MONEY Obamacare

Everything You Need to Know About the Latest Challenge to Obamacare

140603_FF_QA_Obamacare_illo_1
Robert A. Di Ieso, Jr.

Next week the Supreme Court will hear arguments in a case that could have a huge impact on millions of consumers. Here's what it's all about.

The Affordable Care Act is once again before the Supreme Court.

On March 4, the justices will hear oral arguments in King v. Burwell, a case challenging the validity of tax subsidies helping millions of Americans buy health insurance if they don’t get it through an employer or the government. If the court rules against the Obama administration, those subsidies could be cut off for everyone in the three dozen states using healthcare.gov, the federal exchange website. A decision is expected by the end of June.

Here are five things you should know about the case and its potential consequences:

1. This case does NOT challenge the constitutionality of the health law.

The Supreme Court has already found the Affordable Care Act is constitutional. That was settled in 2012’s NFIB v. Sebelius.

At issue in this case is a line in the law stipulating that subsidies are available to those who sign up for coverage “through an exchange established by the state.” In issuing regulations to implement the subsidies in 2012, however, the IRS said that subsidies would also be available to those enrolling through the federal health insurance exchange. The agency noted Congress had never discussed limiting the subsidies to state-run exchanges and that making subsidies available to all “is consistent with the language, purpose and structure” of the law as a whole.

Last summer, the U.S. Court of Appeals for the Fourth Circuit in Richmond ruled that the regulations were a permissible interpretation of the law. While the three-judge panel agreed that the language in the law is “ambiguous,” they relied on so-called “Chevron deference,” a legal principle that takes its name from a 1984 Supreme Court ruling that held that courts must defer to a federal agency’s interpretation as long as that interpretation is not unreasonable.

Those challenging the law, however, insist that Congress intended to limit the subsidies to state exchanges. “As an inducement to state officials, the Act authorizes tax credits and subsidies for certain households that purchase health insurance through an Exchange, but restricts those entitlements to Exchanges created by states,” wrote Michael Cannon and Jonathan Adler, two of the fiercest critics of the IRS interpretation, in an article in the Health Matrix: Journal of Law-Medicine.

In any case, a ruling in favor of the challengers would affect only the subsidies available in the states using the federal exchange. Those in the 13 states operating their own exchanges would be unaffected. The rest of the health law, including its expansion of Medicaid and requirements for coverage of those with pre-existing conditions, would remain in effect.

2. If the court rules against the Obama administration, millions of people could be forced to give up their insurance.

A study by the Urban Institute found that if subsidies in the federal health exchange are disallowed, 9.3 million people could lose $28.8 billion of federal help paying for their insurance in just the first year. Since many of those people would not be able to afford insurance without government help, the number of uninsured could rise by 8.2 million people.

A separate study from the Urban Institute looked at those in danger of losing their coverage and found that most are low and moderate-income white, working adults who live in the South.

3. A ruling against the Obama administration could have other effects, too.

Experts say disallowing the subsidies in the federal exchange states could destabilize the entire individual insurance market, not just the exchanges in those states. Anticipating that only those most likely to need medical services will hold onto their plans, insurers would likely increase premiums for everyone in the state who buys their own insurance, no matter where they buy it from.

“If subsidies [in the federal exchange] are eliminated, premiums would increase by about 47%,” said Christine Eibner of the RAND Corporation, who co-authored a study projecting a 70% drop in enrollment.

Eliminating tax subsidies for individuals would also impact the law’s requirement that most larger employers provide health insurance. That’s because the penalty for not providing coverage only kicks in if a worker goes to the state health exchange and receives a subsidy. If there are no subsidies, there are also no employer penalties.

4. Consumers could lose subsidies almost immediately.

Supreme Court decisions generally take effect 25 days after they are issued. That could mean that subsidies would stop flowing as soon as July or August, assuming a decision in late June. Insurers can’t drop people for non-payment of their premiums for 90 days, although they have to continue to pay claims only for the first 30.

Although the law’s requirement that individuals have health insurance would remain in effect, no one is required to purchase coverage if the lowest-priced plan in their area costs more than 8% of their income. So without the subsidies, and with projected premium increases, many if not most people would become exempt.

5. Congress could make the entire issue go away by passing a one-page bill. But it won’t.

All Congress would have to do to restore the subsidies is pass a bill striking the line about subsidies being available through exchanges “established by the state.” But given how many Republicans oppose the law, leaders have already said they will not act to fix it. Republicans are still working to come up with a contingency plan should the ruling go against the subsidies. Even that will be difficult given their continuing ideological divides over health care.

States could solve the problem by setting up their own exchanges, but that is a lengthy and complicated process and in most cases requires the consent of state legislatures. And the Obama administration has no power to step in and fix things either, Health and Human Services Secretary Sylvia Burwell said in a letter to members of Congress.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.

MONEY Taxes

Why Some Taxpayers Are In for a Big Shock This Year

Many middle-class families who got subsidized health coverage through Obamacare in 2014 are facing an unexpected tax bill now.

Roberta and Curtis Campbell typically look forward to tax time. Most years, they receive a refund–a little extra cash to pay off credit card bills.

But this year the California couple got a shock: According to their tax preparer, they owe the IRS more than $6,000.

That’s the money the Campbells received from the federal government last year to make their Obamacare health coverage more affordable. Roberta, unemployed when she signed up for the plan, got a job halfway through the year and Curtis found full-time work. The couple’s total yearly income became too high to qualify for federal subsidies. Now they have to pay all the money all back.

“Oh my goodness, this is just not right,” said Roberta Campbell, who lives in the Sacramento suburb of Roseville. “This is supposed to be a safety net health care and I am getting burned left and right by having used it.”

As tax day approaches, hundreds of thousands of families who enrolled in plans through the insurance marketplaces could be stuck with unexpected tax bills, according to researchers. Those payments could be as high as $11,000, although most would be several hundred dollars, one study found.

The result is frustration and confusion among some working and middle-class taxpayers, whom the Affordable Care Act was specifically intended to help. The repayment obligations could dissuade people from re-enrolling and provide more fuel to Republicans’ continuing push for a repeal of the law.

The problem is that many consumers didn’t realize that the subsidies were based on their total year-end income and couldn’t reliably project what would happen over the course of the year, said Alyene Senger, research associate at The Heritage Foundation, a conservative think tank.

“How do you know if you are going to get that promotion?” she said. “How do you know what your Christmas bonus is going to be?”

In addition, Senger said the government didn’t go out of its way to publicize the tax consequences of receiving too much in federal subsidies. “It isn’t really something the administration focused on heavily,” she said. “It’s not exactly popular.”

The system was intended to ensure that people received the right amount in subsidies, no more or less than needed. But the means the government chose to reconcile the numbers was the tax system — notorious for its complexity well before the Affordable Care Act passed.

Enrollees who enrolled in Obamacare now are realizing that certain positive life changes–a pay raise, a marriage, a spouse’s new job–can turn out to be a liability at tax time. “We are definitely seeing some pain,” said Jackie Perlman, a principal tax research analyst at H&R Block.

H&R Block released a report Tuesday saying that 52% of customers who received health coverage through the insurance marketplaces last year underestimated their income and now owe the government. They estimate that the average subsidy repayment amount is $530.

At the same time, about a third of those enrolled in marketplace coverage overestimated their income and are receiving money back–about $365 on average, the report said.

Under the Affordable Care Act, the federal government made subsidies available to people who earned up to 400% of the federal poverty level—about $47,000 for an individual and $63,000 for a couple. For families who ended up making less than that, the federal government limits any repayments that might be due: The poorest consumers will have to repay no more than $300 and most others no more than $2,500. But the Campbells’ income last year exceeded the limit to receive federal help, so they have pay back the whole amount.

Roberta Campbell said she was only trying to do the right thing. Campbell, now 59, lost her job as a program director for the Arthritis Foundation in late 2012. She and her husband, who was working part-time as a merchandiser, downsized and moved into a smaller house.

They were left uninsured but were mindful of the federal mandate to be covered as of January 2014. So they signed up for a plan through California’s insurance marketplace, Covered California. The plan cost about $1,400 a month, but they were able to qualify for a monthly subsidy of about $1,000.

“We are rule followers,” she said. “We decided to get insurance because we were supposed to get insurance.”

They barely used the coverage. Roberta and Curtis each went to the doctor once for a check-up. Then, about halfway through the year, Roberta got a job at UC Davis and became insured through the university. Curtis, who had been working part-time, got a full-time job for a magazine distribution company.

They notified Covered California, which Campbell said cancelled the insurance after 30 days. But with the new salaries, his pension from a previous career and a brief period of unemployment compensation, the couple’s year-end income totaled about $85,000, making them ineligible for any subsidies.

Their tax preparer told them they would have been better off not getting insurance at all and just paying the fine for being uninsured. In that case, the Campbells say their financial obligation would have been much smaller–about $850.

“The ironic thing is that we tried to pull ourselves up by our bootstraps,” Curtis Campbell said. “Now they are going to penalize us. It’s frustrating.”

It’s not surprising that the projections people made about their income in 2014 in many cases were incorrect, said Gerald Kominski, director of the UCLA Center for Health Policy Research. The first open enrollment period started in October 2013, meaning that some enrollees based their estimates on what they earned in 2012.

Kominski said that policy experts knew there would be significant “churn” of people whose incomes change throughout the year and who would gain or lose their eligibility for subsidized coverage. But he and others said there was less understanding among consumers about how that could affect their taxes.

With tax season still underway, it not entirely clear how many people will have to repay the government for excess subsidies. But along with the recent H & R block estimates based on the firm’s customers, a UC Berkeley Labor Center study published in Health Affairs in 2013 suggested the numbers would not be not small.

Nationwide, 6.7 million people enrolled in marketplace exchanges through Obamacare in the first year. About 85% of people got federal help paying their insurance premiums.

Using California as a model, labor center chair Ken Jacobs estimated that even if everyone reported income changes to the insurance marketplace during the year, nearly 23 percent of consumers who were eligible for subsidies would have to pay the government back at least some of the amount received. About 9 percent of those receiving subsidies would have to pay the full amount. If no one reported changes, 38 percent would owe money.

The median repayment–if people reported income changes along the way—would be about $243 but some couples could owe more than $11,000, according to the research. The median amount due if people didn’t report the changes during the year would be $750.

“The most important thing for people to do along the way is to report [income] changes so the subsidy amount is adjusted,” Jacobs said.

For those who must repay money, the IRS will allow payment in installments, even after the April 15 tax deadline. Interest will continue accruing, however, until the balance is paid.

Covered California spokesman Dana Howard said he understands paying back excess subsidies puts some in a difficult spot. But he said consumers who think their circumstances might change can decline the money or just take part of it.

Howard also said the subsidies were designed to give the working class and middle class folks a leg up in affording health coverage. So when people get good jobs, he said, they don’t necessarily need the federal help to get insurance.

“When you get that really good fortune, that has to be shared back,” Howard said. “That is just how the ACA law was written.”

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.

MONEY Health Care

4 Health Moves That Can Make You Richer

piggy bank stepping on scale
Jesse Strigler Photography—Getty Images

Better physical health can be a boon to your finances. Follow these steps to stay in shape.

Welcome to Day 9 of MONEY’s 10-day Financial Fitness program. By now you’ve learned how to bulk up your savings, cut the fat from your budget, and boost your earnings. Today, taking care of your health.

Your physical health and your financial health go hand in hand, especially as rising deductibles and increased cost sharing leave you on the hook for more expenses when you get sick.

Plus, your pocketbook takes a hit when you’re overweight: The annual cost of carrying extra pounds—including medical expenses, sick leave, and even gas for the car—is $524 for women and $432 for men, according to a 2010 study by the George Washington University School of Public Health and Health Services. And Fidelity estimates that a couple who retire in good health will spend 20% less on medical care than a couple in poor health will.

You know what helps: exercise, sleep, a healthy weight, and regular checkups. Here’s how to make it easier to do the right thing.

1. Don’t Pass Up Freebies

Under Obamacare, annual physicals and a long list of valuable preventive care, from cholesterol tests to colonoscopies, are fully covered by insurance, with no out-of-pocket costs.

2. Be Your Own Doctor

Not quite, but tech has made staying on top of your health easier—especially important with a chronic condition such as high blood pressure. The Health app that’s part of the new Apple operating system unveiled last fall and the Health Tracker app for Android devices allow you to upload, input, and share health and fitness data.

3. Let Your Scale Motivate You

University of Minnesota researchers found that dieters who weighed themselves daily lost an average of 12 pounds in two years; weekly scale watchers lost only six. The once-a-day group was also less likely to regain the weight. Need help? Our sister publication, CookingLightDiet.com, offers healthy eating customized meal plans.

4. Make Tracking a No-Brainer

People who count their steps are more motivated to work out. But the novelty of fitness trackers like the Fitbit can quickly wear off. More than half of owners stop using them, a recent University of Pennsylvania survey found; a third bail within a month.

If that’s you, add a tracking app such as RunKeeper or Moves to your phone instead. “Many people carry smart-phones everywhere,” says Mitesh S. Patel, an internist and researcher at the Wharton School. “If we really wanted to improve the health of the population, smartphone trackers are an easier place to start.”

Previous:

Next:

MONEY Ask the Expert

The Right Way to Kick Your Kid Off Your Health Insurance

140603_FF_QA_Obamacare_illo_1
Robert A. Di Ieso, Jr.

Q. I am covered by my employer’s health plan, but I’m not happy with it. My son is 21 and currently covered under my plan. While I realize that I am not eligible for Obamacare, I am curious if I can terminate my son’s policy so that he might be eligible.

A. Since the open enrollment period to sign up for coverage on the state marketplaces ended Feb. 15, in general people can’t enroll in a marketplace plan until next year’s open enrollment period rolls around.

If you drop your son from your employer plan, however, his loss of coverage could trigger a special enrollment period that allows him to sign up for a marketplace plan. Whether he’s entitled to a special enrollment period depends on whether his loss of coverage is considered voluntary, say officials at the Centers for Medicare & Medicaid Services.

In general, voluntarily dropping employer-sponsored coverage doesn’t trigger a special enrollment period for individuals or their family members. But if you drop your son’s coverage on his behalf without his consent, his loss of coverage wouldn’t be considered voluntary and your son could qualify, according to CMS.

Whether he’ll be eligible for premium tax credits to make marketplace coverage more affordable is another matter, says Judith Solomon, vice president for health policy at the Center on Budget and Policy Priorities.

If you claim him as your dependent, he generally won’t be eligible. If you don’t claim him as your dependent, he would have to qualify for subsidies based on his own income.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.

TIME Health Care

Supreme Court Says Dentists Can’t Decide Who Gets to Whiten Your Teeth

595649-002
Getty Images

The Supreme Court has ruled that dentists can't hold a monopoly on teeth-whitening services

Dentists cannot have a monopoly on teeth whitening services, the Supreme Court ruled on Wednesday.

The Supreme Court found that the North Carolina State Board of Dental Examiners was wrong when it sent “cease and desist” letters to companies that were offering teeth whitening at strip malls and kiosks. The board held that it was regulating the practice, but it was sued by the Federal Trade Commission (FTC) for creating an advantage for its members and blocking competition.

The Supreme Court ruled 6-3 in favor of the FTC, agreeing that the board was acting on behalf of private members and not as a state regulatory agency since it was not being actively monitored by the state.

North Carolina law does not specify whether teeth whitening is a practice only allowed by dentists. The smaller businesses were offering the procedures for a lower costs than the dentists.

MONEY privacy

Your Embarrassing Online Searches About Health Problems Aren’t Private

camera aimed at laptop
Thomas Jackson—Getty Images

A new study found that 91% of health-related web pages reveal potentially sensitive information to third parties like data brokers and online advertisers.

Hypochondriacs beware: That Google search for “STD symptoms” could go into your digital dossier.

A new study has found that health-related web pages often leak information about you and the information you access to third parties, raising concerns about online privacy.

To conduct the study, University of Pennsylvania PhD student Timothy Libert analyzed the top 50 search results for 1,986 common diseases, some 80,000 web pages. He found that on 91% of the pages, third parties like social networks, advertisers, and data brokers could access information about who was viewing the page, like the user’s IP address. On 70% of the pages, those third parties could see information about specific “conditions, treatments and diseases” viewed.

Altogether, 78% of the health-related web pages sent information about you to Google, 31% sent information to Facebook, and 5% sent information to Experian, a credit bureau and data broker.

What’s the big deal? Libert has two major concerns about these practices. The first is that the third parties could match you with your medical search results, a problem he calls “personal identification.” This isn’t a totally imaginary scenario—data brokers routinely collect information about you from your online activity, shopping habits, and public records, then turn around and sell that information to advertisers. That already includes sensitive medical information: One data broker was caught hawking lists of “rape sufferers,” “domestic abuse victims” and “HIV/AIDS patients.”

Second, advertisers could discriminate against you based on your medical searches, regardless of whether your search results are ever connected to you personally. That’s called “blind discrimination.” In other words, advertisers could serve you certain ads and offer you certain promotions based on the websites you read. Again, this practice can be innocuous, but it can also have a dark side. “It’s like any other form of discrimination,” Libert says. “If you’re going to extend a favorable offer to somebody, your best client probably isn’t somebody with terminal cancer.”

The tech-savvy might think their searches are private because they delete cookies or use a private browser, like Google Chrome’s “incognito mode.” Sorry, but no.

That’s because of the way websites work. Libert explains that a web page is like a recipe. The code says, “display an image from this file” or “play this video from Youtube.” To pull in content from another website’s server—like a video from Youtube—your server makes a “request” to that third-party server, and reveals information about you in the process. For example, the third party can see the name of the webpage you’re visiting, which may sound harmless, but can reveal a lot. You might not, for example, want advertisers and data brokers to know that you recently read “www.cdc.gov/hiv”.

“Even if you’re using incognito mode or something, the HTTP requests, at the very basic level, are still being made,” Libert says.

And you usually don’t even know it’s happening. While you can see evidence of some third-party requests, like Youtube videos and Facebook “like” buttons, Libert says most requests are bits of code invisible to the non-programmer’s eye.

Legally, this is all aboveboard. The HIPAA law protecting medical privacy only applies to medical services like insurance claims, not other businesses.

So while Libert wants lawmakers to beef up online privacy protections, he says in the meantime, your best bet is to install a browser extension like Ghostery or Adblock Plus.

“They don’t catch everything, but they catch a lot,” Libert says.

TIME Health Care

Rate of Americans Without Health Insurance Hits New Low

Obamacare's 6-Million Target Hit As Exchange Sees Visits Surge
Andrew Harrer—Bloomberg / Getty Images An Affordable Care Act application and enrollment help sign stands outside a Westside Family Healthcare center in Bear, Delaware, U.S., on Thursday, March 27, 2014.

States that expanded Medicaid and launched state-run insruance exchanges rack up double-digit declines

The percentage of uninsured Americans dropped by 3.5% nationwide in 2014, according to a new poll that shows a historic expansion of coverage nationwide.

The Gallup survey found that the uninsured rate dropped to 13.8% of the population in 2014, the lowest figure in the seven years the survey has asked the question.

The steepest declines occurred in states that launched their own health insurance exchanges and expanded Medicaid programs, two central planks of President Barack Obama’s health care reform law that many states have rejected. Arkansas and Kentucky reported double-digit declines of 11.1% and 10.6%, respectively.

TIME Health Care

Medical Marijuana May Soon Be Marketed as Kosher

Medical Marijuana
Colin Brynn—Getty Images

A certification agency is open to the possibility

Medical marijuana may soon come with a kosher seal of approval.

The Orthodox Union that offers kosher certification is in early discussions with parties interested in offering kosher medical-marijuana products, according to the Jewish Daily Forward.

In the past, the Orthodox Union has refused to certify cigarettes and e-cigarettes because of their clear health risks, but Rabbi Moshe Elefant, who leads kosher certification at the Orthodox Union, said it “would not have a problem” certifying medical marijuana since it has health benefits.

Since marijuana is a plant, it would appear that the certification would not be necessary. But in New York State, where medical marijuana will go on sale next year, cannabis could be distributed in other forms like edible substances and capsules, which would need a kosher seal. Many Orthodox rabbis are still strongly against its use.

[The Jewish Daily Forward]

TIME Health Care

Should Mentally Ill People Be Forced Into Treatment?

A new study finds that involuntary psychiatric treatment programs can keep people from cycling through ERs, jails, prisons, and homeless shelters—and therefore save taxpayers gobs of money. Is it worth it?

During the 1960s, Americans were horrified to learn about conditions within the state mental hospital systems, where patients were often abused and neglected, made to submit to dangerous medical procedures, or simply left live in squalid conditions for life. The popular backlash, made famous through books and movies such as One Flew Over The Cuckoo’s Nest, led to a general consensus against forcing anyone, under any circumstances, to receive psychiatric treatment against their will.

Now that belief is beginning to fade in large part because of simple budgetary math.

As it turns out, it’s just plain expensive for taxpayers to care for the small number of people with serious mental illnesses who refuse treatment and therefore end up homeless, incarcerated or draining the public coffers with multiple interventions and hospitalizations. At the same time, new psychiatric medications and methods have made it possible for people to get well without becoming long-term inpatients in the first place.

A new study, released this week by the Health Management Associates, a consulting firm, found that states and counties that have passed laws to allow local judges to order people into short-term psychiatric treatment spend substantially less money on treating mental illness than states and counties that don’t.

These programs, known as Assisted Outpatient Treatment are basically narrowly tailored safety-net programs designed to stabilize people with serious mental illnesses, and to keep them from ending up in a hospital, homeless or incarcerated. They require states and counties to pony-up a significant amount of cash in the short-term in order to build or maintain inpatient and outpatient facilities and organize a networks of mental health professionals, who are then legally responsible for them.

But that initial expense then ends up paying for itself, the Health Management Associates study finds. The outpatient program in New York City, for example, produced net cost savings of 47%, the study found. In the five counties surrounding New York, it saved 58%, and in Summit County, Ohio, it saved 50%, according to the study. In all three locations, the main cost-savings came from reducing the number of psychiatric hospitalizations. In New York City, the number of such hospitalizations dropped 40%; in Summit County, they dropped 67%. People who are assigned to Assisted Outpatient Treatment programs must fit certain criteria: they must have a serious mental illness, like schizophrenia or another disease with psychotic symptoms, and have a recent history of repeated violence or criminal activity.

Technically, Assisted Outpatient Treatment programs exist in 46 states across the country. But in most places, they are in name only. That’s partly because taxpayers and politicians have been unwilling to spend the cash to to get these pricey programs off the ground in the first place. And it’s partly because the idea itself—allowing judges to force people to receive psychiatric treatment against their will—remains deeply controversial.

Many patient rights advocates argue that any involuntary treatment whatsoever is an violation of a person’s civil rights. Others argue that such programs discourage people with serious mental illnesses from seeking treatment on their own. Daniel Fisher, a psychiatrist and the founder of the National Coalition for Mental Health Recovery, told TIME last year that he worries such programs represent “a slippery slope” back to the kind of mass institutionalization seen in the 1940s and ’50s.

But in many parts of the country, including liberal bastions such as the San Francisco Bay Area, lawmakers are beginning to embrace AOT programs on both fiscal and humanitarian grounds. Although people with symptoms of serious mental illness make up only about 4% of the U.S. population, they account for 15% of state prisoners, 24% of jail inmates and as much as 30% of the chronically homeless population, according to government records. People with serious mental illnesses are also nearly 12 times as likely as the average person to be the victim of a violent crime, like rape, and as much as eight times as likely to commit suicide.

The Health Management Associates study, which was presented to the Treatment Advocacy Center, an organization dedicated to promoting Assisted Outpatient Treatment programs, is the latest in a long line of similar studies that have attempted to quantify the cost of not treating the seriously mentally ill.

Thomas Insel, director of the National Institute of Mental Health, has estimated that the total cost of non-treatment to the government—including things like Medicare, Medicaid, disability support and lost productivity—is as much as $317 billion per year. Other studies have suggested that it costs federal, state and local governments $40,000 to $60,000 to care for a single homeless person with a serious mental illness. There are roughly 250,000 mentally ill homeless people in the U.S. today.

While no single study has looked at the cost of caring for all U.S. inmates with serious mental illnesses, some state and local studies have found that it costs roughly twice as much to incarcerate an inmate with a mental illness as one without and can run states up to $100,000 per inmate per year. There are an estimated 356,000 seriously mentally ill inmates in the U.S. today.

MONEY Health Care

Obamacare Procrastinators Get Tax-Time Reprieve

healthcare.gov website
Don Ryan—AP

Americans have between March 15 and April 30 to enroll in a health plan and avoid paying a tax penalty.

The Obama administration said Friday it will allow a special health law enrollment period from March 15 to April 30 for consumers who realize while filling out their taxes that they owe a fee for not signing up for coverage last year.

The special enrollment period applies to people in the 37 states covered by the federal marketplace, though some state-run exchanges are also expected to follow suit.

People will have to attest that they first became aware of the tax penalty for lack of coverage when they filled out their taxes. They will still have to pay the fine, which for last year was $95 or 1% of their income, whichever was greater. This year, the penalty for not having insurance coverage is $325 per person or 2% of household income, whichever is greater. By signing up during the special enrollment period for 2015 they can avoid paying most of the tax penalty for this year.

The Affordable Care Act requires most Americans to have health insurance or pay a financial penalty. But some people may not realize they face a penalty for not having coverage until they file their tax returns ahead of the April 15 tax deadline.

The administration also said Friday it sent out the wrong information to 800,000 people to help them calculate whether they received too much of a subsidy for health coverage last year or too little. Those affected are being notified today by email or telephone—and are being asked to wait to file their taxes until after new 1095-A forms are sent in early March.

For the 5% of those affected who have already filed returns for 2014, more instructions are to come from the Treasury Department, officials said. The 800,000 represents about 20% of the total number of people who were sent 1095-A tax forms. Officials declined to say how the mistake occurred.

The administration would not estimate how many people it expects to take advantage of the new enrollment period. Millions of Americans who did not enroll in a plan are exempt from the requirement to buy coverage because their income is too little or they qualify for other exemptions. Officials said this special enrollment would be just for this year to account for people who did not hear or heed messages about the individual insurance mandate that was included in the health law approved by Congress in 2010.

So far, 11.4 million Americans have enrolled in private health insurance through Obamacare during the open enrollment period that ended on Sunday.

Separately, administration officials have said they will allow people who had trouble completing their enrollment by Feb. 15 to finish by Sunday Feb. 22. Officials estimated it would help fewer than 150,000 people.

Julie Appleby contributed to this story.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.

Your browser, Internet Explorer 8 or below, is out of date. It has known security flaws and may not display all features of this and other websites.

Learn how to update your browser