecting health insurance deductions, records of advance payments of the premium tax credit and other statements indicating that you, or a member of your family, had health care coverage.

 

 

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HCFANY worked hard on a series of important priorities this budget season, described in this policy brief.  The final enacted budget can be found here.

Here’s the quick summary of how we did:

Comprehensive coverage for immigrants

HCFANY Recommendation: Provide $10.3 million in State funding to offer Essential Plan (EP) to legal immigrants who are barred from federally-funded EP.

Result: Although the Assembly One House bill included the $10.3 million in State funding, the proposal did not make it in the final budget.sad face

Full funding for Community Health Advocates (CHA)

HCFANY Recommendation: Provide $4 million in funding for CHA to help people with their insurance problems and access to health care problems, when they occur.

Result: The final budget included $3.25 million for CHA–$2.5 million from the Executive and $750,000 from the Assembly.  Due to the intricacies of State contracting, this means that the CHA program faces an 18% cut from the past year.

Prior Approval of insurance plan rate increases

HCFANY Recommendation: Reject a Senate One House bill proposal to repeal the State’s right to review proposed insurance premium increases.

Result: The measure was not included in the enacted budget.1_emoji2

Health Guaranty Fund

HCFANY Recommendation: Support with modifications the Senate and Assembly stand-alone bill which sought to set up a Health Guaranty fund to reimburse providers in the wake of a health plan closing (e.g. Health Republic).

Result: The budget establishes a fund that will be financed through “settlement funds” to reimburse providers. The process for distributing the funds is unknown and it appears to include no public representation and/or public reporting on the distributions.sad face

Medicaid beneficiary protections

HCFANY Recommendation: HCFANY opposed the following threats to Medicaid beneficiaries: elimination of spousal/parental refusal, reduction of resources that spouses of people in MLTC or nursing homes can keep, and the repeal of “prescriber prevails.”

Result: None of these proposals made the final budget. That means spousal/parental refusal remains intact, spouses of people in MLTC or nursing homes will not see a cut in the amount of resources they can keep, and “prescriber prevails” will continue to be available in Medicaid. 1_emoji2

 

 

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Eighty representatives of HCFANY member groups gendand supporters came to Albany to network with other advocates, get updates on the fight for quality, affordable health care in New York, and plan strategy at HCFANY’s Annual Meeting on January 8.

Our guest speakers emphasized the continuing strong progress health reform is making, statewide and nationally.  Danielle Holahan, the Deputy Director of the NY State of Health, reported that the number of uninsured New Yorkers has declined by an estimated 700,000, lowering the uninsured rate to its lowest point in decades.  Jackie Cornell-Bechelli, the Regional Director of the U.S. Department of Health and Human Services, similarly pointed to major gains in enrollment on the national level.

However, as a panel of HCFANY leaders emphasized, there’s still more work for us do to ensure that all New Yorkers have health insurance, that the coverage and care we receive is of high quality, and that consumers can effectively use their coverage.  They outlined HCFANY’s Legislative Agenda for 2016, including:

  • state funding for Community Health Advocates, a program that helps consumers understand and effectively use their coverage and access care;
  • the creation of a new program to fund community groups and small business-serving groups to do outreach to consumers in “hard to reach” communities; and
  • funding to cover a small group of New York immigrants who are lawful residents but not covered under the new Essential Plan.

In the afternoon, participants broke into Planning Groups to develop strong campaigns to take action on HCFANY’s priority 2016 issues.  At the immigrant coverage breakout, advocates discussed the name and structure of this exciting new campaign and new partners we should reach out to. The outreach and consumer assistance breakout discussed best practices for reaching the uninsured.  The network adequacy group identified issues relating to network adequacy that diverse communities in New York experience, including rural communities and artists.  Finally, the payment and delivery system reform breakout talked about opportunities to bring consumer voices into the state’s transformation efforts, including organizing a caucus of consumer advocates participating in the payment and delivery system reform workgroups.

For more information on any of these initiatives, please contact Carrie Tracy at ctracy@cssny.org.

 

@mx_214The ACA has helped New York close the coverage gap by enrolling over 2.7 million New Yorkers into coverage. But some New Yorkers remain ineligible for these new options for affordable coverage because of immigration status limitations on affordability programs.

The Community Service Society, a HCFANY Steering Committee member, released a new report today that offers an in-depth analysis of costs, eligibility and coverage options related to providing affordable and high-quality health insurance to nearly a half million unauthorized immigrants living in New York who are uninsurable due to their immigration status.

The paper, “How New York Can Provide Health Coverage to its Uninsured Immigrant Residents,” describes three coverage options that would improve health coverage for a vulnerable segment of the state’s population while also closing the coverage gap left by the Affordable Care Act (ACA).

Despite the state’s expansive public insurance programs, there are as many as 457,000 unauthorized immigrants ineligible for coverage. Uninsured people are more likely to get sick and even die younger, and the cost of care can mean financial ruin for uninsured families. Treating uninsured patients also strains the budgets of community health care providers that treat them.

The policy paper investigates three coverage options that would extend health insurance to between 90,100 and 241,600 immigrants New Yorkers who are ineligible for Medicaid and Marketplace coverage due to their immigration status. Funding even the most ambitious of these proposals would result in a less than one percent increase in the state’s health budget of roughly $65 billion.

The report also points out a more modest policy fix that New York could enact this year, while the State considers the more comprehensive options outlined in the report. This option, the Essential Plan “Clean Up,” would extend Essential Plan coverage to about 5,500 lawful immigrants in New York with immigration statuses that would make them eligible for Medicaid in New York, but not for the federally-funded Essential Plan. These New Yorkers include young adults who qualify for Deferred Action for Childhood Arrivals status, also known as the Dreamers.