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Metro Brief: Special enrollment offered to uninsured district residents facing IRS tax penalties

District of Columbia

On March 16, 2015

The DC Health Benefit Exchange Authority has adopted a recommendation allowing a special enrollment period for District residents who may be subject to a federal tax penalty because they did not have health insurance. These District residents may be learning about the penalty for the first time when they file their 2014 federal tax returns. The period starts March 15, 2015, and ends on April 30, 2015. 

To qualify, residents must attest that when they filed the 2014 federal tax return, they paid a tax penalty to the IRS for not having health coverage in 2014.  A person can also qualify if when preparing the 2014 federal taxes the taxpayer first became aware of, or understood the implications of, the tax penalty after open enrollment ended on February 15, 2015.  

With this new enrollment program, even though open enrollment ended, a qualified person can shop and enroll in affordable health insurance through the District’s on-line marketplace called DC Health Link.

“As the tax filing deadline approaches, some District residents are realizing that they have to pay a tax penalty to the IRS for not having health coverage last year,” said Diane C. Lewis,  chair of the DC Health Benefit Exchange Authority Executive Board. “We want to make sure that District residents have an opportunity to avoid paying tax penalties to the IRS, which is why we will be offering a special enrollment period for residents to enroll in affordable, quality health insurance.”

Individuals who did not have health coverage in 2014 are required to pay a tax penalty to the IRS.  The penalty is 1% of gross household income over the federal income tax filing threshold (the minimum amount of gross income an individual or family must make to be required to file a tax return) or $95 per individual—whichever is greater. For 2015, the penalty increases to $325 per individual, or 2% of gross household income over the tax filing threshold—whichever is greater.

Uninsured District residents who do not enroll during this Special Enrollment Period and do not qualify for other SEPs will not be able to sign up for coverage until the 2016 Open Enrollment Period, which starts November 1, 2015. These residents may be subject to a federal tax penalty when they file their 2015 federal income taxes. Residents who are eligible for Medicaid can enroll throughout the year.

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